Sea ports industry of Ukraine may experience revival under to the new law approved by the parliament of Ukraine on May 17, 2012. If signed by the President, the Law on the Sea Ports of Ukraine will come into force in one year upon its publication.

The Law introduces a number of benefits to the sea ports industry. In particular, pursuant to the Law, private investors may participate in privatization of sea ports infrastructure through assets or equity deals on the basis of public auction. Investors may also lease state-owned berths and the underlying land for up to 49 years simultaneously with the privatization. At the same time, strategic infrastructure objects, like existing navigation and waterside structures of public use, seaway hydrodgraphic facilities etc., are not subject to privatization, lease or concession.

In addition, the Law guarantees private ownership rights for berths constructed at the expense of private investment prior to and after its coming into effect. State-owned berths, unlike strategic infrastructure objects, may be subject to lease and concession for up to 49 years.

Public-private partnership in this field is also promoted. Investors may operate sea ports infrastructure on the basis of concession, joint venture, lease or other investment contracts with state bodies. Such contracts shall be executed pursuant to the applicable Ukrainian law on public-private partnership. Importantly, the Law also sets forth the mechanism whereby private investors may participate in financing, construction and refurbishment of state-owned infrastructure for compensation from state bodies derived, for instance, from harbour dues.  

Should you have any questions in connection with the subject matter of this letter or require any additional information, please do not hesitate to contact Mr. Oleh Malskyy, Partner and Head of M&A, Corporate and Antitrust Department, at malskyy@astapovlawyers.com or Mr. Bohdan Dmukhovskyy, Associate of the M&A, Corporate and Antitrust Department, atdmukhovskyy@astapovlawyers.com or at tel. +38 044 490 70 01

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