Invest in Ukraine: Transport Infrastructure

Transport infrastructure of Ukraine
The Road Ahead

Yuliya Kovaliv
Head of the Office
of the National Investment Council
of Ukraine
Infrastructure is a driver of the Ukrainian economy, allowing Ukraine to make the most of its economic
opportunities. Infrastructure serves industry and citizens in making our country a strategic link westward to
Europe, East to Asia and South to Africa and the World. Moving our freights and people swiftly, securely and
safely to their destinations without delays is vital to economic growth of the country.
Ukraine is living in an exciting and dynamic environment; this environment is the result of a variety of
challenging forces, from globalisation of world trade to the transfer of ideas, products and services at electronic
speeds. The transport system needs to establish again its role as a growth engine, provide for the freedom of
movement and remove obstacles of imperfect legislation, outdated technologies and transport dependency.
The National Investment Council was established by the President of Ukraine to set a public-private dialog
with key business leader on investment promotion, boosting FDI and tackling key obstacles of Ukrainian
regulatory environment.
The Ofﬁce of the National Investment Council provides analytical coverage of the key sectors of Ukrainian
economy, highlighting sectors potential for investments, key regulation and issues related to investment in
these sectors.
We are focusing on practical steps needed to address investors’ needs and concerns enhancing public private
dialogue and promoting actions to strengthen the business climate in the country.
Our goal is to maintain a dialogue between foreign institutional and private investors, IFIs and government
to promote Ukraine as an investment destination and to facilitate of development and implementation of
legislation to improve business climate and increase FDIs.
2018 | National Investment Council | Transport infrastructure of Ukraine 1

Introduction
SECTION 1 – Transport Infrastructure overview
1.1. Ukraine on the map of global logistic routs
1.2. Key transport capacities
1.3. Ukraine in international ratings
SECTION 2 – Railway
2.1. Railway at a glance
2.2. Railway infrastructures
2.3. Rail fleet capacity
2.4. Rail cargo turnover
2.5. Railway passenger transportation
SECTION 3 – Road
3.1. Roads network of Ukraine
3.2. Roads characteristics
3.3. Financing for road infrastructure
3.4. Key investment projects in road infrastructure till 2022
SECTION 4 – Sea Ports
4.1. Sea ports overview
4.2. Port operators
4.3. Sea ports cargo flow
4.4. Sea ports duties
SECTION 5 – River infrastructure
5.1. River navigable capacity
5.2. River cargo transshipments
SECTION 6 – Air transport
5.1. Airports infrastructure
5.2. Overview of state-owned airports
5.3. Air transportation
SECTION 7 – Forthcoming infrastructure reforms
1
3
5
7
8
11
13
15
16
21
23
25
27
30
32
35
37
39
42
47
49
53
54
57
59
60
62
64
67
Contents
2

2018 | National Investment Council | Transport infrastructure of Ukraine
Transport
infrastructure
of Ukraine
3

Volodymyr Omelyan
the Minister
of Infrastructure of Ukraine
Transport infrastructure unites Ukraine and connect country with the whole world. Infrastructure is one of
the basic branches of the national economy, from the effective functioning of which depends the ensuring of
the investment attractiveness and defense of Ukraine, protection of economic interests, improvement of the
quality of people’s life and place of Ukraine in the global transport and logistics system.
With each following year, the transport infrastructure industry of Ukraine becomes more dynamic, developed
and transparent. It is the backbone of the growth of the Ukrainian economy and the most attractive area for
investments.
The National Transport Strategy of Ukraine 2030 «Drive Ukraine 2030» provides $ 60 billion of state and private
investments on the implementation of large-scale innovation projects that will create a new infrastructure
reality, high quality transport services and bring significant profits to market players.
The conceptual approach of our work with investors – it is the proposal of an attractive project for investments
with a clearly predictable result. Any investor has the opportunity to see the prospect in Ukraine and know
what he will get from the invested funds.
With this purpose, the Ministry of Infrastructure of Ukraine develops an effective interaction between the state
and business, implements managerial and technological innovations, new business models. Each investor of
transport industry has the opportunity to see his prospects, invest and get a return.
The infrastructure sector of Ukraine is open for strategic investors, public and private companies that want to
work in Ukraine and together with us develop one of the most prospective transport markets in Central and
Eastern Europe and the largest logistics hub in the Europe-Asia interconnection.
2018 | National Investment Council | Transport infrastructure of Ukraine4

1.1. Ukraine on the map of global
logistic routs
Ukraine strategic location provides opportunities
for transportation infrastructure development
Advantageous geographical location makes Ukraine an important transportation hub connecting Europe,
Asia and the Middle East. A number of international transport corridors over 5,000 km long in total run
through Ukraine.
Ukraine shares borders with Belarus, Russia, Poland, Slovakia, Hungary and Romania. It also has a direct
connection with Black Sea countries Georgia and Turkey. Pan-European transport corridors (Cretan 7 and
Cretan 9) link Ukrainian ports in Odesa Oblast with Germany (Cretan 7) and connect Russia and Finland,
Estonia, Latvia and Lithuania with Greece (Cretan 9). Baltic Sea – Black Sea Transport Corridor offers a
direct connection across the continent between the port cities of Gdansk in Poland and Odesa Oblast
ports Chornomorsk and Yuzhniy in Ukraine. Black Sea Transport Circle connects all the Black Sea Region
Countries by the land. TRACECA Corridor or Trans-Caspian Corridor connects Ukraine with one of six trade
routes of the Chinese “One Road One Belt” economic initiative, also dubbed the New Silk Route.
Helsinki
Odessa
St. Peterburg
Moscow
Tallinn
Riga
VilniusKlaipeda
Minsk
Gomel
Gdansk
Warsaw
Kovel
Kyiv
Donetsk
Rostov-on-Don
Pivdenny
Odesa
Chornomorsk
ReniBucharest
Frankfurt
Alexandroupolis
Dimitrovgrad
Istambul
Ankara
Batumi
Poti
Tbilisi
Yerevan
Baku
Turkmenbashi
Aktau
Cretan #7
Cretan #9
Baltic Sea - Black Sea
Black Sea Transport Circle
Corridor TRACECA
Source: Ministry of infrastucture of Ukraine

6 2018 | National Investment Council | Transport infrastructure of Ukraine
The transport sector significantly contributes to Ukrainian economy. Its dynamics heavily depends on the
performance of national economy. The transport sector of Ukraine accounts for 6.4% of the country’s GDP
and 7% of total employment. GDP generated by transport in 2017 increased by 16.5% to USD 7.2 bn.
1.1. Ukraine on the map of global
logistic routs
14,1%
12,4%
10,2%
6,4%
6,1%
28,8%
2,9%
3,7%
4,3%
5,3%
5,7%
Wholesale and retail trade
Processing industry
Agriculture
Transportation,
warehousing and post
Mining industry
Real estate deals
State management
& defence
Education
Telecom
Electricity & gaz supply
Other
Source: Ukrstat
to include the Total (in the center) GDP = USD 112 bn.
And highlight infrastructure share]
The cargo turnover of carrier operators of Ukraine -the product of a certain quantity of cargo and the
distance of the transport - has increased on all types of cargo transportation, indicating the revival of the
economy and the active use of logistical capabilities of the country. In 2017, freight turnover increased by
5.8% up to 343057.1 million ton-km.
In absolute terms, the total volume of freight carried in 2017 amounted to 635.9 million tons, which is
by 1.8% more than in 2016. The largest growth was recorded in the segment of pipeline and aviation
transportation.
Total GDP =
USD 112 bn.
Source: Ukrstat

Ukraine has the most extensive railroad networks in Europe handling a substantial part of passenger and
freight traffic. Country’s road network is no less extensive, it covers all the territory and make possible
deliveries to any point of destination. The upcoming reconstruction of river waterway will help river
transport become worthy alternative to its rail and road counterparts.
Feight transportation dynamics by modes of transport, mln, t
Source: Ukrstat,* 2017 results
Source: Center for Transport Strategies
636million
tons
170000km
of roadways
13
sea ports along
mainland
Ukraine
4 647million
people
km
of railways
20 900
20passenger
airports
Cargo turnover*
Passengers
turnover*

-8* +5139 025 -13107 +699
7,0
5,6
4,2
2,8
1,4
6,6 6,6 6,5 6,7
6,6 6,1 6,7 6,8
6,5 6,0 6,3 6,5
6,3 6,1 5,6 6,8 6,4
6,1 5,9 6,7 5,3 5,5
6,1 5,9 6,0 5,8 6,0
6,0 5,9 5,7 5,7 5,9
6,0 6,2 5,9 5,2 5,8
5,8 5,7 4,9 5,6 6,1
5,7 5,6 5,6 5,3 5,4
2,3 2,5 1,8 3,1 3,0
2,3 2,6 1,6 2,6 2,7
2,2 2,3 2,4 2,4 2,4
2,2 2,4 2,5 2,8
2,2 2,5 2,6 2,3
2,2 2,4 1,8 2,6 2,5
2,1 1,9 2,9 2,5
2,1 2,1 2,6 2,4
2,0 1,9 2,2 2,2
2,0 2,6 1,8 2,3
3,2 2,2 4,3 3,3 3,8 5,4
1
2
3
4
5
6
7
8
9
10
88
88
135
136
137
138
139
140
141
142
143
144
6,6
Rank of Ukraine in the quality of transport infrastructure rating in 2014-2015
Scoring of transport
infrastructure in 2014-2015
1.3. Ukraine
in international ratings

4,23 4,12 4,44 3,86 4,28 4,27 4,45
1,6 1,111,241,361,39 2,1 2,4
1,72 1,7 1,47 1,81 1,68 1,56 2,02
1,75 1,29 1,57 1,86 1,85 1,51 2,35
1,87 2,14 1,54 2 1,74 1,54 2,14
1,88 1,88 1,5 1,89 1,75 1,89 2,32
2,03 1,91 2,07 2,31 1,85 1,74 2,23
2,03 1,91 1,96 1,84 2,16 1,92 2,35
2,06 1,93 2,13 2,12 2,12 2,04 2,04
2,07 1,85 1,76 2,18 2,1 1,76 2,68
2,08 2 2,21 2,08 2,13 1,95 2,13
2,74 2,3 2,49 2,59 2,55 2,96 3,51
3,99 3,75 4,15 3,65 4,01 4,2 4,25
4,07 3,94 4,1 4,05 4 4,03 4,29
4,07 3,98 4,21 3,77 4,05 4,13 4,33
4,1 3,79 4,08 3,85 4,18 4,36 4,37
4,11 3,83 4,05 4,05 4,07 4,22 4,43
4,14 4,18 4,2 3,96 4,09 4,05 4,4
4,19 4,12 4,29 3,94 4,22 4,17 4,41
4,2 3,92 4,27 4 4,25 4,38 4,45
4,22 3,9 4,24 4,24 4,01 4,12 4,8
Infrastructure
Logistics
Timeless
Tracking
andtracing
International
transfers
Top
10 countries
Bottom
10 countries
Ukraine
4,8
3,2
2,4
1,6
0,8
4
Overallscore
Customs
Rank in the rating Logistics
Overall Score* Compared to 2015
Tracing and tracing
Customs
Timeless
Infrastructure International transfers
1
2
3
4
5
6
7
8
9
10
80
151
152
153
154
155
156
157
158
159
160
88
Luxemburg
Germany
Sweden
Netherlands
Singapore
Belgium
Austria
England
Hong Kong, China
USA
Ukraine
Zimbabwe
Laos
Tajikistan
Lesotho
Sierra Leone
Equatorial Guinea
Mauritania
Somalia
Haiti
Syria
-19* -47116 -1384 -2895 -2395 -1061 -254
Rank of Ukraine in the international LPI rating in 2016
International LPI rating in 2016

-8* +5139 025 -13107 +699
7,0
5,6
4,2
2,8
1,4
6,6 6,6 6,5 6,7
6,6 6,1 6,7 6,8
6,5 6,0 6,3 6,5
6,3 6,1 5,6 6,8 6,4
6,1 5,9 6,7 5,3 5,5
6,1 5,9 6,0 5,8 6,0
6,0 5,9 5,7 5,7 5,9
6,0 6,2 5,9 5,2 5,8
5,8 5,7 4,9 5,6 6,1
5,7 5,6 5,6 5,3 5,4
2,3 2,5 1,8 3,1 3,0
2,3 2,6 1,6 2,6 2,7
2,2 2,3 2,4 2,4 2,4
2,2 2,4 2,5 2,8
2,2 2,5 2,6 2,3
2,2 2,4 1,8 2,6 2,5
2,1 1,9 2,9 2,5
2,1 2,1 2,6 2,4
2,0 1,9 2,2 2,2
2,0 2,6 1,8 2,3
3,2 2,2 4,3 3,3 3,8 5,4
1
2
3
4
5
6
7
8
9
10
88
88
135
136
137
138
139
140
141
142
143
144
6,6
Rank of Ukraine in the quality of transport infrastructure rating in 2014-2015
Scoring of transport
infrastructure in 2014-2015
1.3. Ukraine
in international ratings

Railway
11

Yevgen Kravtsov
PJSC “Ukrzaliznytsia”
Acting Chairman
Public joint stock company “Ukrainian railway” (UZ) is the major engine for the country that supports economic
growth and social mobility. As a principal employer and significant value generator our company represents
one of the most important assets of Ukraine.
Opportunities for the development created by the lack of investments that company has been experiencing
for the last 20 years are challenging, yet rewarding. In the next 5 years the company requires at least USD 5
billion of investments in the core business: railway infrastructure, traction and wagons.
Investments in railway are well sustained by the high demand on services of UZ. While still being the single
railway carrier in Ukraine, introduction of the market principles and client-oriented approach in deregulated
fields are guaranteeing the stable income.
Recent introduction of the modern corporate governance principles ensures the transparency, reliability and
prosperity of the company. We strive to open new opportunities for the partnership and introduce new
services.
Our intention is to make the Ukrainian railway not only one of the largest railways on the continent, but also
to develop best practices to become the leader on the transportation market.

Ukraine’s railway is a backbone of Ukrainian transport system with fundamental service for Ukrainian
economy. With almost 21 k km of rail tracks, Ukraine ranks 2nd in the CIS and 6th in Europe (excl. Russia). By
traffic volumes, Ukraine’s railway is #4 in Europe and Asia behind only China, Russia and India. The workload
of Ukrainian railways is 3-5 times bigger than that of other European countries.
2.1. Railway at a glance
Ukrainian railway today
Characteristics of the tracks with 1520 gauge space
Source: Center for Transport Strategies, Ukrstat
20 900 km
operational lengh
of the railways1
4 000locomotives
168 100
freight wagons
3
international transport railway corridors
pass the territory of Ukraine
>75%
raw material goods share
in UZ flows
share of railway transportation in
cargo turnover of Ukraine2
, which is
the highest value among European
countries
58%
freight transportation volume
340 mln t
1
Excluding Crimea and ATO territory
2
Including pipe
The country ranks 2nd in the CIS and 4th in Europe in terms of passenger transportation. Some 47.3%
of the railway operational network is electrified, compared to 51% in Russia, 47% in China, 29% in India
and 18% in Belarus. Track width is 1520 mm.
51%
85,2
Russia Ukraine Kazakhstan Belarus Uzbekistan Azerbaijan Estonia
Lithuania Georgia Turkmenistan Latvia Moldova Tajikistan
47%
20,9
27%
15,3
18%
5,49
17%
3,64
60%
2,07
11%
1,20
6%
2,18
98%
1,15
0%
2,98
11%
2,16
0%
1,17
0%
0,68
share of electrified track
total length of tracks,
thnd km
share of electrified track
total length of tracks,
thnd km

2.2. Railway infrastructure
Ukrainian railway network characteristics
Source: https://www.ukrinform.ua, Ukrzaliznytsia
Total number of major
railway stations, including:
12
First class
station
16
Second class
station
58
Third class
station
19
Out-of-class
125
1 400
Number of railway
stations
4 200
Rail crossings
/1 276 – rail crossing with security/
2 268
Rail transport stops
and platforms
Ukrainian railway has the highest density in Donetsk, Dnipropetrovsk, Lviv and Kharkiv regions. As per
2017 results, the busiest internal rail routes are :
Kyiv – Korosten – Novograd-Volynskyy – Shepetivka – Zdolbuniv – Lviv
Kovel – Sarny – Korosten – Kyiv
Kyiv – Fastiv – Kozyatyn – Zdolbuniv – Lviv
Kozyatyn – Zhmerynka – Odesa
Kyiv – Konotop – Shostka
Kyiv – Poltava – Kharkiv
Fastiv – Bila Tserkva – Smila – Dnipro
Kruvyi Rig – Dnipro – Zaporizhzhya
Kharkiv – Dnipro – Zaporizhzhya – Melitopol – Novooleksiyivka
Lviv – Mukacheve - Chop

The entire rail network is operated by state-run Public Joint Stock Company “Ukrainian Railway”
(Ukrzaliznytsia). The company was established according to the Decree of the Cabinet of Ministers of
Ukraine dated June 25th, 2014 #200. The company has been established on the basis of merging State
Administration of rail transport, enterprises and institutions of public rail transport. The company is run
by the Cabinet of Ministers of Ukraine.
The railways of are split into six territorial railway companies: Donetsk, Lviv, Odesa, Southern, South-
Western and Near-Dnipro. The subdivision is purely administrative as it doesn’t correspond to the
particular railway lines or branches. The names of regional railways are purely historic, inherited from
the Russian and Austro-Hungarian Empires. For instance, the South-Western Railway actually operates
the north-central part of Ukraine’s rail network. The Southern Railway actually operates in the east of the
country, whilst the Near-Dnipro Railways are the southernmost.
2.2. Railway infrastructure
The territory of Ukraine is crossed over by three Rail Transport Corridors № 3, № 5 and № 9. Pan-
European Transit Corridor № 7 following the Danube River is linked to Ukraine through the Ukrainian
ports of Izmail and Reni. At present, the length of national rail transit corridors of Ukraine is 3 162 km.
Moreover, transport along with the international transit TRACECA (Transport Corridor Europe-Caucasus-
Asia) corridor continues to be developed.
To satisfy growing export to the EU and improve the Pan-European Corridor №5, that runs from Venice
and Trieste (Italy) via Ljubljana (Slovenia) and Budapest (Hungary) to Lviv (Ukraine), almost a decade
ago the reconstruction of the Beskyd railway tunnel has been started. This largest infrastructure facility
of Ukrainian railway in recent years will be put into operation in mid 2018. Once completed, the 1 882
meter-long double-track tunnel is set to replace the old single-track one, and will almost quadruple
capacity from the current 12 trains per day to 46 trains. The new facility is expected to handle 60% of
transit freight from Ukraine to Central Europe. The construction project is jointly funded by the European
Bank for Reconstruction and Development, European Investment Bank and Ukrzaliznytsia.
Odessa
Lviv
South Western
Southem
Odesa
Near-Dnipro
Donetsk
Uzhgorod
Chernivtsi
Ivano-Frankivsk
Ternopil
Lviv
Lutsk
Rivne
Zhytomyr
Khmelnytskyi
Vinnytsia
Kyiv
Chernigiv
Cherkasy
Sumy
Kharkiv
Poltava
Kropyvnytskyi
Mykolayv
Kherson
SimferopolSevastopol
Dnipro
Zaporizhzhia
Luthansk
Donetsk
Source: Wikipedia

Overall, private companies account for approximately 40% of the total freight car fleet (with about 60% in
tank-car segment, 50% for gondolas, and 26% for grain hoppers). The rest of the fleet is managed by state
owned monopolist Ukrzaliznytsia.
Railcar fleet and share of inventory
Coal
Construction
material
Grain
Ferrous metals
Oil and products
Ore
Chemicals and
fertilizers
Coke
Gandola Tank-car Grain
hopper
Covered Cement
wagon
Platform Hot pellet
hopper
Container
platform
Other
wagon1
86,5
20,2 15,8
6,85 6,56 5,49 4,99 4,03
17,7
168 000 wagons2
in total
Amount of
wagons,
thnd units
1
Mineral wagons, dumping cars, refrigerators, hopper wagons, others.
2
As of May 2017
Ukraine operates a large railcar fleet totaling almost 168 000 freight and 4 463 passenger cars (3 160
passenger cars are currently operating), powered by over 4 040 locomotives (57% diesel and 43% electric).
The share of the second group (grain hoppers, cement wagons, container platforms) has been growing
over the last few years. Being equipped with special cargo handling mechanisms, these wagons provide the
possibility for tailored-made approach and time saving with loading/unloading procedures.

TOP-10 owners of railcars by type of wagon
Darnitsia WRP
Panyutin WRP
Ukrzaliznytsia
Stryiskyi WRP
Lemtrans
Ivest Wagon Company
Ferrexpo
EBRD
Metinvest-Shipping
Transgarant Ukraine
Other
Total
Gondola
46 066 40 400
21 817
19 810
3 878
761
13 066
2 691
2 252
1 741
1705
1 686
17 259
86 494
Ukrzaliznytsia
Stryiskyi WRP
Ukrspectransgaz
Severodonetsk Azov Assosiation
Ukrros-trans
AZOT
Concern Stirol
Dniproazot
F.M.C Group
Eurasia Trans Service
Other
Total
Tank-car
9 034 11 125
7 870
1 154
1 795
907
634
579
393
384
313
106
5 814
20 159
Refrigerator Wagon Company
Ukrzaliznytsia
RPE “Zaria”
Ukrros-trans
Raiffeisen Leasing Aval
Rail Investment
Transforvarding Limited AG
Concern Stirol
Trans Center
Other
Total
Covered wagon
6 193 653
5 612
581
78
65
60
57
54
49
45
40
205
6 846
Ukrzaliznytsia
Stryiskyi WRP
Asovstal ISW
KSW
Donpromtrans
RTK-Ukraine
Donetsksteel-MP
Interpipe NIKO TUBE
Royal Invest
Royal Invest
Other
Total
Platform
5 188 306
4 608
580
199
24
22
20
15
13
4
3
6
5 494
Ukrzaliznytsia
Stryiskyi WRP
RTK-Ukraine
MTK
Ukrtransleasing
Cargis
TH Zapadnyi
Isteytglobal
Promvagontrans
KRCBW*
Other
Total
Grain hopper
11 694 4 152
10 704
945
1 466
650
497
300
297
200
200
85
457
15 801
Ukrzaliznytsia
Stryiskyi WRP
Ukrspectransgaz
Ukrros-trans
AZOT
Concern Stirol
Dniproazot
F.M.C Group
Eurasia Trans Service
Other
Total
Hot pellet hopper
2 773 2 221
2 773
0
1 039
453
193
187
94
60
47
33
115
4 994
Stryiskyi WRP
Ukrzaliznytsia
NGZ
Kovalska
Ivano-Frankivskcement
Podilsky Cement
Heideberg Cement Ukraine
Rail Investment
Dyckerhoff (Ukraine)
Techinvestpostach
Other
Total
Cement wagon
4 672 1 891
4 043
629
629
360
158
143
122
121
100
50
210
6 563
Liski
Ukrzaliznytsia
Refrigerator Wagon Company
Stryiskyi WRP
Transcontainer Ukraine
Ukrtransleasing
Dniprovagonmash
Laude
Rivneazot
Adex
Other
Total, units
Container platform
3 979 50
2 400
810
163
26
30
10
5
2
1
1
1
4 029
Other, units
13 600
17 700
4 100
Ukrzaliznytsia and public wagon
companies
Private wagon companies

The current railway system suffers from aging locomotives and rolling stock as well as a badly depreciated
infrastructure that causes traffic bottlenecks at crucial locations. The average degree of depreciation of
freight cars is almost 90%, passenger cars – 92%. 100% of locomotives and 56% of passenger cars have an
average age more than 40 years.
Standard operational time of the main locomotives, exclusively operated by Ukrzaliznytsia in Ukraine,
stands at 30 years, while 75% of the current fleet is 30+ years old. Urgent renovation and/or modernization
of the fleet needed.
Age structure of railcar fleet in Ukraine
Diesel
locomotives
Electric
locomotives
Steam
locomotive
Cargo
fleet
Passenger
fleet
2,2 26,3 63,85,6
3,6 5,2 34,1 53
100
4,1
18,3 66 15,4
2,2
3,6 12,7 18,7* 60,5**4,5
Up to 8 years 9-15 years 16-25 years 26-40 years Over 40 years
* 26-28 years
** >28 yearsSource: Ukrzaliznytsia
<8 years
Diesel locomotives
2 291 units
Electric locomotives
1 749 units
Diesel locomotives
2 291 units
Electric locomotives
1 749 units
9-15 16-25 26-40 >40 years
1 747
2 542 2 539
1 819 1 861
2 280
2 297
2 294
2 291
917
33
264
623
796070
1 770
1 751 1 749
1 749
4040locomotives
in totalin total
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Age structure of locomotives Traction fleet dynamic, units
Average operational indicators
Average daily capacity of a locomotive
Average weight of freight train
Average trainset railways cars (general)
Average daily travel of an operated locomotive
Average sector-speed of trains
1,379
3,4
55,1
187
94
min t • km, brutto
thnd t, brutto
km
km Source: Center for Transport Strategies

In order to guarantee growing export volumes from Ukraine and sustainable economical development
goals, total need for investments in locomotives is estimated to reach around UAH 270 bn in the coming
25 years. Large-scale capital expenditures program is on the way already within Ukrzaliznytsia in 2018.
70% of all the funds (almost UAH 18 bn) will to be directed to rail fleet modernization and/or renovation.
Already this fall, new GE locomotives are planned to be delivered to Ukraine for final assembly by the
end of the year. 15-years framework agreement between GE Transportation and Ukrzaliznytsia, which is
valued at over $1 billion, anticipates the production of up to 225 new diesel locomotives and upgrades to
75 older models with a significant degree of (up to 40%) localization in Ukraine. First 30 new locomotives
arriving in 2018, will be TE33A units, each with a GE Evolution series engine that has 12 cylinders and 4 500
horsepower. The service contract, which will cover the 40-year life of the new locomotives, will also use
local facilities.
Performance indicators of freight locomotives: breakdown by territorial units
Lviv
1 030 853
3 061
1 810
52,5
443,3
33,0
Southern
1 682 788
3 623
2 2170
57,2
544,3
41,5
Donetsk
682 050
3 206
2 205
49,6
275,0
27,6
Near-Dnipro
1 286 282
3 512
2 211
54,6
478,4
37,0
Southwestern
2 026 727
3 536
2 129
57,8
604,0
46,6
Odesa
1 680 326
3 375
2 074
55,7
540,5
39,9
Average daily capacity of a
locomotive, tkm brutto (excluding
weight of a locomotive
Average weight brutto of freight
train, t
Average weight netto of freight
train, t
Average trainset, railway car
(general)
Average daily travel of locomotive
(excluding pushers), km
Average sector speed of trains,
km/h Source: Center for Transport Strategies
After decades of underinvestment, during last two years Ukrainian railway rolling stock modernization
has been demonstrating stable development. In 2017 total wagons output stands at 6 831 units, which is
2.4 times higher of the previous year. The key driver of the growth is Ukrzaliznytsia, that managed to buy
almost third part of all the output, including 2 606 of units, that were produced at the facilities owned by
the state conglomerate.

2721
1020
20172016
Cargo railcars fleet output in Ukraine
68312017
2016
2015
wagons
2811wagons
1054 wagons
Number of cargo railcars, acquired by Ukrzaliznytsy
Number of gondolas, produced by Ukrzaliznytsia factories
370
2606
3147 852 405
3600
2016 2017 2018 E
2 654
65
2
Gandolas
Platforms
Hot pellet hoppers
Panyutinsk factory Darnytsya factory
Stryi
factory
Panyutinsk facility
produced also 2 hot
pellet hoppers

Being an essential component for economical development, transportation on the other hand fully relies
on its dynamics and foreign trade results. After a few years of downturn, provoked mostly by liberalization
of the trade relations with EU countries, and agro export expansion, rail freight market is showing positive
dynamics in 2017: cargo handling totaled 339.6 million tons (0.3% year-on-year).
Dynamics in cargo flow, million tones
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2017
Export
Import
Transit
339,6
160,0
300
350
200
250
150
100
50
43,9
19,6
513,5 498,2 392,2 433,8 471,0 457,3 443,5 386,0 345,5 338,7
Domestic
Total of the year
Domestic
Export
Transit
Import
Rail transport is mainly used to transport bulk cargo. During 12 months 2017 certain bulk cargo categories
showed an increase in transport volumes (oil and oil products, grain and construction materials), others
(coke, chemicals and mineral fertilizers, wood) – decrease.
Dynamics in cargo flow, million tones
27%
20%
16%
8%
5%
5%
3%
2%
14%
20%
22%
18%
6%
4%
11%
2%
4%
14%
Coal
Ferrous metal
Coke
Ore
Oil and products
Chemicals and fertilizers
Construction materials
Grain
Other cargoes
443,6
mln t
Total:
339,6
mln t
Total:
2013 2017
Source: Ukrzaliznytsia

The effectiveness of the transport system and the speed of moving goods do not correspond to current
requirements. The average speed on the roads of Ukraine, including railways, is 2–3 times lower than in
Western countries. As a result, the share of transport costs in production costs are too high. Thus, the
available transit capacity and a favorable geographical position of the country stand only at 70–75% level,
providing a room for further potential development.
mm
ft in
1676 1668 1600 1524 1520 1435 1372 1067 1050 1000 950 914 762 750 610 600
5’6’’ 5’5.67’’ 5’3’’ 5’ 4’11’.8’’ 4’8.5’’ 4’6’’ 3’6’’ 3’5.3’’ 3’3.4’’ 3’1.4’’ 3’ 2’6’’ 2’5.5’’ 2’ 1’11.6’’
Map of railways track guage space
Source: http://businessviews.com.ua
Different railway gauges with EU neighboring countries remain as enduring obstacles for Ukrainian railway
transportation. Crossing the board with a different guage space adds timing and makes international
railway trade less competitive and effective.

According to official data, during last four years the demand for passenger transportation was decreasing.
Railway passenger operations are managed by state owned company Ukrzaliznytsia. As per 2017 results,
165 million of people were transported by Ukrainian railways with the passenger turnover on the level of
28 043 million-passenger-km.
Passenger transportation is money-losing business for Ukrzaliznytsia and is backed by cargo business
income: in 2017 total losses from passenger business accounted to UAH 11 bn.
Dynamics in long-distance passenger flow, mln people
2002
2005
2010
2011
2012
2013
2014
46,3
60,4
61,6
64,1
58,9
56,3
41,1
2015 39,5
2016
2017
43,0
45,6
Source: Ukrstat
According to the statistics of InterCity Ukraine trains, in 2016 Kharkiv – Vinnytsia was the most demanded
route, where the double-decker train passed on its way 16 stations including Kyiv and Poltava.
The other popular train routes are :
• Kyiv – Krasnoarmiysk (96% of the passenger loads);
• Kyiv – Peremyshl (92% of the passenger loads);
• Kyiv – Kharkiv (89% of the passenger loads);
• Kyiv – Zaporizhzhya (88% of the passenger loads).
Since recently Ukraine has direct rail links with seven European countries: Poland, Czech Republic, Slovakia,
Hungary, Austria, Romania and Bulgaria (in summer season). New routes, flexible tariff policy and new
updated services during the journey, have resulted in massive increase of the passengers travelling to EU
by train: in 2017 it was 6 times as much as a year ago. The hottest destination is Kyiv- Przemyśl with almost
60% of all the passengers travelling to EU.
2.5. Railway
passenger transportation

Roads
24

Slavomir Novak
Acting Head of the State Agency
of Automobile Roads of Ukraine
One of the important tasks that I set before myself as the Head of the State Agency of Automobile Roads of
Ukraine is to link the Ukrainian network of roads with the Trans-European Transport Network. The basis of
these integration processes is the GO Highway project, which we are already implementing with the support
of the President, Ukrainian Government and the Ministry of Infrastructure.
Roadsarecorridorsofeconomicgrowthofthecountry.Accordingtotheexperts,€1investedinthedevelopment
of a road network, gives €2.5 to GDP growth. Without a modern network of roads, it is impossible to build a
modern economy.
Nowadays there are historical changes in the industry. We are creating the foundation, the basis for further
system development for many years to come.
Since the beginning of this year, the EU principle of governance and financing of the industry has been
implemented. These are fundamental reforms for Ukrainian road sector - decentralization, which completely
changes the management system, and the State Road Fund, which provides guaranteed, predictable financing.
This is a new Constitution of the road industry.
The State Economic Program for the Development of National Roads for 2018-2022 was recently approved,
which is the first large-scale five-year plan for developing the industry.
High-quality road infrastructure will have a positive impact on the economic development of both regions
and the country as a whole; it will enable Ukraine to establish itself as a reliable transit country and to provide
new jobs and opportunities.
However, the Program 2018-2022 is part of a general vision for industry development. If we want to develop
a network of roads, build new roads, and not only carry out repairs, we must attract additional funds.
For development, we need three financing points: additional funds for the State Road Fund (payment for
lorries, serious fines for overloaded transport, other additional revenues), new credit lines from international
financial organizations, and private investors’ funds within the framework of public-private partnership.
I am sure that the course we have chosen cannot be changed, and we are moving further - we are implementing
the second stage of decentralization, improving road safety and introducing intelligent transport systems (ITS).
The road industry is actively developing. The dynamics of development and absolute market transparency are
a good foundation for investment.

Ukraine has significant potential for motorway development due to its location on the intersection of
multiple transport corridors. In the direction of Ukraine’s territory there are two corridors of the Trans-
European Transport Network1
: The Rhine-Danube Corridor passes through the waterways of Rhine and the
Danube, with an important branch from Munich to Prague, Žilina, Kosice and to the Ukrainian border; and
the Mediterranean corridor, which runs from the Iberian Peninsula towards the Hungarian-Ukrainian border.
The Rhine-Danube corridor and the Mediterranean corridor include the territory of Ukraine and open up
large prospects for large-scale international cooperation on the development of multimodal transport
between Europe and Asia, and consolidate the status of a transit country.
Map of Trans-European Transport Network (TEN-T)
Source: European Commission
Baltic-Adriatic
North Sea-Baltic
Mediterranean
Orient / East-Med
Scandinavian-Mediterranean
Rhine - Alpine
Atlantic
North Sea - Mediterranean
Rhine - Danube
1
The Trans-European Transport Network (TEN-T) is a European Commission policy directed towards the implementation and development of a Europe-wide
network of roads, railway lines, inland waterways, maritime shipping routes, ports, airports and rail-road terminals.
On November 2017, Ukraine was included in the indicative maps of the European transport network
TEN-T which means that the transport infrastructure of Ukraine should become as soon as possible
a single entity with the EU infrastructure and develop links. Speed, quality, safety of multimodal
transportation should be carried out according to European standards.

Existing road network
Source: Ukravtodor
Ukrainian public roads are owned by the state. The State Road Agency of Ukraine (Ukravtodor) is responsible
for functioning and quality of the roads. Ukravtodor takeы care of 123 thousand km of roads, other are
managed by regional authorities.
On roads of public use there are more than 16.2 thousand bridges and overpasses with the total length of
over 383.9 km.
The state importance roads are utilized by the European E-network of highways and have three indexes M,
H, P, T, each stand for the respective letter of Cyrillic.
443 000km
Total road network
5%
Roads security
measures
123 000 km
Roads of local importance
In charge: Regional State Administration,
35% of State Road Fund
46 985 km
Roads of state importance
In charge: Ukravtodor, 60% of State Road Fund
250 000 km
local communities roads,
In charge: local authority; State Road Fund

E85
E40
E58
E50
E58 E81
E50
E50
E50
E95
E40
E85
E85
E40
E373
E101
E101
E101
E373
E372
E573
E50
E50
E471
E40
E95
E95
E38
E95
E58 E58 E58 E58
E58
E50
E40
E40
E40
E40
E50 E50
E95
E97
E97
E87
E87
E583
E583
E584
E581
E105
E105
E105
E105
E504
E584
The European routes are part of the International E-road network, routes of which run not only throughout
the European continent covering such remote areas as the British Isles, but also parts of the Asian continent
regions. European route E 40 is the longest European route, more than 8 000 km long, connecting Calais
in France via Belgium, Germany, Poland, Ukraine, Russia, Kazakhstan, Uzbekistan, Turkmenistan, and
Kyrgyzstan, with Ridder in Kazakhstan near the border with Russia and China.
Source: Wikipedia
E-road network in Ukraine
Odessa
Lviv
Kyiv
Kharkiv
Dnipro
Donetsk

Quality of roads (IRI2
)
Lviv
According to official data, during last four years the demand for passenger transportation was decreasing.
Railway passenger operations are managed by state owned company Ukrzaliznytsia. As per 2017 results, 165
million of people were transported by Ukrainian railways with the passenger turnover on the level of 28 043
million-passenger-km.
Passenger transportation is money-losing business for Ukrzaliznytsia and is backed by cargo business
income: in 2017 total losses from passenger business accounted to UAH 11 bn.
Kyiv
Odesa
Vinnitsa
Chernihiv
Dnipro
Zaporizhzhya
Mykolaiv
Roads with basic IRI index
Roads with poor IRI index
Source: Ukravtodor
2
The International Roughness Index (IRI) is the roughness index most commonly obtained from measured longitudinal road profiles. It is calculated using a
quarter-car vehicle math model, whose response is accumulated to yield a roughness index with units of slope (in/mi, m/km, etc.). Since its introduction in 1986,
IRI has become the road roughness index most commonly used worldwide for evaluating and managing road systems.
3
Road density is the ratio of the length of the country’s total road network to the country’s land area. The road network includes all roads in the country:
motorways, highways, main or national roads, secondary or regional roads, and other urban and rural roads.
The density3
of Ukrainian roads is 4.6 times less than on average in Europe: 281 km/1000 square km vs 1 300
km/1000 square km. The state of most constructed installations is poor – only 46% out of 16 200 automobile
bridges and overpasses meet requirements, with the rest in the critical condition.
98.7% of the roads in the country have flexible base of pavement, and only 1.3% of them are constructed
with cement-concrete materials. Most roads (98.4%) have only single lane in one direction, accelerating
traffic accident level in the country.

Source: Ukravtodor, Ministry of Infrastructure
Road network capacity
2,7
13,3
km
28,8
km
109,7
km
15,1
km
109,7
km
7,5-9 m
15-30 m
7-9 m
7-9 m
6 m
4,5 m
20 m
8*12 cm
8-12 cm
5 cm
7 000
3 000 - 7 000
1 000 - 3 000
100 - 1 000
100<
7 000
11,5 t
15040 t
10,6 t 40 t
7 t 24 t
120
100
80
60
10,6 t
40 t
120
I
II
III
IV
V
II Road category Axle load.Road width
Road length Road depth Max auto weight
Traffic capacity, auto/daySpeed, km/h
2,74 2,3 2,49 2,59 2,55 2,96 3,51

Since January 1st, 2018 the road sector reform has officially been started by Ukrainian Government. The new
concept of reforming foresees the change of the management system by removing of state monopoly on
the road maintenance market and establishment of the special State Road fund, which is meant to guarantee
stable, long-term financing of the sector.
The majority of roads – 123 th km – were transferred to local authorities, along with funds and autonomy
to decide which roads to repair. The main body, Ukravtodor, is left with 47 th km of roads of national and
international importance. It also gets 60% of the State Road Fund.
Key sources of State Road Fund are:
• excise duty levied upon production and import of petroleum products and transport means
(2018 – 50%, 2019 – 75% and 100% since 2020);
• import duty on oil products and transport means (2018 – 50%, 2019 – 75% and 100% since 2020);
• road payments from vehicles with extra normal weight or size;
• loans and toll payments, other.
Source: Ukravtodor
About UAH 44 bn will be allocated on Ukrainian roads already in 2018, including UAH 33 bn from the Road
Fund, with the target of annual road spending at the level of UAH 70 bn starting from the year 2020.
State road fund dynamics, UAH bn
2017
2018
2019
2020
69,8
51,2
32,6
14,2
5%
development and maintenance
of Ukrainian highways and loans
repayment
3.3. Financing
for road infrastructure

4 000
3 000
3 500
2 500
2 000
1 500
1 000
500
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
553
698 773
348
112
569
2008
1601
626
102
312
927
2100
4 000
According to Ukravtodor, it is planned to repair 23 road objects with the total length of 4 000 km, twice
as much as 2017 results.
Source: Ukravtodor
Roads construction and repairing in Ukraine, 2005-2018E, km
Breakdown of road spending, 2018
UAH 0,4
Lviv region roads
UAH 19,5 bn
Roads of state importance
UAH 32,5 bn
State Road Fund
UAH 1 bn
Zytomyr-Chernivtsi
UAH 2 bn
Kharkiv – Ohtyrka P-46
UAH 2 bn
Dnipro – Reshetylivka H-31
UAH 11,4 bn
Investment projects
UAH 2 bn
Kyiv – Kharkiv – Dovzhanskyy M-03
UAH 11,4 bn
Roads of local importance
UAH 4 bn
Go Highway
UAH 1,63 bn
Traffic security
UAH
44 bn
Total:
UAH 6-7 bn
will come from
customs reform
Source: Ukravtodor
3.3. Financing
for road infrastructure

Go Highway project map
Lviv
Number one priority for the Government and Ukravtodor in road infrastructure is to implement the projects
to connect ports of Black Sea with the ports of Western Europe. In this respect Go Highway project is the
hottest one and is planned to connect ports in Mykolayiv and Odesa with the Polish Gdansk on the Baltic
Sea within the framework of the Go Highway transnational transport corridor.
The implementation of the project will allow accelerating and reducing the cost of transportation of goods
from the Baltic Sea to the Black Sea. Today the price for the transportation of 20 TEUs from Gdansk to
Odessa cost approximately EUR 1 000-1 500, and the implementation of the project will allow to decrease
the cost at 30% with higher quality and traffic security.
Kyiv
Odesa
Vinnitsa
Chernihiv
Dnipro
Zaporizhzhya
Mykolaiv
3.4. Key investment projects
in road infrastructure till 2022
M-09
Ternopil – Lviv – Rava –Ruska
Northern-Eastern
bypass of Lviv city
M-12
Stryi – Ternopil – Kropyvnytskyy – Znamyanka
M-05
Kyiv – Odesa
M-14
Odesa – Melitopol – Novoazovs
It is expected that the project will be implemented in five stages (simultaneously or one by one depending
on the availability of funds):
Source: Ukravtodor
Construction of Lviv-Krakivets road;
Northern bypass of Lviv city;
Construction/reconstruction of Lviv-Uman road;
Capital reconstruction of the road to Odesa;
Capital reconstruction and repairing of the motorway Odesa – Mykolayiv – Kherson.

For the reason of insufficient budgeting of the road network development the Ukrainian government
is constantly seeking for cooperation with international financial institutions. As of beginning of 2018
total loans of Ukravtodor was almost UAH 42 bn. Most of the resources are the loans provided by
international financial institutions received for renovation of few automobile roads within transnational
transport corridors.
In such conditions when the level of loan debt is high, the Ukrainian road network requires cooperation
of public and private sectors, development of partnership relations between the state and business,
especially when it comes to realization of national importance projects, like Go Highway.
Until now no projects on PPP/concession of roads were implemented in the country, and mainly due to
some bottlenecks in the legislation and absence of feasible proposals from the public side. On March
25th, 2018 the Law of Ukraine On Amendments to Several Legislative Acts of Ukraine in the Field of
Highways Construction and Operation, entered into force, and aims to improve the legal framework for
the construction of highways of national importance under the concession model. Among others, the
law introduces clear and transparent tender procedure in accordance to the best international practice,
simplifies land buyout mechanisms, provides additional guaranteed to private investor and a lender, and
introduce the possibility of private initiative.
Potential investment projects
Lviv
Kyiv
Lviv – Uzhgorod
Northern-Eastern
bypass of Lviv city
Lviv – Uzhgorod
Bridge across
the Danube River
Kyiv Ring Road
Kyiv-Bila Tserkva
Boryspil bypass
Source: Ukravtodor

In terms of implementation of the 1st
stage of Go Highway program, Ukravtodor plans construction of
the Lviv-Krakivets highway, which would become the first concession road in Ukraine with the potential
expanding with northern bypass road around Lviv city. As a part of international corridor, it could become
an important project for the transit development of the country. The proposed new road (84.4 km) shall
go in parallel to the existing M10 (E40) motorway from Korczowa-Krakivets border crossing and serve as a
continuation of A4 motorway (Poland).
Investment in construction of the highway is expected to be recouped through collection of fares, as well
as from fees for access and operation of road service facilities, roadside infrastructure, advertisements,
logistics centers, and modern communications lines along the highway.
The approximate period of construction of the highway will be four to five years. The period of concession
is planned to be up to 49 years. The concessionaire will be responsible for construction, maintenance, and
repair of the four-lane highway, which will be built in accordance with the requirements for category 1-A
highways. Approximate travel speed on the highway will be 120 kilometers per hour.
Among the other key projects of Ukravtodor, that are of interest to private investors and financial institutions,
are:
Construction of new Kyiv ring road, which is
expected to unload the capital from the freight
transit transport. Total road length to be built is
149 km with 35 interchanges, 50 overpasses, 2
bridges over the Dnipro river, bridge over Desna
river and 42 roadside services.
Construction of new concession road Kyiv-Bila
Tserkva with the new access to Kyiv bypassing
Boryspil city. Ukravtodor plans to finalize feasibility
study on the project till the end of 2018, and to start
construction works already in 2019. The estimated
value of the project is USD 300 mln.

Sea Ports
36

Raivis Veckagans
CEO of Ukrainian Sea Ports Authority
Ports are the sea gates of our country. They account for more than 40% of export and import operations of
Ukraine’s foreign trade. The use of waterways for the delivery of cargo has many advantages, since it is more
environmentally friendly and more economically efficient than other modes of transportation. In addition,
ports are the driver of national economy development. Therefore, attracting investments in ports is our top
priority.
Ukrainian Sea Ports Authority (USPA) is a state-owned enterprise that develops ports of the country based
on the best world practices. Ukraine has an advantageous geographical position, located at the intersection
of transit corridors. Due to the changes of geopolitical and geo-economic situation, reorientation of cargo
flows, changes in cargo-mix, we have updated the Seaports Development Strategy until 2038. The strategy is
aimed at improving service in seaports, balancing development of terminal and basic infrastructure, creating
conditions for attracting private investments, and transiting to the landlord-port management model.
In particular, the number of projects to be implemented by investors in seaports until 2038 is about 44, their
total capacity is expected at 143 million tons and 1.4 million TEUs. The total cost of projects is almost USD 1.4
billion. Implementation of the Strategy will result in creation of up to 5 thousand jobs in the port sector. We are
considering two scenarios for cargo throughput forecasts until 2038. According to base scenario, Ukrainian
ports have a prospect to reach 184 million tons per year, and optimistic one – 246 million tons. Concession
projects will also contribute to this. So far, four projects have already been announced for stevedoring company
«Olvia», Kherson Commercial Sea Port, railway-ferry complex of Chornomorsk Commercial Sea Port, and also
Yuzhny Commercial Sea Port.
We believe that joint efforts of USPA and Office of the National Investment Council will help attract global
investors to work and develop business in the Ukrainian ports.

Ukraine possesses the most powerful port potential among all countries of the Black Sea region. Along
its Black and Azov Seas coastline there are 13 merchant seaports1
: Reni, Izmail, Ust-Dunaisk, Belgorod-
Dnestrovskiy, Chornomorsk, Odessa, Yuzhniy, Mykolayiv, Olvia, Kherson, Skadovsk, Berdyansk and Mariupol
with 263 berths (over 40 km length). The total handling capacity is 149 mln t of mixed and bulk cargoes,
42 mln t of liquid cargoes, 40 mln t of container cargoes (3.5 mln twenty-foot equivalent units), and 1 mln
passengers.
The largest ports are those of Odessa, Chornomorsk and Yuzhniy, all situated not far from each other in
the north-western part of the Black Sea. These three ports alone totally account for 63% of the entire
cargo turnover in Ukrainian merchant seaports. These ports offer the best approach ways (drafts of vessels
accommodated are 11.5 – 19.0 m.). The other ports in Ukraine can accommodate ships with considerably
less draft. The major container terminals in Ukraine are also located in the ports of Odessa, Chornomorsk
and Yuzhniy.
At the mouths of the largest Ukrainian rivers, the Dnipro and Yuzhniy Bug, there is another cluster of merchant
seaports, namely Mykolayiv, Kherson, Olvia, which handle both bulk and general cargoes.
Sea ports on the map of Ukraine
Reni
Izmail
Yuzhny
Odesa
Illichivsk
Bilhorod-Dnistrovsk
Mykolaiv
Olvia ( exOktiabrsk)
Kherson
Skadovsk
Genichesk
Berdiansk
Mariupol
Yevpatoriia
Sevastopol
Kerch
Feodosiia
Yalta
Source: Ministry of Infrastructure of Ukraine
1
Excluding 5 ports in Crimea

The main problems with Ukraine’s seaports - as well as its river ports - are aging technologies and poor
infrastructure. But changes are occurring. The Ukrainian Sea Ports Administration (USPA) was found in 2013
as a result of the maritime industry reform of Ukraine to manage state property in the seaports and to use
it efficiently, create mechanisms to attract investments in the port infrastructure for its development and
stable business performance. There are other tasks of the USPA, like maintenance of the passport depths
of the ports’ water area and ensuring safety of navigation.
In 2018 USPA plans to invest ca UAH 4.3 bn for the reconstruction of critical seaport infrastructure, mostly
dredging and berths repairing.
Ports and draft
Ferrous metals
Ore
Grain
Top 3 cargoes:
Ferrous metals
Grain
Containers
Grain
Ore
Coal
Coaster Handymax Capesize
Capesize
Bilhorod-Dnistrovsk SP
Ust-Dunaisk SP
Skadovsk SP
Yevpatoria SP
Izmail SP
Reni SP
4 m
4 m
4.5 m
5 m
7 m
7 m
Bilhorod-Dnistrovsk SP
Ust-Dunaisk SP
Skadovsk SP
Yevpatoria SP
Izmail SP
Reni SP
Kerch SP
Berdiansk SP
Mariupol SP
4 m
4 m
4,5 m
5 m
7 m
7 m
5,5 - 7,9 m
5 - 8 m
5 - 8 m
Kherson SP
Yalta SP
7 - 8,1 m
10 m
Olvia SP
Mykolaiv SP
Feodosiya SP
Sevastopol SP
Odesa SP
Chornomorsk SP
Full draft / deadweight
The biggest type of vessel, which may be
loadead at the birth until the full draft
10,3 m
4,5 - 10,3 m
12,3 m
8 - 12,4 m
7,6 - 13,5 m
9,8 - 14 m
Yuzhniy 12,2 - 19,0 m
4 - 10 m 5 - 14 m 14 - 19 m
<15,8 / <180 thnd,t

USPA: key development projects
Dredging of Yuzhniy port
It is planed to continue dredging of Yuzhniy SP
approaching canal operational basin near berths #5
and #6. Will allow to load the vessels up to 260 th t
Total project price is UAH 586 mln
The design documentation is being developed to
ensure the possibility of passage of vessels in the
round-the-clock mode with the creation of a zone of
vessel’s passage in BDLC Project timeless is 2018-2019
Volume of works - 91,7 mln m3
Total project price is UAH 586 mln
Reconstruction of Bug-Dnipro-Lyman channel to 15 m
Draft 13,5 m
Length 230 m
Wigth
32,5 m
Development and approval of «Project» Stage
23 months
26 mln USD
337,2
15 m
3,0 mln tons
Container ship SC – 5 000, SC – 8 000,
DWT bulker 100 – 180 ths. tons
2018
Term
Cost
Berth length
Project depth
Throughput
Estimated vessel
Start of construction works
24 months
26 mln USD
398,65 m
15 (16) m
1,7 mln tons
Bulker DWT 80 ths. tons
Development and approval of «Project» Stage
15 months
78 mln USD
2018
Term
Cost
Length of berthing front
Project depth
Throughput
Estimated vessel
256 m
17 - 21 m
41,3 mln tons
bulker DWT till 100 - 250 ths. t
Chornomorsk seaport: reconstruction of hydraulic part
Yuzhnyi seaport: reconstruction of berth complex
Source: Ukrainian Sea Ports Authorities
Berth #2 Berth #7
Berths #5, #6, #7, #8

TOP-10 sea port operators
The market of stevedoring business in Ukraine is open, and state-owned seaport operators compete with
private terminals. More than 100 domestic and foreign port operators are engaged in handling cargoes at
Ukrainian ports. The share of state-owned stevedoring companies in total freight transshipment is decreasing
year over year: from 100% in 1991 to 26% in 2017.
State-owned operators primarily transship ore (34% in 2017), metals (18%) and coal (15%), while grain
accounted for only 9%. The last commodity is mostly handled by private seaport operating companies.
4.2. Port operators
Port operator
TIS (Yuzhniy SP)
State stevedoring company “Yuzhniy Sea Port”
State stevedoring company “Chornomorsk SMP”
Brooklin-Kyiv (Odessa SP)
State stevedoring company “Mariupol SMP”
Dniprobugskyi Port NGZ (Mykolayiv)
State stevedoring company “Izmail SMP”
Nika-Terra (Mykolayiv)
HPK Ukraine (Odessa)
Nibulon (Mykolayiv)
11 694
10 704
945
21 460,0
12 314,6
6 579,9
7 492,8
6 958,8
4 213,3
5 418,0
3 996,8
4 121,4
4 547,1
N
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Cargo turnover,
2016
10 704
945
25 022,3
11 460,2
7 102,5
6 803,2
5 882,4
5 106,7
4 873,6
4 183,6
4 055,7
2 849,9
10 704
945
17
-7
8
-9
-15
21
-10
5
-2
-37
Change, %Cargo turnover,
2017

Sintez Oil
OPP
Everi
Delta Wilmar CIS
Olir resources
Risoil-Terminal
Ukrpischebytsyryo
Terminal Stevedoring
Mikont
Greentour-Ex
Transinvestservice
SP “STP Yuzhnyi”
SC “Izmail STP”
Mykolaiv Alumina Refinery
Chornomorsk STP
SC “Mariupol STP”
SC “Berdiansk STP”
Nika-Tera SSP
SC “Kherson STP”
PJSC “OPZ”
2 464
100%
2 370
2 354
625
609
588
375
354
325
312
10%
42%
37%
35%
92%
122%
88%
78%
78%
65%
100%
82%
23%
98%
51%
29%
48%
11 266
12 258
4 986
4 111
3 309
2 301
2 063
1 623
963
924
74%
82%
66%
74%
4.2. Port operators
TOP terminals by cargo type
Transshipment, thnd t Utilization, %
Liquid
Bulk
5 231
3 542
3 277
3 030
2 919
2 532
2 521
2 365
1 553
1 500
97%
99%
97%
81%
101%
84%
129%
75%
100% 100%
80%
72%
Transinvestservice
Brooklin-Kyiv
Transbulkterminal
Illichivsk Grain Terminal
Nibulon
Greentour ex
Olimpex
Coupe International
Nika-Tera SSP
OZT
TIS-Fertilizers
4 368
2 367
2 177
1 679
1 190
1 102
758
720
592
468
17%
100%
85%
87%
76%
18%
54%
23%
51%
99%
Transinvestservice
Brooklin-Kyiv
Transbulkterminal
Illichivsk Grain Terminal
Nibulon
Greentour ex
Olimpex
Coupe International
Nika-Tera SSP
OZT
TIS-Fertilizers
Grain
General
4 115,3
2 594,5
971,3
202,1
3,7
0,5
0,1
0,1
100%
100%
100%
100%
24%
7
100%
59%
173%
HPC Ukraine
Brooklin-Kyiv Port
Transinvestservice
Chornomorsk STP
Olvia
Trans-service
Kherson Shipyard
UNSC
Container 1 071,4
7,3
100%
59%
100%
Chornomorsk STP
Skadovsk STP
Ro-ro
1 071,4
7,3
100%
59%
100%
Chornomorsk STP
Skadovsk STP
2016
2015
1
Excluding transshipment at outer anchorage
2
Bulk capacities are used for general cargo transshipment
3
Is not a specialized grain terminal
1
1
2
3
1 071,4
7,3
100%
59%
100%
Chornomorsk STP
Skadovsk STP
The competitiveness of Ukrainian domestic transport complex depends on the efficiency of ports, level of
their technological and technical equipment, compliance of management and infrastructure development.
While critical infrastructure needs are covered by state (USPA), stevedoring business is liberalized and open
for private investments.

4.2. Port operators
During last three years several port operators have started their activities in Ukrainian ports:
Some completed projects:
Bunge in Mykolayiv sea port.
Total investments:
USD 280 mln.
COFCO in Mykolayiv sea port.
Total investments:
USD 75 mln.
Risoil in Chornomorsk sea port.
Total investments:
USD 70 mln.
Ongoing projects:
Cargill in Yuzhniy sea port.
Totalexpectedinvestments: USD 150 mln.
Kernel in Chornomorsk sea port.
Totalexpectedinvestments: USD 100 mln.
Eurovneshtorg in Olvia sea port.
Totalexpectedinvestments:
50-100 mln.USD
According to European Bank for Reconstruction and Development (EBRD), the port sector of Ukraine is
now the most promising in terms of using concession contracts, it is developing dynamically, and there is a
considerable interest from the private sector. Together with the implementation of new updated legislation
on PPP/concession, the Government of Ukraine has also started to prepare the pilot projects on concession
of two state-owned stevedoring companies – Kherson and Olvia. The tenders on both are expected to
be announced till the end of 2018. International Financial Corporation (IFC) together with EBRD acts as
financial advisor on the proposed transactions.

4.2. Port operators
Statistics 2017
Olvia project
34%
36%
9%
21%
2,21
2,51
2,21
1,07
0,62
0,92
0,72
0,16 0,22
0,30 Cereals
Construction
materials
Ferrous
metal
Other
2016 2017
+13%CARG
Project area
Nr. of berths
Max depth
Quay lengh
Market share (Ukraine)
Revenues
EBITDA margin
Cargo turnover
179 ha
7
10,3 m
1,53 km
2%
14,3 mln USD
41%
2,5 mln t
Cargo growth (mln t) Cargo mix (2017)

4.2. Port operators
Statistics 2017
51,4%
1,22
1,04
Processed
agri products
Scrap metal* Including sand from offsite pit
8,5%
Other
2016 2017 6,8%
1,3%
Cereals
Bagged cargo
1,3%
Sand
3,0%
4,1%Fertilizers
Project area
Nr. of berths
Max depth
Quay lengh
Market share (Ukraine)
Revenues
EBITDA margin
Cargo turnover
45 ha (right & left banks)
4
7,6 (channel)
601 m
~1%
9,7 / 6,4 mln USD
27 / 4.1%
1,22 / 1,04 mln t
Cargo volumes (mln t)* Cargo mix (2017)
Kherson project

132.6 million tons were handled in Ukraine’s seaports in 2017, which is 0.8 million tons or 0.63% more
compared to the same period last year. Transshipment of import cargo increased to 20.4 million tons
(+27.8%), transit cargo to 11.8 million tons (+ 14.3%), while export and cabotage handling decreased to
98.5 million tons (-1.7%) and to 1.8 million tons (-64.9%), respectively.
Cargo structure in 2017 was traditionally driven by bulk (58% of total amount) – ore, coal and grain, and
metallurgical products (11% of total amount).
Despite some decline, export is traditionally driven by grain – 38 million tons and ferrous metals – 14.1
million tons. Export of oil through Ukrainian ports at the same time grew to 5.2 million tons (+19.5%). The
highest growth in the structure of import was provided by increasing volumes of coal transshipment to 6.1
million tons or 64.2%.
Sea ports cargo dynamics, mln t
157,9 169,6 157,2 148,2 155,0 153,9 149,7 142,8 144,6 131,7 132,6 Total
of the year
Export
Cabotage
Transit
Import
100
120
60
80
40
20
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
98,5
20,4
11,8
1,8
2017
Transshipment structure 2017, mln t
5,72
3.88
0,61
Export Import Transit Cabotage
Bulk
Grain
General
Liquid
Container
Ro-ro
35,03
38,00
15,27
2,20
3,45
0,31
13,81
0
0,65
2,99
0,53
0,29
6,81
0,54
0,64
0,11
0,19
0
0,93
0,61
0,17

TOP-3 Ukrainian ports – Yuzhniy, Odessa and Mykolayiv – handled almost 70% of total seaborne trade
during the period.
Transit dynamics, mln t
20142013 2015 2016 2017
15,9
10,3
11,8
20,7
27,2
-22,9%
-23,9%
-23,2%
-35,1%
+14%
Volume of transit has declined more than twice during last five years – from 27.2 million tons in 2013 to
11.8 million tons in 2017. At the same time last year was the first time during this period, when the transit
flow grew plus 14%. Key drivers are - coal and rolled metal products transshipment increase to 4.4 and 0.52
million tons respectively.

Regardless of the 20% reduction of the port charges starting from January 1st, 2018, Ukraine’s logistics is
by far more expensive and complicated by international standards.
Among other things, the costs of moving grain from Ukrainian farms to the Black Sea ports are approximately
40% higher than costs for comparable logistics in France and Germany, and 30% higher than costs in the
United States .
Port costs seem to be especially high in Ukraine compared to its competitors. Grain traders, for example,
incur significantly higher costs at ports (black chunk of bars) compared to their competitors in the EU and
US, i.e. their costs are higher almost by a factor of 3.
Wheat logistics costs in Ukraine compared to other countries (USD/t, 2010)
Port costs in general can be divided into:
FranceUkraine Germany USA
15,9
11,8
20,7
100%
60% 60%
70%
60
50
40
30
20
10
0
Field-elevator Elevator-port At port
charges related to handling the cargo: the costs of terminal load/discharge operations,
storing, vessel load/discharge operations, certification and forwarding fee etc.
charges related to serving the vessels at port: for call and stay of a vessel in the port of
loading, agent fees and any additional expenditures, that are negotiated in a charter (number
of ports of loading, number of loading berths, additional expenses connected with shifting
the vessel, others). These costs are contained in so-called vessels disbursement account and
port charges make up a considerable share in it.

The Ukrainian ports collect income from at least fourteen to up to twenty tariffs:
Port costs breakdown for key export products from Ukraine, 2016
Source: World Bank, Ukrainian Sea Ports Authority
Grains 1 Grains 2 Ironore 1 Ironore 2 Metall-rolls 1 Metall-rolls 2
27,2
20,45%
79,55%
22,75%
79,55%
34,94%
65,07%
29,08%
70,93%
23,12%
76,88%
18,68%
81,31%
Cargo expenditures Vessel expenditures
Note:
Grains/Iron Ore/Metall-Rolls 1 or 2
indicate port costs in different ports
Seven main tariffs – tonnage dues, light dues, berth dues, canal dues, anchorage dues,
administration dues and sanitary dues – are established by the Ministry of Infrastructure/Sea
Port Authority of Ukraine (USPA). They are paid mainly to USPA (except light dues is paid to
the State Enterprise Derzhhidrografia and administration dues is paid to the State Budget of
Ukraine) and they dominate in the structure of the vessel call costs, i.e. 60% to 70%;
Special services tariffs – VTSM, pilotage and ice breaker – are also regulated;
Another five tariffs – towage, boatmen dues, Harbor Master fees, port information fees,
watch keeping services and sealing of output valves are paid to other agencies, they are
not regulated.
It would be relatively safe to assume that port charges make up on average 20 to 50 % of the total port
costs for key Ukraine’s commodities.

There is a large body of evidence that Ukraine’s port tariffs systems and price differ from comparable ports
elsewhere in the world. According to the main container shipping lines information, Ukrainian port authority
tariffs are very high by international standards. An example of port costs based on a typical container ship’s
itinerary in the region concludes that Ukraine’s tariffs are over 2.5 times as high as the average for six other
ports in the region.
Example of payments by a Panamax dry bulk carrier at Ukraine’s ports, USD
Odesa Chornomorsk Yuzhny Mykolayiv
250 000
200 000
150 000
100 000
50 000
Port dues (paid to USA) Canal due (paid to USA) Light+Administration due
Towage Pilotage Other dues
Cargo handling expenditures are market based in Ukraine and the government has little leverage to
influence them in the short run. Grain port terminal capacities increased from 32 million tons to nearly 52
million tons over the last 5 years and cargo handling prices decreased from USD 17-18/t two years ago to
USD 11-13/t today. Port charges, on the contrary to cargo handling prices, are established and regulated
by the government, i.e. by the Ministry of Infrastructure of Ukraine/Ukrainian Sea Port Administration and
this is where the government can improve export/import logistics costs via revising of its port charges and
making them competitive with the ports elsewhere in the region and in competing destinations.
Port charges based on a typical container ship’s itinerary
Port
Odessa
Constanza
Port Said W
Port Said E
Sokhna
El Dekheila t
Evayp
Ambarli Kumport
10 704
945
Country
10 704
945
157
71
54
50
67
47
75
67
Payments per call,
in 000 USD
Ukraine
Romaniaa
Egypt
Egypt
Egypt
Egypt
Turkey
Turkey

River
infrastructure
51

Ukraine has high potential navigable rivers - over 4 000 km, but actually uses less than 10% of its rive
freight transport capacity, with inland waterways accounting for less than 1% of total freight traffic,
compared to an average of 7% in the EU.
Two main rivers are Dnipro, 1 205 km (Waterway E40 according to UNECE classification) and Danube,
160 km (Waterway E80, E 80-09 according to UNECE classification), are among TOP-5 biggest inland
waterways in Europe. Since Ukraine gained independence in 1991, length of river waterways decreased
almost twice (from 4 000 km to 2 100 km). At the same time the density of river shipping routes reduced
1.75 times; intensity of freight transport - in 4.3 times, and passenger transportation - 7.5 times.
Inner water way length, km
Source: Eurostat
As of 2017, the total length of Ukrainian navigable inner waterway (IWW) equaled to 1 563 km. Key
IWW arteries that are operated now include Dnipro river (Kyiv and Kaniv sections for cabotage and
Zaporizhzhia/Dnipro-Kherson section for river-sea transport), Yuzhniy Bug river (Mykolayiv-Nova
Odessa section) and Danube river.
The capacity of IWW is limited by the capacity of the navigable water along key river arteries. For Dnipro
river the controlling depth indicator varies from 1.9 m to 3.5 m and for Yuzhniy Bug river – up to 2.2 m.
1000
2000
3000
4000
5000
6000
7000
8000
0
Germany
7 565
France
5 132
Poland
3 630
Ukraine
2 100
Romania
1 779
Hungary
1 597
Italy
1 562
Bulgaria
470
Austria
351
Innerwaterwaylength,km

532018 | National Investment Council | Transport infrastructure of Ukraine2018 | National Investment Council | Transport infrastructure of Ukraine
The main river of Ukraine – Dnipro – runs just in the middle of the territory from North to South, the delta
of Dnipro provides convenient access to the largest seaports of Ukraine. Its length from Kyiv to the river
mouth is 867 km. There are six locks and six reservoirs located on the Dnipro river.
Key IWW of Ukraine with Dnipro river reservoirs and shipping locks
Source: Internet
Kyiv lock
Kaniv lock
Kremenchuk lock
Dniprodzerzhynsk lock
Kahovka lock
Zaporizhya lock
E 40
E 40
Source: UkrVodshlyah
All the existing locks are in need for urgent rehabilitation to ensure a proper functioning of the locks, as their
potential failure could result in important reduction of traffic intensity and increase transportation costs.
Dnipro river reservoirs and locks characteristics
Reservoir / lock
Reservoir
length (km)
Channel
depth (cm)
Channel
width (m)
Lock
length (m)
Lock
width (m)
Kyiv 162 125-250 50 150 18
Kaniv 123 365 60 270 18
Kremenchuk 185 365 80 270 18
Dnieperdzerzhinsk 114 365 80 275 18
Zaporizhya 129 365 80 290 18
Kakhovka 212 400 60 270 18
E 80-09

Depth of the Dnipro river is another constrain for goods transportation. The allowed draft of vessels on
Dnipro is 3.65 m lower from Dnipro city and limited to 3 m in the upper part of the river. Draft of Kyiv
reservoir is limited to 2.65 m. Stone ridge-corner near Dniprodzerzhinsk and shallow river depth near
Kaniv limit the draft to 3 m.
There are also a few mobile bridges that impose limitations for river navigation on the Lower Dnipro
River, - in Dnipro and Kremenchug cities, for which the height of fairway arches is 8.5 m and 9.6 m
respectively. The height of fairway arches of Kherson Bridge is 17.2 m.
In order to identify the prerequisites to develop the river Dnipro for transport, the Ministry of
Infrastructure and Dutch Embassy started the “Dnipro Development Initiative” in September 2016,
after the US Army Corps of Engineers did a study of the locks. The EIB, EBRD and EU delegation were
quick to join, doing different prefeasibility studies that potential investors will need in order to consider
investments. The priority tasks facing the Government of Ukraine in terms of river development - are
the adoption of the Law on Inland Water Transport, the introduction of norms and standards of
the European Union on the rivers of Ukraine, dredging of rivers and sustainable financing for the
maintenance of river infrastructure.
There are 10 river ports on the Ukrainian part of the Dnipro river. Total annual capacity of river terminals
could reach 9.5 mln tons, but part of river terminals is obsolete and non-functional.
Kyiv
Cherkasy
Kremenchuk
Dniprodzerzhynsk
Zaporizhya
Nikopol
Nova Kakhovka
Kherson
Mykolaiv
Dnipro
Dnipro river ports

5.2. River cargo transshipment
40
30
35
25
20
15
10
5
0
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Tonsoffreight(millions)
Gradual river system failure Total river system failure
Potential future freight traffic Historic/projected freight traffic
Freight traffic dynamic on Dnipro river
At risk
potential
At risk current
system capacity
At risk
of total failure
From almost 60 mln tons of river transshipment in 1990, the share of transportation by inland waterways
(IWW) in Ukraine today is less than 1% of the total transportation volume, while the average rate in the EU
countries is 7% (Germany – 12.6%, Romania – 20.7%, Hungary – 4.2%). Key cargo is grain and other agro
products, metals and chemicals.
River ports and terminals capacity can potentially provide for transporting and processing of up to 50
million tons of cargo. Major port infrastructure belongs to private companies (Ukrrichflot, Nibulon and
Germes-Traiding). Main cargo carried between river and sea ports are steel, grain, sand and other bulk
cargo. In addition, new container line between Dnipro and Odessa has been launched.

Air transport
56

The Ukrainian aviation and airport infrastructure is made up of 20 airports, 11 airfields (aerodromes)
and some 35 air strips (take off and landing strips) that are being operated separately. Two out of TOP-5
airports – Boryspil and Lviv International Airports - are state-owned, while others belong to territorial
communities or operated in the form of public-private partnership.
According to the data of State Aviation Administration of Ukraine, 98% of passengers turnover in 2017 was
operated by 7 leading airports - Boryspil International Airport, Airport Kyiv (Zhulyany), Odessa International
Airport, Lviv International Airport, Kharkiv International Airport, Zaporizhzhya and Dnipro Airport.
Airports infrastructure as of 2017
Source: Ukrainian Institute for the Future
Growing
Dropping
Ad-hoc or technical flights
In operation
Current reconstruction
Reconstruction is needed
In operation
Current reconstruction
Reconstruction is needed
Absent
1
Airport
Emerging airport
Occupied
Rivne
Lviv
Uzhgorod
Ivano-Frankivsk
Chernivtsy
Vinnytsya
Odessa
Growth of passengers
turnover in 2017
1
1
1
1
1
1
Kryvyi Rig
Zhytomyr
Zhulyany
Gostomil
Bila Tserkva
Cherkassy
Poltava
Kharkiv
Dnipro
Zaporizhzhya
Kherson
Mykolayiv
Simferopil
Boryspil
+28%
Source: Ukrainian Institute for the Future

Providing high growth potential of the sector and existing infrastructure, the Government of Ukraine is
interested to attract private investors to development of regional air transportation. Airport charges for
aircraft and passenger services are more competitve than in some neighboring countries.
Boryspil
Kyiv (Zhulyany)
Odessa
Lviv
Kharkiv
Dnipro
Zaporizhzhya
Others
2%
64%
11%
7.5%
6.5%
5%
2%
2%
Lviv
Krakiv
Kharkiv
Kaunas
Boryspil
Warsaw
12 8.44 11 11.9 13.5 16.85 14 12.96 10.5 10.6 13 15.8
Source: State Aviation Administration of Ukraine
*Share of passenger turnover in 2017, %
Source: Ukrainian Institute for the Future. As of July, 2017
Leading airports of Ukraine*
Comparison of Ukrainian and EU airport charges

Boryspil International Airport is the largest airport in Ukraine (64% of total passengers flow) and the main
airport serving the capital city. The airport is located 29 km southeast of central Kyiv near the city from
which it takes its name and accessibility in and out of the capital will soon improve with the construction
of a rail line due to commence in November, 2018.
It is among the top-3 best airports in Estern Europe
22% passengers growth in 2017 reaching 10.5 mln passengers
The largest airline in the port is Ukraine International with 70% of seat capacity, with the
second largest carrier Lufthansa on 4.2%, followed by the local charter Windrose Airlines
on 4%. Only 1.8% of capacity is currently flown by low cost airlines, though it will change
already in 2018, starting with Ryanair first flights since October 2018.

It has 2 runways, 4 passenger terminals with total capacity of over 5 000 passengers per
hour and 1 cargo terminal with 9 warehouses and total area of 14 580 m2
Facilities are used by 33 airlines, which provide 76 regular flights
Short-stay car parking facilities available at the terminals B and F, first multi-storey car
park at the biggest terminal D is under construction
Airport concession is being considered
Key facts :
Boryspil International Airport
3
3
3
6.2. Overview
of state-owned airports

Lviv international Airport
Located 6 kilometers from center of Lviv, Lviv International Airport is the biggest in Western Ukraine with
close proximity to the EU.
The terminal area is 47 233 m2 and one runway of 3 305 m
46.3% passengers growth in 2017 reaching 1 mln passengers
Airport has 9 departure gates and 1 125 parking places. Hour capacity is 2 000 PAX
30 international and 2 domestic regular flights
In 2013 Lviv Airport was awarded as the “Best CIS Airport” on the forum “Development of
Airports in Russia and CIS”
Car parking for 238 autovehicles
Airport concession is being considered by the Government to attract investments into
further development of airport capacity
Key facts :
3
3
6.2. Overview
of state-owned airports

According to the International Airport Council statistics, Ukrainian airports are among the fast growing
in the region:
• passengers growth in 2017 reached 16.5 mln people – 27.6% in yoy
• the number of aircraft arrived and departured amounted to 159.9 thousand showing 20% yearly growth.
Visa free regime with more than 75 countries, including with EU that started from June 11th, 2017,
significantly increased passengers flow from the country.
Regular flights between Ukraine and the world in 2017 were carried out by 10 domestic airlines and 29
international airlines to more than 60 countries of the world. The geography of international regular flights
is expanding both by domestic and foreign operators.
The average employment rate of passenger seats of Ukrainian airlines :
• international regular flights - 78.8%
• domestic regular flights - 74.0%
During last two years, several foreign airlines started operation in Ukraine, covering both international and
domestic routes, like Ryanair, Qatar Airways, Ernest SpA, SkyUp, etc. 95% of all international flights were
operated by six leading companies: Ukraine International Airlines, Azur Air Ukraine, Windrose, YanAir, Bravo
and Atlas Jet.
Passengers transportation through Ukrainian airports
Source: State Aviation Administration of Ukraine.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
8954,9
12464,8
14107
15134,6
10896,5 10695,1
12929,9
16 948,9
10686,9
Total
Domestic
International
Year
10242,5
2512,2
8174,7
2363,8
10101
2632,6
11474,4
2433,9
12700,7
1326,8
9569,7
1273,9
9421,2
1635,4
11294,5
1 907,8
14591,1
1978,7
6976,2
1945,9
8296,6
3
As per 2017 results

2013 2014 2015 2016 2017
78,6
74,3
82,8
99,2100
80
60
40
20
Cargo and mail transportation
through Ukrainian airports.
69,1
Aviation remains the least commonly used means of freight transportation in Ukraine, demonstrating
however 12% of growth in 2017.
Freight and mail transshipment is operated by 18 local air companies and mostly by charter flights. Almost
83% of total amount in 2017 was hadled by Antonov Airlines, Ukraine International Airlines, ZetAvia, Maximus
Airlines, Urga and Europa Air.
Cargo and mail transportation through Ukrainian airports, th t

With the increasing trade volumes both with EU, China and Middle East, Ukraine is well located for modern
air cargo hub to opearte in the country and the Government is interested to structure potential public-private
partnership deal to build new cargo complex in Boryspil International Airport .
According to the results of the annual assessment of the aviation safety management system in 2017, Ukrainian
State Air Traffic Services Enterprise ranked 3rd among 47 air navigation service providers in the European region.
The Association Agreement between EU and Ukraine, and the Deep and Comprehensive Free Trade Area
Agreement (DCTFA), provides for the coordinated development and progressive liberalisation of air transport
between Ukraine and the EU through the implementation of a Common Aviation Area Agreement (CAAA).
Ukraine is prepared to sign the agreement and is waiting for the EU approval. The EU has approved a short-term
procedure for Ukraine to negotiate temporary bilateral agreements with EU members .
CAA when approved by Ukraine and the EU will build a common market for the air transport services based
on the rules that are beneficial for both sides. The CAAA will increase aviation safety and security, create more
competition, market opportunities and improvements for air carriers. The expected results for passengers
and cargo operators would be more choices of air routes and lower prices as EU has experienced since the
implementattion of its aviation internal market freedoms.
Ministry of Infrastructure of Ukraine, Boryspil International Airport
Ministry of Infrastructure of Ukraine, National Transport Strategy - 2030

2018 | National Investment Council | Transport infrastructure of Ukraine2018 | National Investment Council | Transport infrastructure of Ukraine
Forthcoming
infrastructure
reforms
67

One of the major challenges for further development of infrastructure is lack of public finance
that could be allocated for infrastructure projects as well as low efficiency of both central and
local government to run infrastructure projects. Thus, facilitation of public-private partnership
(PPP) in the sector could significantly increase both its efficiency and attract private capital for
infrastructure modernization.
Concession, being one of the widely used form of PPP, have a huge potential to boost private
capital for the sector development. In order to implement best international practice for
concessions, Ukrainian Parliament in April 2018 approved in first reading the new Concession
Law, which stipulates among others:
• Clearly-defined timeline and requirements for the preparation of each of the concession
stage.
• Three alternative procedures for concession project implementation: a tender, a competitive
dialogue and direct negotiations.
• Improvement of land issues while implementing concession project: possibility of mandatory
disposal of land plots for the purposes of concession of socially important projects.
• Possibility to initiate converting of existing lease agreements into concession contract.
• Possibility of pledge of the property rights under concession agreement subject to consent
of the concessor, thus making concession projects bankable and more feasible form investor
standpoint.
• Stabilization clause whereby changes of Ukrainian legislation do not apply to the concession
contracts except for those that: reduce tax and duties or abolish such tax and duties; simplify
business regulations; relax state control procedures or reduce liability of the concessionaire.
• Permit for resolution of disputes in neutral international fora and possibility for submission
of concession-related disputes to the international arbitration tribunals.
Adoption of exhaustive list of state-owned infrastructure objects available
for private investments.
The Government is called upon to approve a regulation which would definitively list the state-
owned assets that can be subject for privatization or concession/PPP with the clear exemption
of those, remaining under the state control. Such regulation would enable investors to have a
clear business pipeline of potential projects as well as preclude arbitrary denial of investment
proposals by the state authorities. This list is expected to cover non-core assets of strategic
state-owned companies, which have started restructuring of their business and implementation
of corporate governance reform.
Infrastructure is a driver of Ukrainian economy, and its forthcoming reforms are crucial to build attractive
multi-modal system to reduce transportation costs, efficient international-standard transport services
and innovative approaches.
Approval of new Concession Legislation to facilitate private investments
in infrastructure development (the “Concessions Law”)
7. Forthcoming
infrastructure reforms

Introduction of independent transport regulator.
Currently, the Ministry of Infrastructure of Ukraine is the authority, which defines and ensures
development and implementation of state policy in transport sector by setting up tariffs and
regulation. On the other hand, the Ministry is also in charge of the management of state-
owned companies in the sector. To go in line with the best international practice and to avoid
potential conflict of interest, establishment of an independent regulator should be considered
in order to facilitate free access to infrastructure, promote competition and transparency, as
well as to elaborate transparent and fair tariffs in the market.
Reform of port tariffs and liberalization of ports services.
Regardless of the 20% reduction of the port charges starting from January 1st, 2018, the cost
of logistics in Ukraine is still higher by 30-40% compared with the same figures in France,
Germany and the USA. Development of new port charges methodology together with
liberalization of other port services, shall ensure sustainability of port operations in Ukraine.
Key pillars for such reforms are:
• Transparency and efficiency. The key objective of port pricing should be to minimize the
cost of trade for Ukraine rather than to profit the USPA. Business is looking forward for
the change of approach for the cost based tariffs and prioritization of usage of financial
resources generated from sea-port charges and duties to maintain and develop crucial
maritime infrastructure.
• Deregulation. The need to simplify the tariffs and remove duplication and lack of
transparency should be borne in mind during the consolidation the tariff schedule into a
smaller number of dues.
• Private sector involvement. Further cost reductions should be targeted for, by adopting
standard reforms, like privatization and concession, that will allow to minimize state
expenditures and to attract private investors with the mechanism of further compensation
of investments. Liberalization (denationalization) of tug and pilotage services in ports
will increase investment attractiveness, introduce competition, thus leading to quality
improvement and fair pricing.
Reform and modernization of National Railway Company “Ukrzaliznytsia”.
It is expected that Ukrzaliznytsia will be reformed in coming years with the key objective to
demonopolize railway sector. Draft of new “Law on Railway Transport” is being discussed in
the Parliament, and is aimed to create brand new model of railway transportation, including:
• Equal access to railway infrastructure to all the players, including private and public ones;
• New traffic security management system in accordance with the EU norms, that will
promote safety rules during the transportation of goods;
• Open access to rolling stock;
• Establishment of clear functions, responsibilities and powers of the infrastructure operator,
carriers, freight carriers, and owners of access roads; establishes the rules of interaction of
market participants;
• New tariff policy: tariff for rail infrastructure services are to be regulated by the independent
regulator and to include an investment component;
• Public service obligations (PSO): services provided on the request of public sector, will be
performed based on agreement between public and municipal authorities and carriers,
with a clear compensation mechanism in case of absence of cost recovery. PSO mechanism
is expected to eliminate cross-subsidies between freight and passenger services through
the introduction of a financial support mechanism.
7. Forthcoming

Implementation of transparent railcars e-distribution.
Shortage of wagon fleet, that is by 60% owned and operated by Ukrzaliznytsia, is recognized as
one of the key bottleneck for Ukrainian exporters. Ukrzaliznytsia is expected to ensure transparent
and equal distribution of wagon fleet without giving any preferences. Railcars e-distribution is
expected to unable “manual” intervention and to provide a clear distribution procedure and
criteria to meet forecasted industry needs, including seasonal high periods (August-December).
First pilot project on e-distribution of railcars through Prozorro Sale platform s is to be carried
out already in 2018.
Reform of legal framework governing river transportation and
infrastructure.
The Dnipro River offers a great opportunity to develop a low-cost, environment-friendly mode
of transport, allowing to move up to 20-30 million tons of commodities by river to the Black Sea
ports. Switching to river freight transportation will significantly improve logistics and decrease
railroad and road overloading on the main export routs going to Ukrainian sea ports. Draft
law on Inner water transport is currently considered in the Parliament, and is based on the
recommendations from leading business associations and public authorities. With the adoption
of the law, the inland logistics will:
• Get transparent and effective state regulation, considering economical and investment
benefits;
• Get a clear and sustainable source of financing of river infrastructure;
• Give free admission of vessels with international flag, and provide fair conditions for vessels
registration and classification;
• Provoke development of river ports and terminals;
• Create a solid mechanism for locks maintenance;
• Organize proper navigation on river routes and navigation safety control rules, etc.
With the adoption of Law on inner water transport, Ukraine will fulfill its obligations under
Association Agreement with EU and start full and sound integration of river waterways into international
logistic routs.
Improvement of corporate governance of state-owned companies
in the sector.
OECD corporate governance rules need to be implemented in major state-owned companies
in the sector: Ukrzaliznytsia, Ukrainian Sea Ports Authority, national post operator “Ukrposhta”,
Kyiv International Airport, Lviv International Airport, all sea ports and stevedoring companies,
Ukrainian Danube Shipping company. It will improve operational efficiency, transparency and
financial performance of the companies, as well as eliminate political influence on their day-to-
day operations replacing them with internationally acceptable business practice.
7. Forthcoming

Produced by the Office of the National Investment Council of Ukraine which
is supported by the European Bank for Reconstruction and Development
For any questions or comments please contact office@nicouncil.org.ua
This report has been prepared by the Office of the National Investment Council for information purposes only. Although the
information in this report comes from sources we believe to be reliable, and although we have made every effort to ensure
its accuracy at the time of publication, we make no warranty, express or implied, of this report's usefulness in predicting the
future performance. Nor should this report be regarded as a complete description of the macroeconomic situation and
markets regulation in Ukraine.
Office of the National Investment Council doesn’t do or seek to do business with companies covered in its research reports.
Any investment decision made on the basis of this report shall be made at the investor's sole discretion, and under no
circumstances shall Office of the National Investment Council or any of its employees or related parties be liable in any way
for any action, or failure to act, by any party, on the basis of this report.
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Source of photos: Depositphotos®

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