The Ukrainian government has confirmed the first list of investment projects, continuing to welcome institutional and strategic investments to the country.
Ukraine is facing challenging times, as most countries hit by COVID-19, but Ukraine did not enter this period with a strong economy or a reformed medical system. As the government of Prime Minister Denys Shmyhal is continuing to battle through the poor readiness to crises, it is turning its face also to Western investors, welcoming them to invest in the country for the long term, confirming the list of potential public-private projects. Nearly 40% of the objects considered for private-public partnership are from infrastructure, continuing the first successful attempts of concessions, led by Infrastructure Minister Vladyslav Kryklii.
The list for potential infrastructure private-public partnerships includes 14 airports, a number of strategically important roads, modernization of the postal network of Ukrposhta, concessions of the next three ports, and even railway stations that are in true need of modernization.
All of the projects are important “pieces of the puzzle” of infrastructure and the next years, with hopefully the support of the parliament, will be dedicated to significantly upgrading the business and leisure travelers comfort with the renovation of airports and main railway stations.
Even though new terminals were built for the Euro 2012 football championship in Kyiv Boryspil International Airport, Lviv, Donetsk, and Kharkiv, most of the airports in the country are still in pretty gloomy condition, with runways sometimes unrepaired from the 1970s and the 1980s. Even though the runways belong to the state, and will possibly need new models of financing, there are many interesting possibilities as well for partnerships in building and operating the terminals, with the first partnership already in process in Dnipro.
This year, renovations and constructions started in four strategically important airports – Dnipro, Odesa, Zakarpattiya, and Kherson. Despite the new terminal in nearby Zaporizhzhia, Dnipro is in urgent need of the new terminal and runway with a really open sky for different airline companies, including low-costers. Even though the airport serves the needs of the 1-million people city and the surrounding cities, the airport is in pretty sad condition, with the runway is in urgent need of repair as well as in need of the new terminal, that would be opened not only to handpicked companies but to everyone interested, really opening the sky. The new runway is planned to be built by 2024 and the project works have already started with the procurement of a general contractor in process. The terminals will be built and operated by private partner DCH, constructor, and operator of the Kharkiv airport and the construction works of passenger and VIP-terminals have already started as well. In Zakarpatya the new location choosing is in process, in Odesa, the runway is expecting the certificate for operating and Herson is in process of upgrading the needed navigation equipment and future renovation of the runway.
All of the main airports are expected to start operating by 2024 or in 2024 – the year that International Air Transport Association expects the passenger and cargo volumes to have recovered from the covid-crises. The global passenger volumes are expected to decline 60% this year as compared to last year and the volumes of passenger flow in airports of Ukraine have already decreased by 63% during the first 10 months. While struggling through the economic challenges, the public-private partnership might be the best instrument to finance long-term job-creation and regional development projects. Government has already the first successful big concession experience with the ports of Olvia and Kherson and the airport of Kharkiv and now intends to expand this approach.
Even though the main attention and resources should go to upgrading the medical system and capacities, the first vaccines are out and life will slowly, yet steadily, start to return to normal starting from spring. And in this process of recovery, it is critical to get ready for also offering new possibilities to people and business, with infrastructure playing one of the most important roles. According to several international studies, including research-based on United Kingdom airports, just the presence of modern airports creates the possibility for economic growth from 1.4-3%. I believe in certain regions, such as Dnipro, the impact will be even bigger. And public-private partnership is the best instrument we have, that allows us to use the main resources for daily needs to overcome the crisis, while engaging long-term resources of the local and international partners to create new growth points in the future.
Ukraine is once again looking for partners, not for credit lines, but to upgrade and build the new infrastructure of Ukraine that will help step-by-step create the basis for a more sustainable future growth.
