The Ukrainian Ministry of Infrastructure has announced concession tenders for the Olvia Stevedoring Company and the state-owned Kherson Commercial Seaport.
The Interfax Ukraine news agency reported this, citing an announcement published in the Uriadovyi Kurier newspaper.
The winner of the concession tender for the Olvia port of Olbia will be able to operate the port as a concession for 35 years and the winner of the concession tender for the Kherson port will be able to operate the port for 30 years.
According to the report, applications to participate in then tenders will be will be accepted within 60 days.
“These will be the first large-scale concession projects. We will expand the concession to other spheres, such as railway stations and airports, and this will be in the near future,” Ukraine’s Minister of Infrastructure Vladyslav Kryklyi said at the Ministry of Infrastructure, the CFTS correspondent reports.
As reported, at the beginning of this month, President Volodymyr Zelenskyi ordered concession of the Olvia Kherson seaports by the end of this year.
As the CFTS portal reported earlier, pilot competitions will be held under the current concession legislation. The president of Ukraine announced on August 8 that a new law on concessions would be adopted this fall.
The Cabinet of Ministers officially approved the conditions for concession of the Kherson and Olvia seaports on August 14.
On August 29, his last day in the post of minister of infrastructure, Volodymyr Omelian said that the Ministry of Infrastructure had approved a decision to begin a tender for concession of the state-owned Kherson and Olvia seaports.
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.