Ukraine maps out $60 bil­lion in­fra­struc­ture plan to 2030

Kyiv Post - - Business Focus - BY GABRIEL HARDY- FRANÇON

Ukraine’s gov­ern­ment and the Euro­pean Union have drawn up a broad and bold strat­egy to build, up­grade, mod­ern­ize and re­pair the coun­try’s trans­port in­fra­struc­ture.

Am­bi­tious ob­jec­tives

The strat­egy, dubbed “Drive Ukraine 2030,” en­vi­sions a bud­get of $60 bil­lion — half of the na­tion's an­nual gross do­mes­tic prod­uct — to be in­vested in a range of na­tional projects in the next decade.

"We will de­velop in­ter­na­tional trans­port cor­ri­dors, build a road net­work and de­velop rail­ways in ac­cor­dance with the strat­egy,” Ukrainian In­fra­struc­ture Min­is­ter Voldymyr Omelyan said at a Jan. 31 press con­fer­ence.

To bet­ter align trans­port net­works with Euro­pean neigh­bors, the Ukrainian gov­ern­ment has been work­ing closely with the EU and col­lab­o­rated with sev­eral Euro­pean or­ga­ni­za­tions — in­clud­ing the Euro­pean In­vest­ment Bank and the Euro­pean Bank for Re­con­struc­tion and De­vel­op­ment — to for­mu­late their plan, ap­proved by the Cabi­net of Min­is­ters on May 30, 2018.

EU col­lab­o­ra­tion

The Euro­pean Com­mis­sion and the World Bank have set in mo­tion the new In­dica­tive In­vest­ment Ac­tion Plan for the Trans-Euro­pean Trans­port Net­work, known as TENT, in or­der to in­te­grate EU trans­port net­works with Ar­me­nia, Azer­bai­jan, Be­larus, Ge­or­gia and Ukraine.

TEN-T com­prises 100 projects with al­lo­cated in­vest­ments of al­most 13 bil­lion eu­ros, or $14.7 bil­lion, through 2030. Thirty-nine of these projects are for Ukraine alone, which should help make the coun­try’s econ­omy more com­pet­i­tive and cre­ate a large num­ber of jobs.

Hugues Min­garelli, the Euro­pean Union’s am­bas­sador to Ukraine, praised the project on Jan. 18 say­ing that “one of the ways to pro­mote the eco­nomic de­vel­op­ment of Ukraine is to cre­ate a sus­tain­able and ef­fi­cient trans­port sys­tem… (and) to im­prove the reg­u­la­tory frame­work and har­mo­nize Ukrainian leg­is­la­tion in the field of trans­port with (EU law).”

Roads

The Ukrainian gov­ern­ment al­lo­cated Hr 50 bil­lion, or $1.6 bil­lion, to the State Agency of Au­to­mo­bile Roads of Ukraine, or Ukravtodor, for 2019. Hr 14.7 bil­lion, or about $480 mil­lion of that amount will be al­lo­cated for the up­grad­ing and re­pair­ing of roads, ac­cord­ing to Ukrainian Prime Min­is­ter Volodymyr Groys­man. The over­all state bud­get al­lo­ca­tion for roads has in­creased by Hr 7.5 bil­lion, or $245 mil­lion, in com­par­i­son to 2018.

For 2019, the main mis­sion will be to break ground on the Go High­way cor­ri­dor — a high­way net­work stretch­ing 1,746 kilo­me­ters from Gdansk, Poland to Odesa in Ukraine, which will link the Baltic Sea to the Black Sea, and con­nect the Ukrainian sea­ports of Odesa and Myko­laiv too.

The Ukrainian gov­ern­ment said on Jan. 14 that it had al­lo­cated Hr 4 bil­lion, or about $150 mil­lion for the Go High­way project.

The state also plans to in­stall Ukraine’s first au­to­matic weigh­ing sta­tions on the ap­proach roads to Kyiv. The end goal by 2030 is to build 10 new high­ways, in­stall 100 au­to­matic weigh­ing sta­tions, re­duce the time it takes to cross the coun­try by road by 10 hours, and im­prove road safety.

Rail­ways

The Ukrainian rail­road sys­tem is open­ing its doors to pri­vate com­pa­nies in 2019, even though the rail net­work it­self will re­main state-owned.

The state rail­ways ad­min­is­tra­tion Ukrza­l­iznyt­sia is to im­prove con­nec­tions be­tween ma­jor Ukrainian and Euro­pean cities, mak­ing high­speed in­ter­na­tional train ser­vices from Kyiv, Odesa, and Lviv a top pri­or­ity in 2019.

Ukrza­l­iznyt­sia will also ad­just its tar­iffs: Freight rates are to be in­dexed au­to­mat­i­cally, and tar­iffs re­grouped into cat­e­gories, and stan­dard­ized for both empty and loaded con­tain­ers. This alone should help “in­crease the vol­ume of trans­ported goods by five mil­lion tons,” Ukrza­l­iznyt­sia’s head Yev­gen Kravtsov said at a re­cent press con­fer­ence.

The agency also plans to co­op­er­ate with Kyiv City State Ad­min­is­tra­tion to im­prove the cap­i­tal’s sub­ur­ban train net­work and mod­ern­ize Kyiv’s cen­tral sta­tion.

By 2030, Ukraine plans to up­grade its en­tire lo­co­mo­tive and car fleet, in­crease aver­age speeds to 150 kilo­me­ters per hour on the rail­ways, and es­tab­lish high-speed ser­vices be­tween Kyiv and the coun­try’s ma­jor cities — Odesa, Lviv, Kharkiv, and Dnipro.

Air

The de­vel­op­ment of Bo­ryspil In­ter­na­tional Air­port’s Ter­mi­nal F will be an­other top pri­or­ity for the in­fra­struc­ture min­istry this year. The ter­mi­nal’s cargo han­dling ca­pac­ity is to be in­creased from 30,000 tons to 100,000 tons per year.

Ter­mi­nal F is also sched­uled for re-open­ing to pas­sen­gers for low-cost air­lines and char­ter flights in April – this, com­bined with the cur­rent ex­pan­sion of Ter­mi­nal D, should en­able an ad­di­tional three mil­lion pas­sen­gers to fly through Bo­ryspil, ac­cord­ing to its gen­eral di­rec­tor Pavlo Ryabikin.

The min­istry also says that it plans to ac­cel­er­ate the de­vel­op­ment of Bila Tserkva Air­port, lo­cated 80 kilo­me­ters from Kyiv and 390 kilo­me­ters from Odesa. This is a joint project be­tween the Ukrainian gov­ern­ment and the Euro­pean Com­mis­sion, which is ex­pected to start ex­pand­ing the air­port’s cargo han­dling ca­pac­ity from early 2019, bring­ing it to 72,000 tons yearly by 2030.

In Odesa, city au­thor­i­ties spent Hr 922 mil­lion ($30 mil­lion) be­tween Dec. 2017 and Jan. 2019 to mod­ern­ize and ex­pand the city’s air­port. An ad­di­tional Hr 758 mil­lion ($24 mil­lion) will be spent in 2019 to com­plete the air­port ex­pan­sion project.

Ukraine has set the am­bi­tious tar­get of hav­ing 50 air­ports in op­er­a­tion by 2030. Ac­cord­ing to the min­istry, the plan is for it to take no more than an hour to travel to an air­port, no mat­ter where a per­son is in the coun­try. The num­ber of des­ti­na­tions reach­able from Ukrainian air­ports is to rise to 350.

Mar­itime

In the mar­itime in­dus­try, the min­istry this year is fo­cus­ing on the ports in Myko­laiv and Kher­son. Twenty-five in­ter­na­tional and Ukrainian com­pa­nies are par­tic­i­pat­ing in up­grad­ing these ports, and the In­fra­struc­ture Min­istry es­ti­mates that the project could at­tract mil­lions of dol­lars once fin­ished.

The Ukrainian Sea Ports Author­ity, a state en­ter­prise man­aged by the In­fra­struc­ture Min­istry, also wants to ren­o­vate the docks at sev­eral ports — namely Odesa, Mar­i­upol, and Myko­layiv. In ad­di­tion, the ap­proach chan­nels at Yuzhny and Chornomors­k ports need dredg­ing. These five projects cost Hr 16 bil­lion, or about $523 mil­lion.

By 2030, the gov­ern­ment wants to "rid its ports from cor­rup­tion, lower tar­iffs, and op­ti­mize its lo­gis­ti­cal ca­pac­i­ties,” the In­fra­struc­ture Min­istry says. It also hopes to move 30 per­cent of its cargo vol­ume through the Black Sea sea­ports, and turn them into some of the world's largest con­tainer ports.

(Oleg Pe­tra­siuk)

An old steam en­gine pulls a train across the Petro­vski Bridge in Kyiv on Nov. 4, 2018.

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