The Ministry of Infrastructure has approved a decision to begin a tender for concession of the state-owned stevedoring companies at the Kherson and Olvia seaports, Minister of Infrastructure Volodymyr Omelian has announced, the CFTS portal reports.

"Orders to start concession of the Olvia and Kherson seaports have been signed. The relevant announcements on the start of the relevant tender will be made publicly in the near future," the minister said.

As the CFTS portal reported earlier, the Cabinet of Ministers officially approved the terms for concession of the state-owned stevedoring companies at the Kherson and Olvia seaports on August 14.

According to the Ministry of Infrastructure, about 20 preliminary applications to participate in the concession tenders have been received from foreign and Ukrainian companies.

The Ukrainian Seaports Authority and the Ministry of Infrastructure planned to announce tenders for concession of the Olvia and Kherson seaports in the period of June-July 2019.

The current legislation allows a little more than three months for organization of the tender and determination of the winner. Contracts will be signed with the winners of the tenders and that the parties to the contracts will be the Ministry of Infrastructure, the Ukrainian Seaports Authority, the winning company, and an enterprise (a special purpose vehicle or SPV) that the winning company will create and register in Ukraine for implementation of the project.

To increase the number of potential bidders, the requirement to have experience in working with cargoes in the port industry has been expanded to include the entire range of cargoes. Provision is also made for a transition period of up to two years, during which the concessionaire will be able to prepare and secure approval of its investment project, obtain licenses and other necessary permits, and take an inventory of the concession assets.

The main conditions of the pilot concession projects remain unchanged: mandatory investment in development of both ports (about USD 60 million in the Olvia seaport and USD 8 million in the Kherson seaport), allocation of at least 5% of capital expenditures for development of the transport infrastructures of the cities in which the ports are located, and fulfillment of the relevant social obligations to employees of the seaports. In addition, a significant increase in cargo turnover and increases in contributions to local budgets are expected.