International Business Project INDUSTRIAL PARK  «OVIDIY CITY»

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Project Background

Ukraine has largest among of sea ports with a variety of different functional terminals of the Azov-Black Sea basin countries. Convenient waters and coastal areas dispose to the construction of new high-technology port terminals. At the same time, the current state of Ukrainian ports is lamentable.

Today ports of Ukraine correspond to the standards of 60-70s of the 20th century. Ports are not targeted to receive vessels of large tonnage, but worldwide operators operate exactly such vessels. Among 18 ports that operate today in Ukraine, neither is able to handle vessels type of capesize - with deadweight of over 100 thousand tons and a draft of more than 15 meters. They can’t do it because of the depth near the piers and approach channels. The most important of the seaports of Ukraine - Odessa, Illichivsk and Yugniy (Southern) ports - take in the vessels with a draft of up to 14.5 m, while the others are able to accommodate vessels with a much smaller draft. However, the future of shipping belongs to the large-capacity vessels, as they are most effective, not only economically, but also from an environmental perspective.

According to port capacities, Ukraine currently holds only the 3rd position in the Black Sea basin, following Russia and Romania in spite of the fact that Romania's coastline is only 225 km long and Ukraine's coastline is 2,782 km, Ukraine has the largest number of sea ports of the Azov-Black Sea basin (18) with 63 terminals with different functionality (container, grain, gas, oil, coal, cement, ore, terminals for handling fertilizers, metals, timber, oil, ammonia and urea, etc.) accounting for 35% of the total turnover of the basin.

Ukraine occupies a leading position in Europe by its rate of transit (coefficient - 3.75). Nevertheless Ukraine doesn’t use its potential sufficiently. If in 2002 the part of transit was 40.4%, then after that it did not exceed 38.73% for 9 years. Ukraine loses its potential also because of the development of powerful neighbors, including the Russian ports, which took over those traffic flows that traditionally went through the ports of Odessa and Mariupol.

Due to active investment in the development of ports and port infrastructure, as well as construction of new terminals in Romania, Russia and the Baltic countries, from 2007 to 2011 the volume of transit from Belarus, Kazakhstan and Russia via Ukrainian ports fell from 69.16 million tons per year to 47.6 million tons. At the same time the freight from Russia reduced the most, from 52.27 million tons to 28.64 million tons.

Handling equipment of ports is universal (port cranes), has an extreme degree of wear (60-90%) and does not meet modern requirements for dimensions/load capacity and productivity.

The state has no strategic objectives or other reasons due to which the property of ports should be preserved in its ownership and carry out  freight operation by state-owned enterprises. Accordingly, taking into account financial and production incapacity of the state, no major renovation can be discussed.

Container transportation is one of the most dynamic segments of cargo transportation around the world. The part of global container transportation of pre-crisis period was approximately 60% of the total volume of transportation. Ocean-going vessels with a 4-5.5 thousand TEU on board almost daily are under treatment in Ilyichevsk and Odessa ports. However nowadays containers with a capacity of 10 to 12 thousand TEU and more are being constructed worldwide. Existing Ukrainian ports are not designed for that.

In general the ports are not sufficiently provided with a capacity of the railway. The main factors limiting the capacity of ports and greatly reducing the efficiency of their activities remain underdeveloped land transport entrances to the port terminals from the main railway and, even more, highways. What is compounding the situation is that the measures cannot be taken. The ports were built in those days when the cities didn’t surround them, but now the ports have turned out to be up tight by the cities, and it is impossible to develop the existing ports. For the same reason today it is impossible to provide the necessary and continuous supply of wagons, as well as to solve the problem of lack of necessary logistics centers.

Taking into account a complete disappearance of some cargos and the emergence of fundamentally new traffic, it should be mentioned that reconstruction and development of Ukrainian ports in accordance with the needs of the global market is required. Resolution of this issue requires a deliberate and effective policy.

The last decade there is a trend of growth of trade turnover and transit through the private sea port transshipment facilities. Back in 2006, their part in total cargo handling exceeded 22%. Private enterprises are able to adapt to the market more quickly and have greater freedom of action. However, being in the zone and under the care of public ports, it is impossible to avoid the risk of ill-considered actions of port management.

The above mentioned background makes a project on the creation and development of the INTERNATIONAL PRIVATE MULTIFUNCTIONAL SEA HUB PORT relevant and profitable investment for investors who wishes to own multifunctional transshipment HUB terminals, break-bulk HUB terminals (iron ore fines or concentrate, construction materials, etc.), dry bulk HUB terminals (coal, finished steel or its ingredients, grain, salt, sugar, etc.), liquid bulk HUB terminals (crude oil, gasoline and miscellaneous chemicals, etc.), metal cargo HUB terminals, bulked cargo (vegetable, tropical oils and fats, beverage, etc.), temperature-controlled cargo (frozen fruits and vegetables, meat, fish, etc.), container HUB terminals, storageterminals, general cargo HUB terminals, industrial  HUB terminals, logistics  HUB terminals, coal terminal, grain HUB terminal, fertilizer HUB terminal, mineral ore HUB terminal, eco-friendly HUB terminal, iron-ore HUB terminal, wood  HUB terminal, food HUB terminal and other HUB terminals.

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