Ukrainian secondary seaports will be revamped

Photo: PHL

Ukraine has intensified its efforts in developing small and medium sized commercial seaports (CSP). In late August the Administration of Seaports of Ukraine (ASPU) started dredging at the Skadovsk commercial seaport. It is projected that by October the depth of the entry channel and the water area will be 6 meters, which will allow for resumption of ferry services between Ukraine and Turkey with a capacity of 12–14 vessels per month. The estimated cost of dredging operations of around UAH 10 mn will be financed by the ASPU.

Needs

The need for dredging is due to the increasing tonnage of the fleet entering Ukrainian seaports, say representatives of the ASPU. Representatives of the administration also say that the need for the use of commercial seaports rose after the loss of Crimea and reorientation of cargo from ports in the peninsula to the CSPs in mainland Ukraine.

As of today the average draft of modern ferries, cruising in the Black Sea, is approximately 6 meters. For comparison, the last time the Skadovsk port dredged its water area in 2006, which significantly affected its competitiveness and in 2014 almost resulted in complete shutdown. The administration plans to start dredging in another eight small and medium CSPs by the end of the year.

In particular, commenting on the situation at the company the head of the Reni Sea Port Serhiy Stroya said that recently, thanks to Moldovan investors, it started construction of the grain terminal, which would double the capacity of the port’s grain shipment up to 1 mn t per year. «Currently, the port is looking for new customers because its performance indicators have significantly decreased after withdrawal of Russian cargo. We expect to attract Moldovan grain exporters,» says Stroya. First Deputy Chair of the ASPU Yuriy Vaskov said in a conversation with Capital that Moldovan investors were planning to invest in the port in Reni millions of dollars.

Plans

At present there are 8 operating support ports on the Black Sea coast: Ust-Dunaisk (reshipment of transit, foreign trade and coastal cargos, warehouse operations), Bilhorod-Dnistrovskiy (grains, timber, general cargos, livestock, mineral and construction materials), Reni (general and bulk cargos, vehicles), Skadovsk (cargo and passenger and car ferry transportation), Kherson (general, loaded and bulk cargos), Ismail (general, bulk cargos, containers), Mykolaiv (ferrous and non-ferrous metals, ore, pellets, ferroalloys, clay, bulk fertilizers, grains and food cargos) and Oktyabrsk seaport (general cargos).

Earlier this year the ASPU approved the program for development of all ports for the next 24 years. The administration expects that implementation of these plans will take place as a public and private partnership. For example, the Ust-Dunaisk port will work to increase the capacity for reshipment of grains by 0.8 mn t per year. The port of Izmail will create additional capacities for reshipment of fertilizers (0.4 mn t) and liquid cargos (2.2 mn t). Skadovsk port planned the construction of facilities for reshipment of cargos with a capacity of 1.6 mn t., the Kherson port plans to build a container terminal for 20,000 TEU and facilities for reshipment of coal, coke and inert cargos with a total capacity of 1.6 mn t and the Mykolaiv port plans to build up reshipment of different types of cargos by 6.5 mn t.

Problems

By the end of August the ASPU received applications for implementation of the majority of the works with respect to these investment projects. Today, however, there are factors limiting investment activities. One of the main problems in the industry are the bureaucratic procedures for approval of investment projects, so that from the moment when the company announces its interest in investment in certain facilities several years may pass before its actual construction, says Vaskov. He added that the government gave way to the port workers and has already registered a number of bills in the parliament allowing for the privatization of non-strategic facilities in ports and reduction of bureaucratic procedures.

Director of Hermes Trading (involved in transportation of cargo by water) Yuriy Skichko said to stimulate the development of small and medium-sized ports Ukraine can apply a special preferential tariff policy that will reduce the burden, which forms the cost value and will provide an opportunity to compete with large ports more effectively by attracting large vessels.