Toll roads in Ukraine: Who to pay for them?

Author : News Agency

Source : 112 Ukraine

The idea of toll roads in Ukraine continues to "haunt the minds" of the current government
10:32, 11 February 2021

Road traffic in Kyiv

At the beginning of January 2021, the Cabinet of Ministers approved the Procedure for free travel by roads built on a concession basis, as well as the amount of compensation for the concessionaire.

Simply put, according to the Minister of Infrastructure Vladyslav Krykliy, the document defines in which cases travel on roads can be free.

Free travel on concession roads is allowed to:

- vehicles belonging to individuals, individual entrepreneurs, legal entities of all forms of ownership, which are used in the event of a natural disaster, catastrophe, epidemic, epizootic during the period of their action on the basis of the appeal of these persons to the concessionaire;

- vehicles used by public authorities, units of the Ministry of Defense, State Border Service, National Guard, National Police, State Emergency Situations Service and ambulance under the conditions determined by the concessionaire in accordance with the concession agreement;

- additional categories of vehicles in accordance with the concession agreement.

The adopted document also provides for compensation to concessionaire for the period of free travel during a natural disaster, catastrophe, epidemic, etc.

What are concession roads?

A concession is the transfer of natural resources or objects belonging to a state or community for temporary use to individuals, other or foreign firms. In this case, the concessionaire assumes the obligation to create or manage the facility.

Related: EU sets conditions for providing Ukraine with second tranche of financial assistance

In 2018, the Verkhovna Rada adopted a law that provides for the construction of concession roads. What does this mean specifically in the case of Ukraine? The Minister of Infrastructure Vladyslav Krykliy explains:

  1. Ukraine plans to transfer six road sections to potential investors.
  2. We are talking about the roads: Kharkiv - Dnipro - Zaporizhya (M-29, M-04, M-18), Boryspil - Poltava (M-03), Kherson - Mykolayiv (M-14), Kyiv - Zhytomyr - Rivne ( M-06), Yagodin - Kovel - Lutsk (M-07, M-19), Dnipro - Kryvyy Rig - Mykolayiv (M-04, H11).

Krykliy clarified that these highways connect 10 regions of Ukraine and "more than 12 million residents will be able to experience the improvement of road infrastructure."

Toll roads. Nuances

"Roads will not be paid by citizens. The state will pay for the infrastructure, but in installments for 20-30 years," Krykliy said.

We are talking about the so-called budgetary relations in the implementation of contracts concluded within the framework of public-private partnerships (PPP), including concession contracts.

According to Krykliy, Ukraine wants to attract private investors to the road market. In particular, the document adopted by the government spelled out the opportunity to pay for infrastructure built with private investment in installments over 20-30 years. Payment will take place after the completion of the construction or reconstruction of the road and depend on its further quality maintenance.

"If the road is not maintained in accordance with the established standards, the payment to the investor from the state is reduced by the corresponding amount of fines, which is determined by the agreement," Krykliy stressed.

Related: Ukraine's auto industry is shrinking

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