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  • 2019 December 18 10:38

    World Bank presented its report on “Strengthening Ukraine’s Port Sector Governance”

    On December 13, 2019, the World Bank presented its report on “Strengthening Ukraine’s Port Sector Governance”, USPA says in a press release.  During more than one year, the Bank consultants have been studying the issues related to the port governance, land use and interaction between businesses, port administrations and local authorities in Ukraine.  As a result, the World Bank reported that within the process of further reformation of the port industry, the Ukrainian Sea Port Authority has to ensure the implementation of the landlord port management model in ports.  This will promote integrated port planning and development, improve the conditions for attracting private investments and strengthen Ukraine's positions as an exporting country on the world market.

    The World Bank analysts emphasized Ukraine's important role on the international markets as an exporter of food and mining and metal products as the ones to capture the high level of interest of private businesses towards the Ukrainian port industry. However, according to the opinions of international experts, the issue of prospective land development in ports and adjacent territories can be a significant deterrent in the further implementation of public-private partnership projects and attracting investments for infrastructure modernization.

    The Minister of Infrastructure of Ukraine Vladyslav Krykliy and the Chairman of the Verkhovna Rada Committee on Transport and Infrastructure Yurii Kisel, on their part, reassured the representatives of international organizations and business community in supporting the reforms in the transport sector by the state authorities, with due account of international experience, opinions of experts and all the market players.

    The Minister of Infrastructure stressed upon that on the way to improve the efficiency of management of state assets, in November 2019, the Ministry of Infrastructure promulgated a draft Law “On Corporatization of the Ukrainian Sea Ports Authority”: “This decision will allow the state enterprise to reorganize into a joint stock company in the future. The USPA Corporate Strategy Until 2025 concept envisages approaching the worldwide-recognized port management model – the one of a landlord port. This provides for the withdrawal of the state from stevedoring activities and introduction of an integrated approach to land ownership and land use in ports. This will contribute to the country's economic growth and the effective mobilization of private sector investments. The Ministry of Infrastructure supports this initiative.”

    Today, according to World Bank consultants, the situation in Ukrainian ports does not fit into any of the four classic models of the port industry governance. On the example of the port of Pivdennyi, the experts illustrated that land-related relations can be extremely complicated when implementing investment projects in ports. Available land territories are being owned and/or utilized by different local (municipal) authorities, regional (state) administrations, and private entities. “To attract large-scale investments, this has to be streamlined. The most effective option in this situation may be approaching by Ukrainian ports the landlord port model, while giving the Sea Ports Authority the necessary powers to systematically coordinate port land use planning and integrated development of port territories,” – Luis Blancas, the World Bank Transport Economist, said.

    In turn, the Deputy Chairman of the Supervisory Board of the Ukrainian Sea Ports Authority Dr. Patrick Verhoeven noted that the landlord port model which is implemented worldwide needs to be adapted to the Ukrainian context, taking into account the interests of the state, port cities and businesses. “This is not about changing the existing land-related relations in ports. The introduction of the new model requires consolidation of the port administration's capacity to manage, plan and develop port territories only, ” – he emphasized.

    “The landlord port mechanism is being practiced in many ports worldwide, including the ones of Antwerp, Rotterdam, Singapore, where it has proven effective as a basis for a systematic and understandable to all the stakeholders approach towards port management. We are very grateful to the Ministry of Infrastructure and the Verkhovna Rada for supporting the port reform initiatives and the World Bank for their contribution. We hope for the further cooperation around the development of the next stage – preparation of the necessary legislative changes and elaboration of a master plan for port development taking into account the capacities of road and rail transport, inland waterways and production of the main exports products on the territory of Ukraine, ” – the Head of the Ukrainian Sea Ports Authority Raivis Veckagans summarized.

    The event was also attended by the Head of the Odesa Regional State Administration Maksym Kutsyi, Members of Parliament, representatives of state and local authorities, business community and industry associations.

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