Three companies from Qatar and Ukraine have announced that they will participate in a competition for concession of the Olvia stevedoring company, according to a posting on the website of the Infrastructure Ministry. According to the report, two of the three companies are prequalified to participate in the next stage. “As for the third, the tender committee has not yet made a decision, since the application was submitted on the last day,” the ministry said. Tender proposals for participation in the tender were submitted by QTerminals company (Qatar) and associations of Peters Maritime Agency LLC and Protti-Gasoline LLC (both from Mykolaiv).
Infrastructure Minister Vladyslav Krykliy said that $66 million of investments and at least $3 million of government investments over the next 35 years are expected from the implementation of the concession project in the Olvia stevedore, as well as $3 million of annual concession payments.
The next stage, during which the competitive bods of the participants will be evaluated and the winner determined, will be held on January 21, 2020.
As reported, four companies will participate in the Kherson seaport concession tender.
International companies are interested in concession of Olvia stevedoring company and Kherson maritime merchandise port, and four or five applications have arrived, Ukrainian Infrastructure Minister Vladyslav Krykliy said on the sidelines of the RE:think Invest in Ukraine forum opened in Mariupol on Tuesday.
“[Investors] are already applying for concession of the Olvia stevedore, Kherson port, although there is time until the end of December. There are already four or five applications [for both stevedore and port], and when we held the conference, we had about 30 participants, and two thirds of them are international companies not from the local market. So, the talks that our [Ukrainian] companies will come and take them into concession have not come true,” he said.
According to Krykliy, some of the companies interested in the concession have already invested in Ukraine and are ready to continue their work in the country.
“Among the companies that have already submitted applications, there are both foreign and Ukrainian investors… There are applications from China, Qatar, Singapore and several more,” the minister said.
As reported, the government announced the start of competitions for pilot concession projects in the port industry on September 12, 2019.
Infrastructure Ministry of Ukraine is mulling the possibility of concession of the Lviv airport, Infrastructure Minister Vladyslav Krykliy said on the sidelines of the RE:think. Invest in Ukraine forum opened in Mariupol on Tuesday.
“Among the state-run airports, we have only two – Boryspil and Lviv. It is more rational to talk first about the Lviv concession,” the minister said.
He said that the Boryspil airport already has its own development strategy, which it is now successfully implementing on its own, and this also needs to be taken into account.
“Concession has a very simple formula. If a project is troubled or unprofitable, it can be transferred to a concessionaire under very favorable conditions for obligations to increase traffic, and other things. If this is a profitable activity, as in the case of the Boryspil [airport], the issue is ambiguous, because the Boryspil [airport] grows on average in passenger traffic by 15-20% annually… If an investor is ready to take on obligations to increase passenger traffic two or three times faster, then it is already possible to speak about it. But I am not sure that someone will undertake such obligations,” Krykliy said.
As reported, in September, the Infrastructure Ministry of Ukraine announced that it was preparing pilot projects for the transfer of regional airports to concession.
Over 46 companies from 11 countries participated in the investment conference seeking for the projects related to transferring of Olvia stevedoring company and Kherson maritime merchandise port into concession, Ukrainian Sea Port Authority (USPA) reported.
According to the USPA, apart from the participants of Ukraine, the companies from Turkey, Belgium, the Netherlands, Singapore, Great Britain, Denmark, United States, Qatar, Georgia and Germany attended the conference.
Infrastructure Minister Vladyslav Krykliy and Chairman of Verkhovna Rada Committee on Transport and Infrastructure Yuriy Kysil have assured potential investors that all branches of power back implementation of the concession projects in the ports.
“Potential investors can expect that on a par with how they implement their projects in the port industry, the state will develop automobile and transport infrastructure. This will improve logistics throughout the country and load new capacities in the ports,” the report said.
According to USPA CEO Raivis Veckagans, tenders for pilot state stevedoring concession projects in Olvia stevedore and Kherson port open up new opportunities for the Ukrainian port industry to attract private investment in the development of port infrastructure, which have long been actively used in EU countries.
Required capital investment of both as estimated by international consultants amounts up to $65 million. These funds to be meant for modernization of existing port infrastructure, restoration of movable property in Kherson port, in Olvia the funds will be meant for reconstruction, modernization of existing facilities and construction of new port terminals.
This will increase the volume of transshipment of goods, revenues coming to the state and local budgets from the work of stevedores. Also, the cities of Mykolaiv and Kherson will receive mutual contributions from investors for the development of transport infrastructure related to the activities of ports.
The assets of the state stevedoring company in the Olvia stevedore to be transferred to the concession for a period of 35 years, and in the port of Kherson – for 30 years. At the same time, they will remain in state ownership and after the completion of concession agreements will be transferred to the state together with all the facilities in which the company invests, which will build or modernize them.
Ukraine’s Infrastructure Ministry believes that concession of regional airports is promising, Minister Volodymyr Omelyan has said.
“Projects in the airport industry… we are now also preparing those regional airports that either work with low load rates or are only planning to resume operations. We believe that they may also be interesting for the concession,” the minister said on the sidelines of the government meeting on Wednesday.
According to him, in the future, the Infrastructure Ministry is ready to give other facilities to concession.
As reported, earlier the Finance Ministry approved the preliminary feasibility study of the concession of state-owned enterprise Yuzhny Maritime Merchandise Port.
TIS Port (the stevedoring company operating in Yuzhny port, Odesa region) allows participation in the concession of Yuzhny port if the necessary law is adopted. “Yes, it is quite possible that it will be Yuzhny port,” co-owner and CEO of TIS Andriy Stavnitser said in an interview with Interfax-Ukraine. Speaking about smaller ports, he noted that, in his opinion, Ukraine does not need as many ports, and some of them can be closed, and some can be reformatted.
“Kherson, Izmail, Bilhorod-Dnistrovsky – there could be tourist zones, yacht clubs there, for example, which would bring revenues but not losses to the state,” Stavnitser said.
Asked about the considerations on the basis of which Kherson and Olvia ports were made pilot for concession, he noted that it is probably more visible for the Ministry of Infrastructure, but stressed that TIS won’t participate in any of these concessions.
“Not because we are so big, deep-water and do not notice anything else around. There are simply ports whose maintenance costs the state more than profits from them,” Stavnitser summed up. As reported, the Verkhovna Rada adopted as a basis bill No. 8125 on concession.