Ukraine’s government unveils $5b logistics plan for road, rail, ports

6 Jul 2022 | Tim Worledge

Ukraine’s minister for infrastructure has unveiled an integrated road, rail and port strategy alongside a plea for international investment in order to boost the country’s grains and oilseeds exports and counter the impact of the ongoing Russian invasion of the country.

In details provided by the minister, Oleksandr Kubrakov, improvements to road, rail and border checkpoints would focus on building new connections towards the EU borders and down to the Danube ports – Ukraine’s last option for seaborne exports – and likely cost up to $5 billion.

“Now our budget is almost 100% focused on the needs of the military and social benefits. Obviously, in such conditions, state resources for the restoration and improvement of logistics are not enough,” Kubrakov said, in a call for private investment to help reshape Ukraine’s logistics landscape.

The government is expecting work to be undertaken between 2022 through to 2025 and will add three new road checkpoints on the border with Hungary and Romania, alongside new and upgraded rail links.

The rail connections alone are costed at $1.5 billion, with a comprehensive road improvement plan likely to weigh in at $2.7 billion.

“If Ukrainian business and the state receive the support of international partners, we will be able to expand the window for exports, imports, and humanitarian assistance. The economic security of not only Ukraine, but the whole world is under threat,” Kubrakov said.

In conjunction with the EU, the package is expected to capitalise on an agreement with 12 EU countries on the free passage of trucks and should deliver two new rail routes into ports like Reni and Izmail in the extreme south of the country.

With Russian naval forces dominating the Black Sea, and actively occupying some Ukrainian port capacity, the Danube and ports like Izmail have provided a vital lifeline to allow some volumes of supply to get out to meet export demand.

However, with the capacity so sorely limited, the facilities have quickly become overwhelmed by the huge potential export demand leading to long queues and significant delays.

The documents also provide figures for Ukraine’s current export capacity, with the main border checkpoints able to cope with 4,847 trucks per day, and 2,125 rail wagons, with negotiations underway to construct additional rail trans-shipment terminals on the border with the EU.

For a further $200 million, works to dredge the Ukrainian ports along the Danube, construct an inland waterways fleet and boost trans-shipment capacity at Izmail, Reni and Ust’-Dunaysk.

“The goal is to increase the capacity of Danube ports by 1.7 times to 25 million mt per year,” an accompanying presentation said.