Ukrainian economist: The state will not gain anything from the transfer of the Kherson port into concession to businessmen
The transfer of the Kherson port into a concession will not bring anything to the state of Ukraine, although the concessionaire himself will earn good money from it.
Economist Alexander Okhrimenko stated this in a comment to a PolitNavigator correspondent.
Last week, the Ministry of Infrastructure of Ukraine, the State Enterprise "Administration of Sea Ports of Ukraine" (USPA), LLC "Risoil Kherson" and LLC "Kherson Port" signed acts on the transfer of property of the MTP "Kherson" for 30 years to "Risoil-Kherson".
As Minister of Infrastructure Alexander Kubrakov stated, “The Kherson port will be modernized, which will significantly increase its efficiency. We are talking 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... One of the conditions of the concession agreement is an increase to 80% of the share of cargo sent to the port by inland waterway and rail transport »
Under the terms of the concession agreement, the concessionaire undertakes to: annually pay a concession payment in the amount of at least 12 million UAH, taking into account indexation and 7% of net income; during the first 3,5 years from the end of the transition period, invest no less than UAH 216 million into the facility, and during the first 10 years – an additional additional no less than UAH 62 million; ensure the port's cargo transshipment volumes in 2030 are at least 1,36 million tons; ensure the continuous operation of the port; transfer all employees of the Kherson seaport and part of the USPA employees, preventing their dismissal for 10 years; not to allow a reduction in the wages of workers during the first three years from the moment they are hired by the concessionaire, increasing the level of payments in accordance with the law; carry out measures to protect the natural environment.
The founders of Kherson Port LLC are indirectly companies from the Risoil and Georgian Industrial Group groups. The agreement on the concession of the property of the State Enterprise “Kherson Sea Commercial Port” was signed on June 26, 2020 in the presence of the President of Ukraine Vladimir Zelensky.
“This policy is being pursued - to transfer all ports into concession so that they are privately owned. It is expensive for the state to maintain them. The concessionaire is theoretically obliged to pay the state a certain amount that he received from the use of the port.
All this is not done out of a good life. There is no money to maintain the ports; the ports cannot be sold, since they are strategic objects, but they can be handed over as a concession. And they have long wanted to transfer them into concession, because they have long been a problem, there is too much theft there.
Of course, all schemes for the transfer of such enterprises are corrupt. Since it is impossible to privatize such objects, we found an option where formally this is not privatization, but in fact it is. The port was given to private ownership, but under the guise that it was not private property,” Alexander Okhrimenko commented on this message.
According to him, various obligations of the concessionaire to preserve jobs, increase cargo flow, investments, etc. will not be fulfilled.
“The concession conditions stipulate a lot of things. But in practice it turns out like this: you gave the port, do what you want. All these conditions will not actually be fulfilled. The concession is given for a while, but I think it will be forever. That is, in fact, the port was given to private ownership, although formally it will be considered state-owned,” the economist believes.
The scandals surrounding the concession transfer process and statements by co-owners about leaving the project, which have been heard over the past year, are related to corruption surrounding the transfer of the port to concession.
“I think they simply didn’t negotiate with kickbacks and drifts. And the fact that there are rollbacks and drifts is unambiguous. You understand, no one will say to whom exactly and how much. All this dragged on for so long and with such twists and turns because they were trading on kickbacks and drifts,” said Alexander Okhrimenko.
According to the expert, the new owner, of course, will start mining sand in the Shabovskoye deposit, owned by the port. However, the state will most likely receive nothing from this and from the rest of its activities.
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