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The transport infrastructure does not fully meet the modern requirements of doing business

15/ 06/ 2021
    Ukraine has a well-developed infrastructure network that includes railways, highways, seaports and river terminals, airports, and air connections that creates the necessary preconditions for the provision of transport services and business development. However, logistics experts are quite reluctant to assess the state of the development of transport infrastructure. Therefore, according to the results of the expert study of the European Business Association Infrastructure Index, currently logistics experts are quite restrained in assessing the state of development of transport infrastructure. The majority, namely 54% of respondents, consider the general state of infrastructure in Ukraine satisfactory, 35% say it is unsatisfactory, and another 11% assess it positively. In other words, the current state of Ukraines transport infrastructure does not fully meet the modern requirements and realities of doing business. Currently, it fails in fostering the efficiency and competitiveness of the transport sector and attracting foreign investment.  That is why on June 11, 2021, the EBA Southern Ukrainian office and the Interlegal Law Firm with the support of “UPSS Terminals” and Mykolayiv Shipyard “Ocean” held Expert Talks in Mykolayiv for specialists in transport, port industry, sea transportation, shipbuilding, and ship repair factories, terminals and fleet operators, logistics and shipping companies, traders. Together with invited experts and guests, the community discussed the latest changes in legislation, key trends, and prospects for the development of inland waterways, the state of the shipbuilding industry in Ukraine, protection from the authorities’ pressure in seaports, arrest of vessels, and more. Opening the event, Kateryna Morozova, Head of the EBA Southern Ukrainian office, shared the Associations experience in reforming the maritime, river, and port industries presented the EBA strategic plans and research and voiced business visions for the development of transport infrastructure in the region. First, business emphasizes the need for a political decision at the level of the Government, the Ministry of Infrastructure, and the State Property Fund to start privatization processes in all domestic ports. The second important step is to improve the legislation on privatization and lease of state property because the current regulations contain a number of shortcomings that create obstacles to the successful application of these legal instruments to attract large-scale investment in the port sector. Third, at the end of last year, the long-awaited law “On Inland Water Transport” was adopted. Therefore, the Ministry now faces an equally ambitious task of updating the regulations in connection with the adoption of this sectoral law. Moreover, EBA supports the concession as an effective tool, and the EBA member companies actively participate in all concession tenders. Besides, it is important to improve the legal regulation of construction on lands occupied by public inland waterways (for unambiguous interpretation and application of these rules and reduced over-regulation of relevant processes). Dmytro Falko, Secretary of the Mykolayiv City Council, emphasized the relevance of expert discussion Transportation & infrastructure in Mykolayiv. After all, it provides an opportunity to develop new ways of development and effective solutions to existing problems. According to Dmytro Falko, the marine complex plays one of the key roles in the life of modern Mykolayiv. Therefore, being a host of a roundtable about the port industry is an important event for the city. “I am glad that this event is held under the auspices of EBA, as the Association is a reliable business partner in GR. For my part, I would like to add that, at one time, I, as a representative of UPSS Terminals, participated in the development of white papers for rail and marine industries. And I know for sure that now these documents are on the desks of major decision-makers, said Dmytro Falko and thanked the organizers of the event for the initiative. Artur Nitsevych, Partner of Interlegal Law Firm, Chairman of the EBA Legal Committee in Odesa, spoke about the companys activities and reminded the participants that the concept of live meetings in the regions was actively discussed in November 2019 at the 20th anniversary of the EBA in Kyiv. “We want to implement the idea of ​​decentralization and come to Mykolayiv, Kherson and receive fresh insights. We want to hold conferences and seminars for local businesses at a decent level. And today we will share with you the latest news of the transport industry and, in particular, our own experience in resolving disputes on the example of real case studies. After all, our company has been engaged in consulting and providing legal services for more than 25 years in the fields of transport, shipping, and international trade. We have worked with absolutely all participants of the transport process - shipowners, charterers, terminals, brokers, and agents. During this period, we have gained a lot of experience, which we can share with other market participants during the regular events of the EBA in Mykolayiv - said Mr. Nitsevych. Serhii Hurskyi, General Director of the Mykolayiv Shipyard “Ocean”, invited the participants to understand in more detail the trends in the development of the ship repair market in Ukraine. Thus, according to Mr. Hurskyi, the key market participants practically do not participate in the ship repair program of state orders. “Of course, factories must increase the share of export orders, but for the development of any company there must be a stable load, which allows to plan and implement innovations and technologies, leads to an increase in real wages and employment. In recent years, Ukrainian factories have built few ships, and if we talk about exports, these are only two plants, including “Ocean”. That is why shipyards survive due to ship repair and non-core activities, ”said Mr. Gursky and presented proposals for state support for the industry. Thus, it is necessary to normalize the requirements for companies that can apply for tenders for civil ship repair, similar to those currently in force for the repair of ships of the Ukrainian Navy, to improve the conditions of financial lending to shipbuilding facilities through state compensation or bank guarantees. In turn, Iryna Voievodyna – Partner, Interlegal and leading lawyers of the company - Dmytro Ochkolias, Vitalii Tolstyk, Andrii Kaftanov, Mykyta Kocherba - shared useful practical advice on industry issues including the arrest and release of vessels as a guarantee for the implementation of the ship repair contract, protection from abuse of public authorities in seaports, the benefits of litigation in the ICAC arbitration, current tax news. A lively discussion of the report and further communication contributed to a better understanding of points of view on urgent issues and the expansion of business contacts. Thus, the business expects the necessary changes in the development of inland waterway transport, establishing conditions for investment in the port industry, its inclusion to land infrastructure, improving the efficiency of ports, creating prerequisites for the development of the shipbuilding industry, and more. The European Business Association is sincerely grateful to all the experts who joined the event to talk openly and professionally about the existing problems and challenges.
01/

 

Ukraine has a well-developed infrastructure network that includes railways, highways, seaports and river terminals, airports, and air connections that creates the necessary preconditions for the provision of transport services and business development. However, logistics experts are quite reluctant to assess the state of the development of transport infrastructure. Therefore, according to the results of the expert study of the European Business Association “Infrastructure Index”, currently logistics experts are quite restrained in assessing the state of development of transport infrastructure. The majority, namely 54% of respondents, consider the general state of infrastructure in Ukraine satisfactory, 35% say it is unsatisfactory, and another 11% assess it positively.

In other words, the current state of Ukraine’s transport infrastructure does not fully meet the modern requirements and realities of doing business. Currently, it fails in fostering the efficiency and competitiveness of the transport sector and attracting foreign investment. 

That is why on June 11, 2021, the EBA Southern Ukrainian office and the Interlegal Law Firm with the support of “UPSS Terminals” and Mykolayiv Shipyard “Ocean” held Expert Talks in Mykolayiv for specialists in transport, port industry, sea transportation, shipbuilding, and ship repair factories, terminals and fleet operators, logistics and shipping companies, traders.

Together with invited experts and guests, the community discussed the latest changes in legislation, key trends, and prospects for the development of inland waterways, the state of the shipbuilding industry in Ukraine, protection from the authorities’ pressure in seaports, arrest of vessels, and more.

Opening the event, Kateryna Morozova, Head of the EBA Southern Ukrainian office, shared the Association’s experience in reforming the maritime, river, and port industries presented the EBA strategic plans and research and voiced business visions for the development of transport infrastructure in the region. First, business emphasizes the need for a political decision at the level of the Government, the Ministry of Infrastructure, and the State Property Fund to start privatization processes in all domestic ports. The second important step is to improve the legislation on privatization and lease of state property because the current regulations contain a number of shortcomings that create obstacles to the successful application of these legal instruments to attract large-scale investment in the port sector. Third, at the end of last year, the long-awaited law “On Inland Water Transport” was adopted. Therefore, the Ministry now faces an equally ambitious task of updating the regulations in connection with the adoption of this sectoral law. Moreover, EBA supports the concession as an effective tool, and the EBA member companies actively participate in all concession tenders. Besides, it is important to improve the legal regulation of construction on lands occupied by public inland waterways (for unambiguous interpretation and application of these rules and reduced over-regulation of relevant processes).

Dmytro Falko, Secretary of the Mykolayiv City Council, emphasized the relevance of expert discussion “Transportation & infrastructure” in Mykolayiv. After all, it provides an opportunity to develop new ways of development and effective solutions to existing problems. According to Dmytro Falko, the marine complex plays one of the key roles in the life of modern Mykolayiv. Therefore, being a host of a roundtable about the port industry is an important event for the city. “I am glad that this event is held under the auspices of EBA, as the Association is a reliable business partner in GR. For my part, I would like to add that, at one time, I, as a representative of “UPSS Terminals”, participated in the development of white papers for rail and marine industries. And I know for sure that now these documents are on the desks of major decision-makers, “said Dmytro Falko and thanked the organizers of the event for the initiative.

Artur Nitsevych, Partner of Interlegal Law Firm, Chairman of the EBA Legal Committee in Odesa, spoke about the company’s activities and reminded the participants that the concept of live meetings in the regions was actively discussed in November 2019 at the 20th anniversary of the EBA in Kyiv. “We want to implement the idea of ​​decentralization and come to Mykolayiv, Kherson and receive fresh insights. We want to hold conferences and seminars for local businesses at a decent level. And today we will share with you the latest news of the transport industry and, in particular, our own experience in resolving disputes on the example of real case studies. After all, our company has been engaged in consulting and providing legal services for more than 25 years in the fields of transport, shipping, and international trade. We have worked with absolutely all participants of the transport process – shipowners, charterers, terminals, brokers, and agents. During this period, we have gained a lot of experience, which we can share with other market participants during the regular events of the EBA in Mykolayiv “- said Mr. Nitsevych.

Serhii Hurskyi, General Director of the Mykolayiv Shipyard “Ocean”, invited the participants to understand in more detail the trends in the development of the ship repair market in Ukraine. Thus, according to Mr. Hurskyi, the key market participants practically do not participate in the ship repair program of state orders. “Of course, factories must increase the share of export orders, but for the development of any company there must be a stable load, which allows to plan and implement innovations and technologies, leads to an increase in real wages and employment. In recent years, Ukrainian factories have built few ships, and if we talk about exports, these are only two plants, including “Ocean”. That is why shipyards survive due to ship repair and non-core activities, ”said Mr. Gursky and presented proposals for state support for the industry. Thus, it is necessary to normalize the requirements for companies that can apply for tenders for civil ship repair, similar to those currently in force for the repair of ships of the Ukrainian Navy, to improve the conditions of financial lending to shipbuilding facilities through state compensation or bank guarantees.

In turn, Iryna Voievodyna – Partner, “Interlegal” and leading lawyers of the company – Dmytro Ochkolias, Vitalii Tolstyk, Andrii Kaftanov, Mykyta Kocherba – shared useful practical advice on industry issues including the arrest and release of vessels as a guarantee for the implementation of the ship repair contract, protection from abuse of public authorities in seaports, the benefits of litigation in the ICAC arbitration, current tax news.

A lively discussion of the report and further communication contributed to a better understanding of points of view on urgent issues and the expansion of business contacts. Thus, the business expects the necessary changes in the development of inland waterway transport, establishing conditions for investment in the port industry, its inclusion to land infrastructure, improving the efficiency of ports, creating prerequisites for the development of the shipbuilding industry, and more.

The European Business Association is sincerely grateful to all the experts who joined the event to talk openly and professionally about the existing problems and challenges.

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