Bold Highway Plans Unveiled

KIEV, Ukraine -- Ukrainian Transportation and Communications Minister Mykola Rudkovsky has come up with a bold $15-20 billion plan to build a new network of modern, intercity highways in an effort to replace archaic Soviet roadways that continue to serve as the country’s main transportation routes.

Transportation and Communications Minister Mykola Rudkovsky has unveiled a bold new plan to build brand new highways across Ukraine amid calls for his ouster in connection with his alleged interferance into the country’s foreign policy agenda
The plan is to construct up to 7,000 kilometers of mostly new highway alongside existing roads within seven years. Rudkovsky’s press service said negotiations on signing a final deal could be signed as early as March, adding that a consortium would be established, bringing in the backing of Western lenders and French construction giants.

Rudkovsky, who has fallen under political criticism as of late for his role in inviting controversial oppositionist politicians from Turkmenistan to Kyiv, said the project is being supported by Ukraine’s governing coalition leadership.

Yet, some insiders caution that basic details for the badly needed and widely publicized project are still caught up on the drawing board.

Rudkovsky’s press service said the Transportation Ministry has selected two leading French construction companies for the project: Vinci Construction and Bouygues Travaux Publics.

Both companies are expected to join major Western banks, such as CitiBank and Merrill Lynch, in financing the project.

Despite enduring budget constraints, Rudkovsky said Ukraine’s government could provide some funding for the project. The consortium, which has yet to be established, would according to Rudkovsky be granted concession rights for toll fees charged on the roads for about 25 years.

While exact details, including issuance of land rights, have yet to be worked out, Rudkovsky’s ministry said the project envisions construction of new highways that would connect western and eastern Ukrainian cities such as Lviv, Donetsk and Luhansk.

Another highway envisioned would stretch from the capital city of Kyiv to Vinnytsya, near Ukraine’s border with Moldova and Romania; and further west to Lviv.

A third highway would extend from the eastern city of Kharkiv to the port city of Odessa via Dnipropetrovsk, an industrial city located in the center of the country. Yet another highway would connect Kyiv with Crimea’s capital, Simferopol.

The planned new European-standard roadways represent only a tiny fraction of the nearly 170,000 kilometers of road existing in the country, but it is intended to cut down travel time and cost along popular transportation routes.

Obstacles ahead

Though expensive, building brand new highways under concession terms can benefit Ukraine by allowing it to save its own funding for repair and reconstruction work at existing roadways, Bouygues CEO Christian Gazaignes said at a Jan. 12 press conference in Kyiv. But on the flip side, this project’s size and cost are major risks, he added.

Pierre Berger, chairman of Vinci Construction’s department in charge of large projects, expressed concern that construction could face delays due to the lack of legislation in Ukraine regulating land ownership.

“We and our partners will have to assess the risks realistically and partially share them,” Berger said.

Officials at Vinci and Bouygues declined to provide further details. Vinci is also a member of a French consortium that is bidding to build a new sarcophagus intended to prevent radiation leaks at Ukraine’s defunct Chornobyl Nuclear Power Station.

Rudkovsky, a member of the Socialist Party, tried to calm fears about possible road blocks facing the project. The country’s governing coalition, also backed by Prime Minister Viktor Yanukovych’s Regions party and the Communists, would push legislation needed through the halls of parliament within several months, he said.

Oleksandr Romasyuk, a spokesman for Ukraine’s state roadway administration, Ukravtodor, said talks with the French construction companies have still not been held. So far, “Minister Rudkovsky is the only person who has talked to them,” he added.

Last November, the European Bank for Reconstruction and Development (EBRD) agreed to loan Ukraine 200 million euros for 15 years to back reconstruction of an existing highway connecting Kyiv with Hungary and Slovakia.

EBRD spokesperson Anton Usov said his bank would consider financing other road construction projects in Ukraine in the near future, but expressed reservations about massive projects of this kind masterminded by Ukraine’s Transportation Ministry.

Rudkovsky’s last days?

Transportation and Communication Minister Mykola Rudkovsky has been under pressure to step down in recent weeks after using his position in office to pressure Ukraine’s diplomatic core into allowing oppositionists from Turkmenistan into the country.

The oppositionists visited Kyiv in late December to give a press conference in connection with the battle for control of leadership in their country after the unexpected death of long-time Turkmen leader Saparamut Niyazov.

Ukraine’s Presidential Secretariat has called for Rudkovsky’s ouster, arguing that his move damaged bilateral relations with Turkmenistan, Ukraine’s key source of natural gas imports.

Source: Kyiv Post