The discussion was held on the proposals received from businesses as part of the work of the Sectoral Working Group on Transport and Logistics, established under the Ministry of Economy of Ukraine organized by the Kyiv School of Economics and moderated by EY Ukraine as part of the work on the Ukraine Facility Plan. More than 150 participants joined the group, which introduced 85 proposals for policy changes, with 43 of them submitted to the Government for potential implementation.
Creation of the sectoral working groups is one of the activities under the Good Governance Fund Project “Economic Hub: Sound PFM Policies and Vision for Growth,” which is supported by the UK government (UK Aid). The project delivery partners are Abt Britain and Kyiv School of Economics.
The proposed policies were mainly in the areas of maritime and inland waterway transport (34), railways (21), and roads (15). The proposals also covered public (3), intermodal (4), and aviation (2) transportation, postal services (2), and the general operation of the transport sector (4).
The majority of the proposals received were related to operational improvements (30) and the improvement of the investment climate (26). There were also proposals on the implementation of EU legislation (10), simplification of administrative procedures (6), consideration of global trends in transport and logistics (6), increase in capacity (4), and national infrastructure projects (3).
Some of the proposals received have already been included in the Plan, such as the development of multimodal transportation, border infrastructure, port infrastructure, integration with the TEN-T, and the restoration and modernization of urban transport, etc.
“Our main economic challenge today is to maintain macro-financial stability, and this is where most of the Ukraine Facility funds will be directed – 39 out of 50 billion euros over 4 years. At the same time, through reforms and regulatory changes, we aim to create conditions for business development and further economic growth,” said Deputy Minister of Economy of Ukraine Oleksii Sobolev.
He also added the opportunity for investors to receive financing through the EBRD, EIB, and other international financial institutions will be an additional driver for development. For this purpose, the Plan provides for a special investment instrument to cover risks in priority sectors worth EUR 8 billion, which should stimulate the attraction of more than EUR 30 billion to the Ukrainian economy.
Businesses submitted 87 proposals for potential investment areas with a total budget of over $2.9 billion. Most opportunities were submitted in the areas of air transport, namely 39 projects worth more than $1.1 billion, maritime and military transport – 21 projects worth $836 million, and rail transport – 15 projects worth $460 million.
“The development of the transport and logistics sector is key to increasing exports and domestic trade. The results of the sectoral group’s work show that business is ready to respond quickly to challenges – to change and build new logistics routes, restore destroyed infrastructure, and implement investment projects. The submitted proposals should facilitate this process. After six expert discussions, 43 policy proposals were submitted to the Government for possible implementation,” said Maksym Fedoseienko, Head of Strategic Projects at KSE Institute.
While the format of the Ukraine Facility Plan does not foresee investment projects, their analysis is important for identifying priority sub-sectors for development. The relevant proposals will be submitted to the Ministry of Territorial, Community, and Infrastructure Development of Ukraine for consideration and may be included in the long-term sectoral development strategy.