Andrii Pidhainyi, partner and co-head of Transport & Infrastructure practice
Olena Yurets, senior associate of Transport & Infrastructure practice
Construction of terminals and guarantees of compensation for damage to vessels: A step forward with new legislation
Under martial law, Ukraine faced a number of challenges related to export and import logistics. Deliveries took place only within the grain corridor or were reoriented to the railway infrastructure through the western corridors. New terminals became crucial in changing logistics routes, with their rapid construction made possible by amendments to the legislation last summer as well as thanks to simplified procedures and resolution of land issues. About 20 new terminals started operating on the Danube last year, and 12 more are under construction. The development of new terminals is vital for Ukraine's logistics, as it is becoming more difficult for Ukrainian agricultural traders to transport agricultural products to buyers following russia's refusal to extend the grain deal. It is important that the State is taking steps to provide security guarantees. The budget for 2023 allocates UAH 20 billion as a guarantee of compensation for damage caused to charterers, operators or shipowners due to russia's armed aggression against Ukraine. In addition, in May, a procedure for compensating damages to civilian vessels was adopted, which encourages shipowners to declare their readiness to continue operations despite the suspension of the grain agreement.
Entry into force of law on waste management: A step towards compliance with EU standards
In July 2023, the Law of Ukraine "On Waste Management" came into effect. It establishes mechanisms for waste collection, recycling and disposal and approximating Ukraine to EU legislation. The PPP mechanism in this sector will alleviate the financial burden on local government bodies and enable the transfer of operational functions to a private partner, who will be able to carry out the construction, reconstruction, and servicing of household waste treatment facilities.
Industrial parks: Despite risks, they continue to develop
The use of industrial parks in Ukraine offers an opportunity to reduce tax burden, save on infrastructure construction, and streamline logistics. Since the beginning of the full-scale invasion, we have seen that Russia is interested in keeping Ukraine's economy stagnant, which is why it carries our targeted missile attacks against enterprises. Accordingly, the location of several enterprises in one place endangers the activities of the industrial park participants. Despite the risks, industrial parks continue to develop. Since the beginning of the fullscale invasion, 13 industrial parks have been registered, while 64 parks have been entered in the register in total.
Resumption of the Great Privatization: Potential opportunities for the economy
The large-scale privatization was suspended in the summer of 2022. However, on 20 June 2023, was signed a law to resume the process. Large-scale privatization is an important step to accelerate Ukraine's economic development and attract foreign investment. However, there is little time left this year to thoroughly prepare an asset for sale, and it is likely that "large objects" will be sold as early as next year. Now the State can focus on high-quality preparation for the sale, thus being able to sell the asset for a higher price. Potentially interesting assets include the Ocean Plaza Shopping Mall, the United Mining and Chemical Company, and Zaporizhzhia Titanium and Magnesium Plant. The sale of large-scale privatization objects will be resumed under updated procedures – through the ProZorro. Sale system. This would partially protect electronic auctions from disruption by unscrupulous participants.
Special for The LIR