China’s Largest State Enterprise Interested In Concession At Chornomorsk Seaport

19 April 2017 10:45

A delegation from the Sinohydro hydropower engineering and construction company (China) has visited the state-owned Chornomorsk seaport to explore possible cooperation options. The Sinohydro Corporation’s regional director for Europe and the Caucasus and the Chornomorsk seaport’s director discussed leasing, concession, or joint operations. The delegation was interested primarily in the possibility of concession, the CFTS portal reports, citing information from the Chornomorsk seaport.

The potential investors said they were interested in cooperating with the state-owned Chornomorsk seaport because the Sinohydro Corporation is also a state company – specifically the largest state-owned company in China – and it is legally obliged to work only with state institutions.

"There is no precedent for operation of a facility as a concession in the Ukrainian transport industry. This is an experiment. A Concession Law exists, but it has never been applied anywhere. Therefore, the ministry proposed a pilot project involving operation of the fifth terminal as a concession… Legally, there are many cooperation projects. When an investor comes to us and says that he wants to build an elevator, he always has relations with us as an enterprise that allocates land to it for construction of an elevator and with an affiliate of the Ukrainian Seaports Authority, which should prepare the berth by the time this elevator is launched," the Chornomorsk seaport’s Director Serhii Kryzhanovskyi said, explaining the situation to the Chinese delegation.

He also noted that the port currently has three major priority projects for which memorandums of cooperation have already been signed. However, according to him, about 60% of the port’s territory is still open to new investors.

The transport projects in which the Sinohydro Corporation is currently involved include construction works in the port of Hambantota in Sri Lanka (the volume of investments is USD 361 million) and the port of Nouadhibou in Mauritania (an 800-meter concrete viaduct and a pier) and dredging operations in the Port of Karachi in Pakistan. 

As the CFTS portal earlier reported, the Chornomorsk seaport has signed a memorandum of understanding with Hutchison Ports, the world's largest port operator. The company's Clemens Cheng has confirmed Hutchison's interest in entering the Chornomorsk seaport, as well as its willingness to provide expert advice in reforming the Ukrainian maritime industry.

The Chornomorsk seaport has also begun preparation to transfer operation of its terminal No. 5 (a railway ferry complex) to a concessionaire.