Ukraine’s vast road, rail, air and sea infrastructure, together with the benefits of its geographic location, makes the country an important transit corridor for trade and travel between Europe, Asia and the Middle East.
The transportation sector is the most developed and extensively utilized of all infrastructure assets. By European standards the transportation sector is a huge conglomerate which encompasses a diverse aggregate of railway networks, roads, seaports and airport facilities, together with their supporting services.
Ukraine’s rail network is managed by “Ukrzaliznytsia” and is one of the most extensive in Europe with a combined total length of over 22 thousand km, of which 45% is electrified. On an annual basis, the rail network handles over 80% of the nation’s freight and 50% of the passenger traffic crisscrossing the country.
By carriage volume, the Ukrainian rail network is the 14th largest in the world, the world’s 6th largest rail passenger transporter and the world’s 7th largest freight transporter.
Ukraine’s rail network is fully integrated with the networks of neighboring countries of Belarus, Moldova, Poland, Romania, Slovakia, Hungary and the Russian Federation. The network also co-manages 40 international border crossings and services 13 sea ports in the Black Sea basin.
Ukraine has an extensive highway network of over 170,000 km which cover the whole territory of Ukraine; this and includes four international corridors which pass through the country and serve as important transport routes for both freight and passenger traffic.
In recent years there has been a noticeable improvement in this sector; state policy focused more attention on the country’s infrastructure and successfully mobilized the resources of international agencies and the cooperation of foreign countries to bring new investments to the highway network.
The current policy on renewing the country’s highway network is outlined in the ‘Ukraine 2020 Transportation Strategy’. The strategy sets out the necessary legislative goals and sector reforms needed to bring Ukraine’s road network up to European standards.
State policy is now focused on fostering a competitive market in highway construction which is stimulating the implementation of new public-private partnership projects. This latest initiative provides new opportunities for foreign investment which will not only have a long term impact on renewing necessary highway infrastructure, but will significantly contribute to the country’s economic revival as well.
Ukraine’s maritime transport sector is a multi-functional complex of river and seaports together with the supporting infrastructure that serve Ukraine’s export/import sector. A competitive advantage for Ukraine is that all of the country’s ports along the Back Sea coastline are warm water ports which provide year round access to the Mediterranean and the Atlantic ocean.
Ukraine’s seaports were originally designed to support the country’s traditional exports of ferrous metals, coal, iron ore and grain. The infrastructure supporting this capacity has aged but provides significant opportunity for investment and redevelopment; the introduction of technological upgrades to service Ukraine’s increasingly diverse import/export requirements is another investment opportunity.
Ukraine is currently undertaking a broad range of initiatives to improve its maritime infrastructure by focusing on improving its legal and regulatory environment, improving port management systems and creating an open market between domestic seaports.
With the assistance of international donors and the private sector the government is embarking on a parallel program of providing increased training for port personnel, introducing modern technologies for loading and unloading together with the privatization of certain port facilities. Investors from Europe, the Middle East and North America currently show considerable interest in the opportunities that Ukraine’s maritime sector has to offer.
Ukraine has 23 major airports (19 government owned) with 12 carrying the designation of international and offering regularly scheduled flights for commercial airlines. Major redevelopment occurred in 2012 when Ukraine upgraded and/or built new international airports in Kyiv, Lviv, Kharkiv and Donetsk.
However given the size and the population of the country the air transport sector of Ukraine continues to remain underdeveloped and an opportunity for investment.
In 2015 Ukraine signed an Open Skies agreement with the USA and a similar one with the EU is expected to come into force in 2017. This provides an additional impetus for the government to implement its ambitious program of airport upgrades and expansion throughout the country.
Ukraine’s immediate reform targets for this sector include (i) harmonizing legislation and technical regulations to European standards (ii) creating a competitive market environment for both domestic and foreign carriers, and (iii) developing a regional program of reconstruction of regional airports. Private sector investment and public-private partnerships are expected to drive the majority of such redevelopment.