Last year, the European Union launched programs to support Ukraine’s Azov region, both as part of a policy of sanctions against the aggressor country and as part of measures to restore free navigation in the region and develop the Ukrainian ports of Berdyansk and Mariupol. This proposal was done after the attack on Ukrainian ships in the Sea of Azov, the capture of Ukrainian sailors on Nov. 25, 2018, and the blocking of peaceful merchant ships of other countries by the Russian fleet in the Kerch Strait.
At the Ukraine-EU summit in July 2019, it was decided to provide technical assistance for the preparation of infrastructure projects to improve rail, road, and sea services in the region. Accordingly, the Ministry of Infrastructure of Ukraine and the EU Delegation jointly identified 3 priority projects:
- increasing the capacity and electrification of the railway Zaporizhia – Mariupol;
- overhaul of the M-14 highway on the Kherson-Mariupol section;
- concession of Berdyansk seaport.
Zaporizhia-Mariupol railway consists of 320 kilometers of different sections of railway with different conditions (one track, two tracks, electrified or non-electrified). It is necessary to solve the problem of railway line capacity by creating a direct corridor with the shortest route for freight and passenger trains through Zaporizhia – Polohy – Komysh-Zorya – Volnovakha, and Mariupol. Solving the capacity problem is an alternative to the route that passes through Donetsk as a temporarily occupied territory.
The optimal cost of the project is Hr 11.4 billion (380 million euros) and provides for electrification and two-track. Electrification and development of this railway section is important for freight traffic in the direction of the ports of Mariupol and Berdyansk and reduce the time for passenger traffic by 1.5 hours.
M-14 road 427 kilometer-long connects the ports of Mariupol and Berdyansk on the Sea of Azov with the ports of Kherson, Mykolayiv, Pivdenny, and Odesa in the Black Sea. As one of the main requirements of the EU in the development of TEN-T corridors is the construction of ring roads around cities, the project provides for the completion of the construction of the Melitopol bypass and the construction of a new bypass of Primorsk.
The total cost of the overhaul is Hr 20 billion (670 million euros). The project implementation period of road I (two lanes in each direction) and II (one lane in each direction) category, depends on the amount of traffic – 5 years.
Port of Berdyansk concession is a real mechanism for attracting investment funds into the infrastructure of Donbas. The biggest problem for the Berdyansk port is Russia’s control of the Kerch Strait, which has introduced inspections of vessels entering the Sea of Azov, leading to ship downtime and limiting the surface size of vessels across the Kerch Bridge – the deadweight of the largest vessels that can now enter the Sea of Azov, is less than 20,000 tons.
The bottleneck of the port is a long navigable canal, which provides access to the port of Berdyansk, and which is not always properly maintained passport depths and the lack of modern facilities for grain storage in the port. Problems of Berdyansk port development – lack of electrified tracks and port railway station; congestion in the city of grain trucks and road safety. The future investor will need to organize truck parking and implement operational measures to avoid peak traffic intensities, as well as increase grain storage in the port. The concession fee must be no less than the state port’s income for the last 3 years – so it can be up to 2 million euros per year for a period of 30 years (plus investment in a grain terminal and equipment upgrades).
Azov assistance package is one of the priorities in cooperation between Ukraine and the EU, which makes it possible to finance with the help of credit resources of European banks in the amount of 1 billion euros. These infrastructure projects (according to the analysis of freight and passenger transport of the National Transport Model) are part of the TEN-T Trans-European Transport Network and can be financed by the EIB and the EBRD, as well as on the basis of public-private partnership.
By the next EU-Ukraine summit in October 2020, the government needs to determine which projects shall be implemented, how much European Investment Bank/European Bank for Reconstruction and Development credit can be raised and what can be subject of EU technical assistance in the face of the economic crisis and consequences of the COVID-19 pandemic (such as developing a feasibility study or improving passenger services).
Viktor Dovhan deputy minister of infrastructure of Ukraine on European integration (2016-2019).
