MIU asks companies for help in repairing port facilities

The Ministry of Infrastructure has published a draft resolution of the Cabinet of Ministers, which specifies the procedure for compensating private investments in port infrastructure.

We are talking about financing repair work, modernization, reconstruction or construction of port facilities of state ownership.

The document will ensure the implementation of Article 27 of the Law “On Seaports” and the implementation of Goal 8.3 “Ukrainian passenger and business has access to water transport.”

The ministry explains that now there is a problem of underfunding of the maritime industry, including – in connection with the imperfect fiscal policy, which leads to a shortage of funds from the State Enterprise “USPA”.

Many construction projects, the implementation of which is provided for by law, are already the subject of contracts and memorandums concluded by the Administration. However, due to the lack of finances and the state’s dividend policy, the USPA is unable to implement even some of these projects.

The State Enterprise “USPA” has 265 berths (cargo, auxiliary, passenger) in 13 ports of Ukraine. Of these, 20 are unsuitable for normal use; 37 – require significant investment in the next 5 years; more than 50 – work with low economic efficiency.

The State Enterprise “USPA” has 265 berths (cargo, auxiliary, passenger) in 13 ports of Ukraine. Of these, 20 are unsuitable for normal use; 37 – require significant investment in the next 5 years; more than 50 – work with low economic efficiency.

According to preliminary estimates, by 2023, USPA needs about UAH 12 billion (USD 439.5 million) to finance the reconstruction, modernization and construction of berths only. And in accordance with the Law, water areas, piers, pierheads, dams, breakwaters, underwater structures, canals, anchorages, access roads, communication lines, etc. are also considered strategic port infrastructure facilities.

According to paragraph 3 of item 5 of Section VI “Final Provisions” of the Law on Seaports, privately financed port infrastructure facilities are subject to transfer to the state property of the USPA on a compensation basis. Compensation for the cost is carried out in accordance with Article 27 of the Law.

The proposed act defines the mechanism for drawing up an agreement between the State Enterprise “USPA” and the investor on compensation for investments made by companies in the repair or development of port facilities.

The full version of the draft resolution can be found on the website of the Ministry of Infrastructure.

Let us recall that the state-owned enterprise “Ukrainian Sea Ports Administration” pays 80% of dividend payments annually. On average, the USPA pays about UAH 3.5 billion (USD 128.2 million) to the state every year.

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