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PORTS & TERMINALS

 

 


Ukraine is oriented both towards the European Union and Russia, sometimes playing them off and trying to take advantage of its position on the crossroads. On the one hand, Ukraine has land borders with the EU Member States of Poland, Hungary, Slovakia and Romania. And, on the other, it has border crossings with developing Eastern European economies, namely Russia, Belarus and Moldova. Finally, Ukraine is a shipping country as well and some 20 years ago Blasco was the largest shipping company in the world!

 

The country has two rivers open for navigation – Dnepr and the Danube which enters the Black Sea in Ukraine. There are short sea links with Turkey, Russia, Georgia, Bulgaria, Romania and Greece along with direct rail links to Central Europe, the Baltic States, the Russian Far East and Central Asia. Although having all this, Ukraine has failed to launch real reforms across its transportation sector (no investment and no concession) after obtaining independence in 1991. But, fortunately, we still have a good potential for development. And certain changes and amendments were recently introduced.

 

The manual says: investors engaged in port and terminal activities are generally found among professional operators, cargo owners and shipping lines. At the moment, throughout 18 Ukrainian seaports and 11 river ports, it is hardly possible to find a global port operator. As for cargo owners, the picture is much better. Ukraine is a leading exporter of commodities; therefore, international traders and local financial-industrial groups have already constructed a number of dedicated terminals in Ukrainian ports. 

 

What is the reason for such a poor ratio of terminal investments? The answer is pure and simple – it is the post-socialist regime’s way of attracting investors. Too many public authorities are involved in a transaction, which is coupled with unclear bidding requirements. Authorities can continuously demand additional documentation, causing significant delays and transaction costs. Sometimes, even after final negotiations, authorities can still alter the contents of an agreement, change contractual arrangements, adding another brick to the wall of uncertainty and stretching the way of delay. In other words, such an unworkable transaction process makes the institutional framework weak.

 

The reform’s main tools are privatization and concession of ports and terminals. Land in ports may be held in any form of ownership permitted by the laws of Ukraine. So, it may be either state-owned or privately-owned which can be treated as a revolutionary move. This creates opportunities for financing the construction of new cargo terminals and ensuring a return on investments.


Publications


  • How much does the port service market cost? Calculation attempt No. 118.10.17

    The Ukrainian sea port service market for a long time existed as state-owned monopoly with state-owned enterprises prevailing, since port privatization either did not occur or was too restricted (as compared to many other economic sectors). First elements of market economy were private agencies, freight forwarding or stevedoring companies established in early 1990s.more
  • Mandatory insurance policy for vessels calling at Turkish ports20.09.17

    According to the current regulations, since 2011 all vessels over 300 GT calling at Turkish ports or other facilities in Turkish waters, as well as Turkish flagged vessels, must have valid P&I insurance policy which covers risks and liabilities up to the limitation level stipulated in the Convention on limitation of liability for maritime claims 1976, and 1996 Protocol amending that Convention.more
  • Lease, concession and privatization of ports in Ukraine23.06.17

    2016 year is coming to the end, while disputes concerning deadlock recovery of investments at the Ukrainian sea ports still continue. One say, no privatization, only lease or concession. The others contest any types of privatization of sea port property and activity. There are so many opinions that it is impossible to list all of them.more
  • Lease, concession and privatization of ports in Ukraine25.11.16

    2016 year is coming to the end, while disputes concerning deadlock recovery of investments at the Ukrainian sea ports still continue. One say, no privatization, only lease or concession. The others contest any types of privatization of sea port property and activity.more
  • Port privatization as strategic goal is a must16.08.16

    To choose the correct investor, first stage is determination of the investment scope. For this purpose, an inquiry on description of the company, its business activity, corporate structure and beneficiaries should be filed. It is also recommended to study financial reports for the last three years regarding the company’s liquidity and solvencymore
  • Sanctions & liability for Calling at Crimean ports: update - August 201517.09.15

    On 27 March 2014, the UN General Assembly adopted the Resolution “On Ukraine’s Territorial Integrity” calling on Member States, international organisations and agencies not to recognise any change in the status of the Crimea and the City of Sevastopol.more
  • Sanctions & liability for Calling at Crimean ports: update17.07.15

    It is an internationally established fact that in March 2014 Russian Federation unlawfully annexed Crimea. On 27.03.2014, UN General Assembly adopted the Resolution “On Ukraine’s Territorial Integrity”, calling on States, international organizations and agencies not to recognize any change in the status of Crimea or the City of Sevastopol...more
  • CRIMEA AND MARITIME SECTOR: STORY TO BE CONTINUED12.05.14

    On March 27, 2014 the UN General Assembly adopted a resolution 68/262, in which called upon all States, international organizations and specialized agencies not to recognize any alteration of the status of the Autonomous Republic of Crimea and the city of Sevastopol and to refrain from any action or dealing that might be interpreted as recognizing any such altered status.more
  • Possessory lien on cargo in the Black Sea: how to do it in Ukraine14.03.14

    Failure of the charterer to pay the freight or demurrage amount incurred at the port of loading is quite frequent situation in the carriage of goods by sea. In the shipping business, the most common type of shipowner’s remedy is the right of lien over the cargo in his possession.more
  • Crimean Ports: Now and After30.09.14

    On March 27, 2014 the UN General Assembly adopted a resolution on Ukraine, which called upon States, international organizations and other institutions not to accept any change in the status of the Crimea and Sevastopol, and to refrain from any action that could be interpreted as an admission of any changes to that status. Thus, a new status quo has emerged, which creates a chain reaction setting in...more