Feasibility study of Olvia and Kherson ports presented to labour unions and local authorities

Odessa, Ukraine (Ports Europe) September 6, 2018 - Pilot concession projects in Ukrainian ports are feasible and economically feasible - this is the finding of work by the Consortium of International Consultants, formed by the EBRD. The main conclusions of the experts about the prospects of transfer to the concession of public companies Stevedoring Company Olvia and Kherson Sea Trading Port were represented to labour unions and the representatives of local authorities. The success of the two projects is evidenced by the forecast in the increase in cargo handling, allocations to state and local budgets, and the volume of investments in the development of port infrastructure facilities. In addition, it has led to further employment guarantees for workers of the enterprises. "Financial analysis shows that the concession is economically justified for the investor even with moderate volumes of transshipment and with conservative forecasts of future tariffs for services," said Oleg Kudashov, investment specialist at the International Finance Corporation (IFC). So, in Stevedoring Company Olvia, according to the study, cargo handling can increase almost two times, from 2.55 million tons in 2018 to 4.59 million tons in 2025, and in Kherson - from 1, 1 million tons to 2.01 million tons. In addition, according to the calculations of international consultants, the concession is also beneficial for the city - the income to the local budget of Nikolaev from the transfer to the concession of the stevedoring company IC Olvia and its further economic activity for the first five years (from 2020 to 2025) under the optimistic scenario can grow a factor of two (by $241 million/€206.4 million); and in Kherson $55 million/$47.3 million. The concession projects also envisage significant investments in the development of transport infrastructure of the regions where the ports are located. Transport problems of cities are being solved with construction of new overpasses and interchanges, and the creation of parking lots for trucks. This will significantly reduce the burden on urban highways when transporting goods to ports and will ensure greater safety and sustainable road maintenance. During the presentation of the projects, the State Secretary of the Ministry of Infrastructure Andrei Galushchak noted that the ministry pays special attention to ensuring that the future concessionaire can fully provide social guarantees for the labour force. One of the criteria for selecting a concessionaire will be the program proposed by the participants in the competition to increase the economic performance of enterprises. Training is planned at the stage of construction of a new and modernization of existing reloading equipment for employees, advanced training and retraining. This will increase the professional level of labour collectives, increase productivity and competitiveness of enterprises in general. During the discussion of the feasibility study of concession projects for state-owned stevedoring companies, trade unions initiated a number of additions to them. First of all, the ministry is talking about the preservation of wages and an annual indexation and the extension of the collective agreement for five years. It was also stipulated that compulsory staff reduction in the process of concession projects implementation is not allowed, added Galushchak. Chairman of the Trade Union of Maritime Transport of Ukraine Mikhail Kireev said that he asked the consultants of the feasibility study and representatives of the Ministry of Infrastructure with a proposal to establish a supervisory body to monitor the implementation of the requirements of the concession agreement, which including representatives of trade unions. Source: Ukrainian Sea Ports Authority (USPA) Copyright (C) Ports Europe. All Rights Reserved. 2018.

Feasibility study of Olvia and Kherson ports presented to labour unions and local authorities

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Feasibility study of Olvia and Kherson ports presented to labour unions and local authorities

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All news

HHLA CTA terminal receives first remote-controlled container gantry crane

EBRD lends finance to Casablanca & Jorf Lasfar, Morocco

Update: Kerch Strait- a deadly trap for ships

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Our Expert Analysis

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Top Ports