World Bank recommends Ukraine overhaul port model

Odessa, Ukraine - June 28 2018: Odessa's port is Ukraine's busiest. The harbour remains accessible all year round and serves as a vital import/export channel for the Ukrainian economy.

The World Bank has urged Ukraine to move toward the ‘landlord model’ of port management in a report that looks at improving the country’s maritime industry.

In its ‘Strengthening Ukraine’s Port Sector Governance’ report, the World Bank has said the current situation in Ukraine does not fit any of the four classic models for port governance.

By using the example of Pivdennyi port, the World Bank identified “a fragmented land ownership and land use in sea ports”.

It meant specifically that governance of the port was divided between local authorities, regional state administrations and private entities.

This was instead of one of the traditional models of port governance, such as the public service, landlord, corporatized and private sector.

The majority of ports around the world are run on the landlord model, which is where the port authority owns the land and leases terminals to operators in the form of concessions.

“In order to attract new investments and implement large-scale port infrastructure development projects,” the World Bank said, “it is necessary to streamline land relations in ports.”

To that end, the report has recommended Ukraine pursue the landlord model in order to maximise its trade potential.

The country is the world’s second-largest exporter of coarse grains and the fifth largest exporter of wheat. This abundance of commodities make it a key partner for the EU, North Africa and, increasingly, East Asia.

Its grain exports have increased substantially over the past 10-15 years and its market reach has diversified remarkably. Its container traffic has also grown, all of which has led the World Bank to describe Ukraine as a “maritime nation of systemic importance to the rest of the world”.

The report was commissioned by Ukraine’s Minister of Infrastructure and the Ukraine Sea Ports Authority (USPA). To read it in full, follow this link.

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