The Ministry Plans to Announce Pilot Tenders for the Attraction of Private Resources in the Road Sector of Ukraine By the End of 2021
This has been announced by the Minister of Infrastructure of Ukraine Vladislav Kryklii.
The Minister explained: “While preparing for the implementation of the Road PPP Program, experts from the World Bank and the IFC (with the support of the Global Infrastructure Facility, SPILNO PPP Management Office, and PPP Agency) conducted a research entitled Ukraine Road PPP Program – Options for Involvement of the Private Sector in Repair, Rehabilitation, and Maintenance of the National Road Network. In January 2021, the experts completed a pre-feasibility study based on the results of this research concerning the 6 pilot road sections with a total length of 1,400 km, which will be rehabilitated during the first phase of the Program. In addition, the Ministry’s leading specialists have prepared conceptual notes on the implementation of these pilot PPP projects. They were just sent to other Ministries for approval. We will then proceed with the development of a detailed feasibility study for each project.”
The list of six pilot projects includes:
1 – current and capital repairs of Kharkiv-Dnipro-Zaporizhzhya road (M-29, M-04, M-18). The estimated amount of initial investment is $ 370 million.
2 – current repairs of Boryspil-Poltava road (M-03). The estimated amount of initial investment is $ 180 million.
3 – reconstruction, bypass construction, capital, and current repairs of Kherson-Mykolaiv road (M-14). The estimated amount of initial investment is $ 310 million.
4 – capital and current repairs of Kyiv-Zhytomyr-Rivne road (M-06). The estimated amount of initial investment is $ 370 million.
5 – reconstruction, current, and capital repairs of Yagodyn-Kovel-Lutsk (M-07, M-19) road. The estimated amount of initial investment is $ 240 million.
6 – reconstruction, bypass construction, capital repairs of Dnipro-Kryvyi Rih-Mykolayiv road. The estimated amount of initial investment is $ 290 million.
“All these projects are included in the list of priority projects for the Government of Ukraine for the period up to 2023 and provide for further road maintenance by the investor for the next 20 to 30 years. These are additional investments that are much larger than initial investments. The six pilot projects were selected so that the maximum economic effect of the invested funds is achieved, and so that as many Ukrainians as possible experienced the improvement of the road infrastructure. After all, these roads connect 10 regions of Ukraine, and over 12 million people live there,” Vladyslav Kryklii added.
According to the Minister, these roads will be free of charge to citizens. Instead, the infrastructure will be publicly financed in the form of installment payments for a period of 20 to 30 years. If the road is not maintained in accordance with the required standards, the payment to the investor by the state is reduced by the amount set out in the contract.
Additionally, on 20 January, the Government approved the Draft Law «On Amendments to the Budget Code of Ukraine Regarding the Regulation of Budget Relations during the Implementation of Agreements Concluded in the Framework of Public-Private Partnership, Including Concession Agreements». This Draft Law has been drafted with the aim of improving the legal regulation of PPPs and adjusting the law in conformity with the international standards concerning the regulation of financial matters, particularly the state support of PPPs (including concessions).