Port concession tender in Mykolaiv to bring $140 million to Ukraine

By Beatrice Hudson. Published Jan. 24 at 7:17 pm

Ukraine’s seaport Olvia operates in Mykolaiv Oblast. Qatari terminal operating company QTerminals has won a multimillion concession tender in Olvia. As a result, Ukraine will receive $140 million in investment in the next five years.Photo by Stevedoring company “Olvia”

Qatari terminal operating company QTerminals has won a multimillion concession tender in Olvia, a 180-hectare seaport in southern Mykolaiv Oblast, Ukrainian Infrastructure Minister Vladislav Kryklii wrote on Facebook on Jan. 24.

As a result, Ukraine will receive $140 million in investment in the next five years, as well as another $3.3 million every year as a concession fee from QTerminals, a paycheck 16 times larger than the port’s profits in 2019.

“This is one of the largest foreign investments in the port industry, in the whole history of Ukrainian independence,” Kryklii said. “The move by this company gives a unique opportunity to modernize the port of Olvia, bring the work of the port and the level of related navigation and logistics services to the best international standards.”

QTerminals was jointly established by port management companies Mwani and Milaha Qatar; it provides containers, general cargo, livestock and offshore supply services – all handled through Hamad, Qatar’s largest commercial port, which is worth more than $7 billion.

The company reportedly handled 1.3 million TEU (twenty foot equivalent unit) of container cargo in 2019, 300,000 times more than what all of the Ukrainian ports combined handled in the same year.

The news follows the recent public-private partnership project, which included the property of Ukrainian sea port authority USPA, aimed at modernizing Ukraine’s economic policy and attracting investors to state-owned facilities.

Another Ukrainian port – in Kherson – also made recent news: port management company Risoil Kherson won the concession competition on Jan. 20. The company reportedly offered a 10-times-larger concession payment than the minimum tender rate, $12.2 million.

After delivering the exciting news about QTerminals, Kryklii added “now I’m your investment nanny,” referencing President Volodymyr Zelensky’s earlier usage of the term during the World Economic Forum in Davos, Switzerland on Jan. 22. He said that Ukraine will institute an “investment nanny” to look after big investors of $100 million or more yearly.

Kryklii concluded his Facebook post by explaining that, the following week, “winners of the Risoil-Kherson and QTerminals concession contests will talk about the development plans for the Kherson and Olvia ports, and the Ministry of Infrastructure plans for the concession of other facilities.”

In Kryklii’s view, hopes remain high as the good news follows reports that Ukraine’s economy has grown for 15 consecutive quarters and that the hryvnia, the Ukrainian national currency, was the fastest-appreciating currency last year.

(C)KIYV POST 2020

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