Project Office of Public-Private Partnership prepares a “road map” to launch partnership mechanism in Ukraine

Project Office of Public-Private Partnership prepares a “road map” to launch partnership mechanism in Ukraine
September 30, 2016.

Project managers and donors come together to present a platform for cooperation between business and the state on the sphere of infrastructure and get support from the respective authorities.

Kyiv, September 30, 2016. The project office of public-private partnerships begins its work in Ukraine. “The goal of the project is to launch the mechanism of public-private partnership in Ukraine. The first part of the project is aimed at changing Ukrainian legislation, although unfortunately, it does not meet international standards. The second part involves implementation of several pilot projects to show that it is possible in Ukraine. A roadmap for future projects will be worked out and, most importantly, the team that can implement the projects will stay at the ministry,” said Dan Pasko, “EasyBusiness” co-founder, member of the National Reform Council, at a press briefing held at Ukraine Crisis Media Center. The idea was initiated by Easy Business platform, and the Ministry of Infrastructure of Ukraine was chosen as a testing platform. Western NIS Enterprise Fund (WNISEF) will provide financing for the project.

To implement the pilot project, three seaports were chosen – “Kherson”, “Oktyabrsk” and a ferry terminal in the port “Illichivsk”. “These ports were chosen because they are state-owned, there are no private stevedores and there are no leasing relations. These are the easiest objects for further concessions,” explained Volodymyr Omelyan, Minister of Infrastructure of Ukraine. The Office’s task is to develop a relevant project documentation package with particular proposals – “detailed calculation for investors to clearly understand how they can make profit,” said Dmytro Shymkiv, Deputy Head of Presidential Administration of Ukraine on administrative, social and economic reforms. “These projects require prefeasibility study and feasibility study on the international level, which will be the basis for tenders. The purpose is to attract an international investor who is profitable to the budget and can positively influence the development of infrastructure to one or all of these ports in a transparent manner,” said Mr. Pasko. “We want to orientate on the top 5 global port operators or carriers of a product,” said Mr. Omelyan. “In any case, it will be a transparent tender, but I would like to see a clear business plan for the development of these ports and understand that the state will receive additional income”.

The first projects are implemented in infrastructure because this sector has not had investment for a long time. In addition, high-quality infrastructure is the “backbone” for the development of all other sectors. “The main challenge facing Ukraine is economic development and creation of quality jobs. Without infrastructure there will be nothing,” stressed Olena Kosharna, founder and senior executive director of “Horizon Capital”, executive vice-president of Western NIS Enterprise Fund (WNISEF).

In case of successful implementation, said Mr. Shymkiv, Ukraine will have new jobs, new investments, increased commodity circulation, increased exports, increased government revenue and, consequently, an increase in GDP”. “I hope that during the joint work of the state and private capital on infrastructure facilities we will prove that this is our common future, considerable budget savings and, most important, effective application of funds. You can think of a lot of power control systems, but the most effective control is when a control member works in conjunction with the authorities,” added Mr. Omelyan.

Yuriy Gusev,”EasyBusiness” partner, said that the selection for the post of project manager for the three projects will start tomorrow, on October 1. Vacancy description will be released and candidates can submit their applications. The team will be formed by November.

Volodymyr Omelyan noted that the rate of projects implementation largely depends on when a law on concession is adopted. However, technical preparation has already started without waiting for legislative changes. “I hope we will see the first pilots working in the second half of 2017,” he concluded.

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