{"id":789321,"date":"2024-12-04T12:14:32","date_gmt":"2024-12-04T10:14:32","guid":{"rendered":""},"modified":"2024-12-04T18:52:10","modified_gmt":"2024-12-04T16:52:10","slug":"transportna-galuz-potochnyj-stan-vyklyky-ta-perspektyvy-rozvytku","status":"publish","type":"post","link":"https:\/\/new.eba.com.ua\/en\/transportna-galuz-potochnyj-stan-vyklyky-ta-perspektyvy-rozvytku\/","title":{"rendered":"Transport industry: current state, challenges, and development prospects"},"content":{"rendered":"

On 28 November, the European Business Association brought together representatives of transport companies and cargo owners, relevant state authorities, and industry experts at the annual Infrastructure Day. Participants discussed the current state of key transport sectors and the progress of reforms, challenges, and plans, emphasising the need for structural changes. Despite the challenging circumstances, these changes are crucial not only for the country\u2019s resilience but also for laying the groundwork for rapid recovery and future growth.<\/p>\n

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Tymur Enkhbaiar<\/strong>, Counsel at Sayenko Kharenko, and\u00a0Maryna Sharapa<\/strong>, Partner at Arzinger, presented the results of the annual Infrastructure Index survey. The findings included insights on the operational state, damages sustained, investment activities of transport companies, and their business development plans. Companies also identified priorities for market stabilisation, perspectives on toll road implementation, the establishment of a dedicated regulatory body, and the main business challenges. Full survey results are available via the provided link<\/a>.<\/p>\n

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Yulia Klymenko<\/strong>, First Deputy Chair of the Verkhovna Rada Committee on Transport and Infrastructure, highlighted the necessity for Ukraine not only to survive but to make significant developmental leaps, considering the country\u2019s challenging demographic and macroeconomic conditions. According to her, foreign direct investments will form the foundation of Ukraine’s economy, especially in large-scale infrastructure projects requiring significant long-term funding. She stressed the need to create a favourable environment for new capital through legislative tools such as public-private partnerships (PPPs), including concessions.<\/p>\n

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Serhii Derkach<\/strong>, Deputy Minister for Communities and Territorial Development of Ukraine, acknowledged that the full-scale invasion had slowed critical reforms in the industry, including PPP mechanisms, concessions, and private road initiatives. However, these remain priorities for the Ministry, which is working on a national roadmap for their implementation to support Ukrainian businesses and attract foreign investments into transport infrastructure. Efforts are also underway to digitise and deregulate the road transport sector, alongside developing training programmes to address the industry\u2019s labour shortages.<\/p>\n

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\u201cDespite the war, we are not afraid of the word \u2018reform\u2019,\u201d said\u00a0Oleksandr Kamyshin<\/strong>, Adviser to the President of Ukraine on Strategic Issues and a Supervisory Board Member of Ukrzaliznytsia. Kamyshin discussed railway development, partnerships with European allies on infrastructure projects, and efforts to protect and restore infrastructure. His team remains focused on active railway development and resuming pre-war reform momentum.<\/p>\n

Currently, projects totalling over \u20ac100 million are being implemented within the CEF framework, with the EU funding half the cost. Kamyshin expressed dissatisfaction with the project timelines, emphasising the need for EU funding opportunities while restoring business-required work paces.<\/p>\n

Further increases in railway freight tariffs are expected, but they will be implemented within a long-term planning framework. Ukrzaliznytsia plans to adopt a financial plan by year-end and will engage in further discussions with businesses regarding tariff adjustments. Additionally, the company\u2019s strategy for development through 2030 will be presented for public discussion in the coming quarter. Kamyshin assured, \u201cAll necessary reforms within Ukrzaliznytsia will be implemented.\u201d<\/p>\n

Investments During Wartime: Military Risk Insurance<\/strong><\/p>\n

The discussion participants explored state incentives for investments, the prospects of public-private partnership (PPP) mechanisms, and the establishment of an effective system for insuring military risks. Representatives of businesses and state institutions shared their views on key tools to support the economy and attract investments in the current environment. Particular attention was given to infrastructure development opportunities and the impact of new legislative initiatives on market operations.<\/p>\n

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Serhiy Sukhomlyn<\/strong>, Head of the State Agency for Restoration and Infrastructure Development of Ukraine, outlined the agency’s immediate plans:
\n“We are focusing on implementing reconstruction projects in communities. This includes building a water supply system in Mykolaiv, replacing public lighting with energy-efficient systems, and constructing social housing. Regarding roads and bridges, we prioritize requests from the military. This remains our top priority. Additionally, we are working on enhancing border checkpoints to boost cargo traffic volumes.”<\/p>\n

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Ihor Marchuk<\/strong>, Head of the Subcommittee on State-Business Interaction and Investments of the Verkhovna Rada Committee on Economic Development, emphasized that the Law \u201cOn State Support for Investment Projects with Significant Investments in Ukraine\u201d has met expectations and is already in full operation.
\n“Two special investment agreements with a total investment of over UAH 4 billion have been signed. Three more projects, with a declared investment volume exceeding UAH 15 billion, are at the second stage of evaluation. We are also actively finalizing the PPP bill, incorporating recommendations from both European partners and businesses. This is a critical piece of Euro-integration legislation and a key step in attracting investments to Ukraine, and we hope it will be passed soon.”<\/p>\n

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Oleksandr Kava<\/strong>, Deputy Minister of Finance of Ukraine, noted that while the defense sector remains a priority, investment in transport infrastructure is also essential. The Ministry is allocating funds for purchasing passenger railcars and developing rail transport. He also highlighted the Law \u201cOn Industrial Parks\u201d as an effective tool to stimulate small and medium-sized businesses, fostering the establishment of high-value-added production facilities.<\/p>\n

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Serhiy Savchuk<\/strong>, Director of the Department of Methodology\u00a0for Regulation Non-Banking Financial Institutions at the National Bank of Ukraine, discussed key areas of refinement for the military risk insurance bill based on market feedback:
\n“Military risk insurance is one of the key tools for supporting the development of the national economy. Our discussions have been very dynamic. We\u2019ve listened to proposals from businesses and external partners and made amendments to the bill to reflect the positions of both sides.”<\/p>\n

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Andrii Pidhainyi<\/strong>, Managing Partner at Arzinger, stated that government support and dialogue between businesses and authorities remain the foundation for Ukraine\u2019s economic development during wartime. “The introduction of military risk insurance mechanisms, infrastructure development, and the establishment of industrial parks create opportunities for attracting investments and supporting Ukrainian businesses under extremely challenging conditions.”<\/p>\n

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Mykhailo Kravchenko<\/strong>, Deputy Head of Transshipment and Fleet Operations at Kernel, emphasized the importance of terminal infrastructure and investments in this area: “Even during difficult times, we continue to invest in infrastructure and rolling stock. Our primary investment focus is terminal infrastructure, which is critically important for ensuring supply chain continuity. We are ready to invest in this and develop partnerships with other businesses because we believe that only through collaboration can our investments succeed.”<\/p>\n

Development of the Transport Sector in 2025<\/strong><\/p>\n

During this panel discussion, speakers examined legislative changes in railway transport, the necessity for unified coordination in the railway sector, the importance of tariff policy stability, as well as the successes of privatisation and plans for 2025.<\/p>\n

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Artem Kovaliov<\/strong>, Head of the Subcommittee on Railway Transport of the Verkhovna Rada Committee on Transport and Infrastructure, noted that the working group spent nearly two years drafting Law No. 12142. Over this time, practitioners, business representatives, and industry experts were actively involved in the discussions.<\/p>\n

The next steps for this legislative act include consideration by relevant committees, preparation of conclusions, presentation to MPs for review, and the submission and discussion of amendments between the first and second readings.<\/p>\n

Additionally, the Committee is focusing on establishing a system of PSO (Public Service Obligation) contracts for passenger transport and preparing a new draft law on the National Transport Regulatory Commission (NTRC).<\/p>\n

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Oleksandr Pertsovskyi<\/strong>, Chairman of the Board at JSC Ukrzaliznytsia, stressed that any transformation within Ukrzaliznytsia must preserve the company’s governance:
\n“Without effective governance, we could not have played such a critical role in strengthening the country\u2019s defence capabilities and rescuing civilians during the full-scale war. This is now recognised by our European counterparts.”<\/p>\n

He also highlighted the unresolved issue of funding sources for passenger transport and infrastructure: “Clearly defined funding sources are essential. For passenger transport, this could involve allocations from the state and local budgets. For infrastructure projects, additional funding, such as from international funds, could be utilised.”<\/p>\n

Regarding freight tariffs, Pertsovskyi urged the avoidance of politicisation:”Tariff indexing should occur annually in line with producer price indices. This would eliminate the need for sudden price hikes. However, for unknown reasons, tariffs were not reviewed for years. The last adjustment occurred in 2022, but since then, costs for resources such as diesel fuel have surged by 160%, along with significant increases in electricity expenses.”<\/p>\n

He added that Ukrzaliznytsia intends to openly discuss freight tariff changes: “We are not aiming for super-profits; our focus is on covering operational expenses and essential capital expenditures. It is also vital to ensure wage indexing for railway workers, as freight transport would be impossible without them. Currently, average wages in the sector are below the industry average, with certain professions experiencing a 30% personnel deficit.”<\/p>\n

At the same time, Pertsovskyi assured that these changes must not drive shippers away from the railway. Ukrzaliznytsia is ready to offer long-term wagon contracts and explore optimal class alignment formats: “Our primary goal is to cover transportation costs.”<\/p>\n

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Ivanna Smachylo<\/strong>, Acting Head of the State Property Fund of Ukraine, emphasised the importance of divesting non-core assets, including in the port industry. She noted that privatisation processes in Ukraine have significantly accelerated, generating nearly UAH 11 billion in revenue against a plan of UAH 4 billion. The average competition level at auctions has risen from 2-2.5 to over 5.5 participants.<\/p>\n

Smachylo highlighted that most state-owned enterprises transferred to the Fund are unprofitable, making each sale an opportunity to revitalise these assets. Transparent leasing of state property is also essential, as a significant portion of space is used illegally. In 2025, the Fund plans to continue privatisation efforts, including large infrastructure and industrial facilities.<\/p>\n

A heartfelt thank you to the speakers and participants for their insightful contributions and discussions. Special thanks to our event partners \u2013 Arzinger and Sayenko Kharenko \u2013 for their expert and organisational support!<\/p>\n

Partners<\/strong><\/p>\n

\"\"<\/a>\u00a0 \"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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