Agreement signed for concession agreement for Kherson Sea Commercial Port

Kherson, Ukraine (Ports Europe) June 26, 2020 - Ukraine has signed the agreement on the concession of the Kherson Sea Commercial Port, the first agreement of its kind in the country. The concessionaire company Risoil-Kherson LLC will invest around UAH 300 million in the development of the port and more than UAH 18 million in local infrastructure. “Today we are transferring to concession the first large-scale facility in Ukraine - the Kherson Sea Commercial Port. For the company itself, this means not only stable further development and jobs for people, but also the well-being of the entire city and region. Thanks to the modernization of the port of Kherson, we will create favourable conditions for economic growth. We planned to sign concession agreements with the ports of Olbia and Kherson in the future, but the quarantine has created delays. However, despite various circumstances, having passed this difficult path, today we are completing the work,", said Vladyslav Krykliy, Minster of Infrastructure. The International Finance Cooperation (IFC), in cooperation with the European Bank for Reconstruction and Development (EBRD), provided full support to the Ministry of Infrastructure in the preparation and conduct of concession tenders in the seaports of Kherson and Olbia. As part of the collaboration, IFC has developed a concession agreement and tender criteria in accordance with international standards and best practices for similar projects. “We would like to congratulate the Government on the successful signing of the first public-private partnership agreement in Ukraine in accordance with the best international practices. The project was developed on the basis of IFC's progressive experience in preparing concession agreements and public-private partnerships, which achieved high results. The Kherson sea trade port will be modernized with the support of the consortium of Risoil SA and the winning Georgian Industrial Group. Such projects will contribute to the economic growth of the state, develop its infrastructure and expand exports. In addition to the forthcoming Olvia Seaport Concession Project, IFC is already developing more than five pilot concession projects to mobilize private sector investment in roads, airports, railways and energy, as well as the healthcare sector", the minister added. Deputy Director of the EBRD in Ukraine Mark Magaletsky noted that the bank is proud of its participation in the preparation of this extremely important concession project. “The Kherson project illustrates opportunities for investment in the transport sector of Ukraine, opening it to global carriers and stevedoring companies, as well as facilitates the implementation of concession projects in other sectors. We congratulate the Government of Ukraine on this achievement and wish success to Risoil and Georgian Industrial Group in the implementation of the project, "said Mark Magaletsky. According to the agreement, the concessionaire of Risoil-Kherson LLC is granted the exclusive right to create, build and manage the Kherson sea trade port for the purpose of its modernization and further development. The concession period will last 30 years. The Concessionaire undertakes: annually pay a concession payment in the amount of at least UAH 12 million, taking into account indexation and 7% of the net income of the concessionaire;during the first 3.5 years from the date of the end of the transition period to invest in the object at least UAH 216 million, and during the first 10 years - at least an additional UAH 62 million (in 2019 prices);to ensure the volume of transshipment of cargo at the port in 2030 at the level of not less than 1.36 million tons;to contribute to the development of local infrastructure at least UAH 18 million, including to provide co-financing for the overhaul of the road surface on the way to the port and a new parking lot outside the city;to promote an increase of up to 80% of the share of cargo going to the port using rail, inland waterway and other modes of transport, except road;to ensure continuous operation of the port;to transfer all employees of the Kherson seaport and part of the employees of the Seaports Administration of Ukraine, not allowing their dismissal on their own initiative or on the initiative of their authorized body within 10 years from the date of hiring the concessionaire;not to allow reduction of salaries of employees during the first 3 years from the moment of their hiring by the concessionaire, increasing the level of PA in accordance with the legislation and taking into account the Sectoral Agreement;comply with the necessary requirements of environmental legislation and take measures to protect the environment, etc. According to Vladislav Krykliy, the Ministry also continues to work actively on the concession of important road construction facilities, airports and railway stations. Public-private partnership remains a priority. Risoil-Kherson LLC is a consortium consisting of Petro Oil & Chemicals LLC, part of the Georgian Industrial Group, and the Ukrainian port operator JSC RISOIL SA (Switzerland). Georgian Industrial Group is one of the largest industrial groups in Georgia. GIG operates in various areas of activity with a focus on the energy sector (electricity generation and trade, refuelling and trade in natural gas). GIG is also involved in commercial real estate, building materials and metalworking. The RISOIL group of agro-industrial companies is based in Geneva, Switzerland. RISOIL SA is represented in Ukraine by the following companies: Risoil Terminal - the largest universal export-import terminal for transshipment of Ukrainian edible vegetable oils and cereals in the Black Sea region; "Risoil-South" - oil transshipment terminal in the South; "Rozdilnyansky elevator" (Odessa region); "Marine Technical Center" - specializes in providing comprehensive services for transshipment of containers and bulk cargo. Copyright (C) Ports Europe. All Rights Reserved. 2020.

Agreement signed for concession agreement for Kherson Sea Commercial Port

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Agreement signed for concession agreement for Kherson Sea Commercial Port

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