24/7

Ukraine paves the way for privatization

26.06.12

Ports such as Odessa can now take advantage of private investment

21 Jun 2012

Port Strategy has learnt that Ukraine has adopted a new law on seaports which establishes the basis of governmental regulation for new procedures on building, expanding, and closing seaports in the country.

Arthur Nitsevych, partner in Odessa based legal and consultancy firm, InterLegal, told Port Strategy: “The new law solves two main issues. It has separated the administrative and commercial functions of a port and allowed private investment into ports and infrastructure."

Key points introduced by the new law are that real estate property, berths and land plots within a seaport territory can now be owned by individuals and private companies, no longer just public concerns. Existing port infrastructure can also now be privatised following a compulsory tender process.

Added to this, the State is now entitled to enter into lease, concession, or other investment agreement over berths, land plots and any other port infrastructure, for a term not exceeding 49 years.

There will also be a new state run body called the Administration of Seaports of Ukraine which will have branches in each Ukrainian seaport to oversee new procedures.

So called ‘strategic’ port infrastructure will remain state owned however and will not be subject to lease or concession agreements with private investors. Here, private investment will only be allowed for construction, repair and modernisation work.

The new law has been a long time coming, over nine years in fact – but it should help to put Ukraine on the map for operators looking at branching out into Eastern Europe and the Black Sea region.

Portstrategy 21.06.2012