Today, December 23, the Kherson Sea Commercial Port was successfully transferred into the concession of Risoil-Kherson LLC within the framework of a 30-year Public-Private Partnership. Acts on the property transfer were signed between the Ministry of Infrastructure of Ukraine, the State Enterprise “Ukrainian Sea Ports Authority”.
LLC “Risoil-Kherson” and LLC “Kherson Port” together with the Ministry of Infrastructure of Ukraine, State Enterprise Kherson Sea Commercial Port, the PPP Management office SPILNO, SE “Ukrainian Sea Ports Authority” and a group of consultants and advisors ensured compliance with the prerequisites of the Concession Agreement.
The concessionaire – LLC Kherson Port plans to upgrade and renovate equipment and warehouses mechanization, install additional silos, for which an investment schedule has been approved and technical projects have been developed.
According to the Concession Agreement, the concessionaire undertakes to invest at least UAH 216 million in the facility during the next 3.5 years from the date of the end of the transition period, and at least UAH 62 million during the first 10 years.
The project will enable the government to receive an annual concession fee of at least UAH 12 million (subject to indexing) and 7% of the net profit of the concessionaire.
According to the Concession Agreement, the concessionaire company LLC Kherson Port undertakes to:
- ensuring the continuous operation of the port and the volume of port cargo handling in 2030 at the level of at least 1.36 million tons;
- the transfer of all employees of the Kherson Sea Port and some employees of the Ukrainian Sea Ports Authority preserving their jobs for 10 years and maintaining the level of wages for the first 3 years from the date of their concessionaire to hire with higher pay in accordance with current legislation;
- necessary environmental protection measures implementation.
“The Kherson port will be modernized, which will significantly increase its efficiency. It is about at least 216 million investments in the port in the next 3.5 years and at least 18 million UAH for the infrastructure of Kherson. In particular, there are plans to co-finance the overhaul of roads on the way to the port and a new site for trucks outside the city. Capital investments will help realize the potential for the development of inland waterway transport, as the port is located in the Dnipro delta. One of the conditions of the Concession Agreement is to increase to 80% the share of cargo going to the port by inland waterway and rail transport, “said Oleksandr Kubrakov, Minister of Infrastructure of Ukraine.
According to the co-owner of Risoil Group and Kherson Port LLC Alexander Minov: highest-quality preparation allowed to start all work processes in the shortest possible time, a modern approach, new equipment and technologies will be applied, which means not only increasing transhipment but also higher salaries for employees, improving working conditions and safety, compliance with high environmental standards.
For the subsequent management of the concession agreement, the PPP Agency together with the International Finance Corporation (IFC) and the Public-Private Infrastructure Advisory Facility (PPIAF), engaged advisors to support the Ministry of Infrastructure of Ukraine and the SE “USPA”.
We will remind that on the 1st of December the property of State Enterprise “Stevedoring company “Olvia” and the corresponding property of State Enterprise “Ukrainian Sea Ports Authority” was transferred into the Concession to QTerminals Olvia, a part of the QTerminals Group, for 35 years, being the subject of a Public-Public Partnership.
For reference:
The founders of LLC Kherson Port are indirectly Risoil and Georgian Industrial Group companies. The agreement on the SE “Kherson Sea Commercial Port” property transfer to the Concession was signed on June 26, 2020, in the presence of the President of Ukraine Volodymyr Zelensky.
More details on the Ministry of Infrastructure website – https://mtu.gov.ua/news/33335.html