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Shape up or ship out

The ministry of Transport and Communications thinks that Ukraine should use the European model and principles of attracting private capital in the development of ports. In particular, an investor should be given the right to developing and maintaining Ukraine's port infrastructure, logistics systems and warehouses, though the pier will remain in state ownership. Besides that, the state will control the safety of ships and perform the functions of customs, border and sanitary control on behalf of the maritime administration.

Such was the position of the Ukrainian government on this issue Minister of Transport Viktor Bondar declared in a recent meeting with members of the European Business Association (EBA) in Kyiv.

The transport minister feels that the privatization of the country's ports should be done in stages over the next 3-4 years. The first stage would begin with the sale of so-called "small" ports that do not have the capacity to substantially increase the volume of transhipment and service large ships.

In the event that the results of the first stage are positive, the second stage of this process will be executed - namely, the privatization of large ports in Ukraine. This includes the ports of Odessa, Illiyichivsk, Pivdenniy and Mariupol.

by Pavlo Berest

Background

At the present time Ukrainian ports are not subject to privatization.

The largest ports in Ukraine are in Odessa (volume of cargo processed in 2005 fell by 12.1% to 26.85 mn t), Illichivskiy (grew by 0.6% to 14.97 t) and Mariupol (remained at the same level of 2004 at 14.77 mn t). The volume of cargo processed in such small ports as Sevastopol, Yalta and Skadovsk was 310,000 t, 280,000 and 320,000 t respectively.

According to the statistics of the Ministry of Transport, the transhipment of cargo in 19 seaports under the subordination of the ministry in 2005 fell by 2.15% to 111.44 bn t, while the growth in 2004 was fixed at 0.7%

At the same time, private transhipment facilities increased the volume of maritime cargo processing in 2005 by 46.3% to 29.7 mn t and increased their share in the aggregate volume of work in the maritime port sector to 21.4%.

Kyiv Weekly

March 22, 2006

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