UKRAINIAN INFRASTRUCTURE: Boosting Ukraine’s connectivity is crucial for economic growth

American Chamber of Commerce in Ukraine launches new Infrastructure Committee to help boost sector improvements

UKRAINIAN INFRASTRUCTURE: Boosting Ukraine’s connectivity is crucial for economic growth
About the author: Andy Hunder is the President of the American Chamber of Commerce in Ukraine
Andy Hunder
Monday, 15 May 2017 14:35

The need for infrastructure development is one of the greatest global challenges of our time. Running a successful business when there are no roads, or no railways, or even no Internet, is outright impossible. Business is all about connectivity. Infrastructure is equal to connectivity in the modern world – roads, railways, ports and transport are crucial for the economic development and growth. Good infrastructure is essential to make trade and commerce flourish.

Ukraine is no exception: infrastructure serves industry that, in its turn, contributes to better economic output. Taking into account the existing challenges in infrastructure that business is facing, the Infrastructure Committee of the American Chamber of Commerce in Ukraine has developed guidelines vital to boost efficiency.


Infrastructure Roadmap for Ukraine

The adoption of financial plans for state-owned enterprises (SOEs) and compensation of investments in strategic infrastructure projects should be among the primary steps to fortify Ukraine’s infrastructure potential.

Adopting the financial plans of the SOEs is central. Business needs clear, deliverable timetables for the realization of major infrastructure projects. We at AmCham Ukraine have stressed the importance of adopting these financial plans. This will help to avoid surprises, assuring in perspective the proper implementation of capital investments.

Compensation of investments in strategic infrastructural objects is vital for increasing the competitiveness of the country’s seaports. A clear procedure of investment compensation is currently in development prior to adoption by the Resolution of the Cabinet of Ministers.


Railway Reform

According to a 2016 survey conducted among Members of the American Chamber of Commerce in Ukraine on the effectiveness of Ukrainian Railway activities, 54% of respondents believe that conditions in the railway freight transportation sphere deteriorated during the course of the past calendar year. Ukrainian Railway reform priorities were identified as the fight against corruption (84% of respondents), change of railway tariff setting system and methodology (55%), elaboration of a new comprehensive strategy for the development of rail transport (42%), and formation of an independent body to govern railway tariffs (39%).

In response to the majority opinion that the situation in the sphere of railway cargo transportation has worsened, AmCham member companies have developed a number of proposals. These include ensuring a transparent mechanism for railcar distribution, taking into account seasonal peak loads on rail transport, and initiating public discussion of plans for the implementation of capital investments. At the same time, an effective dialogue with the business community should remain one of the main instruments of cooperation to address pressing issues in the railway sphere.


Accelerating Ukraine’s Infrastructure Development

As infrastructure development is a key component for sustainable growth of all sectors of the economy, in 2017 that Chamber launched a new Infrastructure Committee. Its main goal is to assure effective cooperation between business and state regulatory bodies, in order to improve the state’s regulatory function and harmonize the respective national legislation with European standards.

Both business and the government are interested in increasing the competitiveness of Ukraine’s infrastructure sphere. In this regard, further improvement of the sphere is possible through active and constructive dialogue between state officials and the business community.

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