Business news from Ukraine

PROFIT OF UKRAINIAN PORTS SHOULD BE RETURNED TO CITIES FOR INFRASTRUCTURE DEVELOPMENT

The profits of ports should be returned to the cities in which they are located for the development of their infrastructure, Mykolaiv Mayor Oleksandr Senkevych has told Interfax-Ukraine on the sidelines of the International Mayors Summit (IMS).
“Mykolaiv was a city of shipbuilders. Now the factories are standing idle, Mykolaiv has turned into a port city. However, we do not receive money from the port infrastructure to the local budget, except for personal income tax and land lease,” Senkevych said.
He recalled that last year the net profit of the Ukrainian Sea Ports Authority amounted to more than UAH 2.6 billion.
“I think that this amount needs to be “halved.” Half of the profits is to be divided between the port cities, in proportion to the transshipment of goods. Cities should receive a portion of what they have earned for the country. Then we will be able to restore our infrastructure,” he said.
In his opinion, it will be possible to talk about the restoration of production and the attraction of significant investments in shipbuilding after the adoption of a law on technology parks. Senkevych considers promising a mechanism for the establishment of tax credits and preferential rates by local governments.
“Roughly speaking: they built a plant for EUR 100 million, you are provided with a tax credit for 50% of this amount for five to seven years. Personal income tax and land tax are paid from this amount. It is profitable for the enterprise to work officially, pay high salaries to employees,” Senkevych said.

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UKRAINIAN PORTS NEED BILLIONS OF INVESTMENTS

It is necessary to invest up to UAH 17 billion in the ports of Ukraine until 2027, Oleksandr Holodnytsky, the acting head of the Ukrainian Sea Ports Authority (USPA), has said.
“Some UAH 17 billion is an assessment of the portfolio until 2027. It foresees development plans, as well as what business wants and sees the USPA as a necessary component for maintenance and development,” he said at the Infrastructure of the South of Ukraine forum.
Holodnytsky, in particular, clarified that the money is needed for the construction of the utility network – UAH 400 million, road and railway tracks, as well as overpasses – UAH 1.9 billion, berths – UAH 11.6 billion, dredging – UAH 2.5 billion, as well as the fleet – UAH 600 million.

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AGREEMENT SIGNED ON QATARI QTERMINALS’ EXTRA CONTRIBUTION TO CONCESSION OF UKRAINIAN PORT

An agreement on making an additional contribution from the Qatari port operator QTerminals to the concession project for Olvia specialized seaport has been signed during the official visit of Ukrainian President Volodymyr Zelensky to Qatar.
The signing of this agreement was announced by the press service of the Ministry of Infrastructure of Ukraine with reference to Minister Vladyslav Krykliy.
At the same time, it is specified that the agreement was signed in the presence of Minister of Transport and Communications of Qatar Jassim Al Sulaiti and Foreign Minister of Ukraine Dmytro Kuleba.
The Ministry of Infrastructure notes that the signing of this agreement is an important stage in the procedure for transferring the port to concession, since it confirms the financial viability of the concessionaire to finance the entire amount of the declared investment – $140 million.
“Within the framework of the Olvia seaport concession, the leading world operator, the Qatari company QTerminals, which manages the largest commercial port of Qatar, Hamad, worth more than $7 billion, was involved in work in Ukraine. I welcome today’s signing the agreement on making an additional contribution from the concessionaire to this project. This is one of the main prerequisites for the further transfer of the port’s property to concession,” Krykliy commented on the signing of the document.
The agreement on transfer to concession of Olvia specialized seaport, located in Mykolaiv, was concluded on August 20, 2020. According to it, the Qatari company QTerminals will invest about UAH 3.4 billion in the development of the port. In addition, at least UAH 80 million will be invested in the local infrastructure. In just 35 years, concession will attract UAH 17.3 billion. The annual concession payment will be at least UAH 80 million. In addition, the concessionaire must ensure the minimum volume of cargo transshipment of at least 2.55 million tonnes per year, also guarantees the preservation of jobs for the next six years and the appropriate level of wages for the team.

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INTERNATIONAL COMPANIES INTERESTED IN CONCESSION OF UKRAINIAN PORTS

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.

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