‘Controversial feedback’ stalls Ukrainian privatisation

The compensation agreement for private operators in the Ukraine may take some time to sort out The compensation agreement for private operators in the Ukraine may take some time to sort out
Industry Database

The Ukraine is still debating the draft order on compensation for private operators taking on port infrastructure investments after receiving “controversial feedback”.

This is according to Odessa based legal firm, Interlegal. The firm had already warned that such a provision couldn’t work without an adequate law enforcement method in place.

To this end, it has been working with the government on the draft compensation order which will protect both the state interests and those of its clients, the investors.

The arrangement becomes even more important as new investors will not be liable for all running costs. Administrative functions will be performed by the newly formed Administration of Sea Ports of Ukraine, headed up in Odessa, but with branches at each port.

It will be in charge of the process for port services including pilotage, vessel traffic control, ice breaking etc. But services such as stevedoring, previously handled by the state, will now come under private control.

The new sea ports law came into force in June 2013. It effectively allowed 18 state ports to take advantage of private investment.

It also means that the government can take advantage of private money to improve port infrastructure and will be able to maintain an active amount of control over the process.

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