Parliament passes bill regulating concession construction of roads

The Verkhovna Rada of Ukraine has settled the issue of construction of new roads in Ukraine on the concession conditions.

A total of 233 lawmakers backed bill No. 6766 at second reading on Tuesday.

According to the explanatory note to the document, concession roads are roads of higher quality, which meet high standards, since the main thing for the users of these roads will be the quality and speed of traffic. These roads are built to cut and straighten the route bypassing populated areas and connect the two towns directly, reducing the route by 50-100 km, resulting in a reduction in fuel costs and time savings.

Meanwhile, the law of Ukraine on concessions for the construction and operation of roads indicates that the decision on the construction and/or operation of roads on concession terms is taken by the Cabinet of Ministers of Ukraine on the basis of a feasibility study, but it is not determined what exactly should be mentioned in this decision. In addition, the law does not provide for the concessionaire to compensate for failure to reach the actual traffic intensity and when income is not received.

"It is also worth noting that the mechanism for allocating land for the construction, operation and maintenance of highways has not been clearly regulated," the explanatory note stated.

Thus, the bill in particular provides: roads of general use of state importance can be transferred for the construction and operation on concession terms; after making a decision on the construction and operation of highways that can be provided for concession, the executive authorities are prohibited from taking any actions with land parcels foreseen for the construction and operation of these highways for use and/or ownership of citizens or legal entities.

According to the document, the decision on holding a concession tender is taken by the Ukrainian government, which, inter alia, specifies the technical parameters of the highway, the basic financial indicators for granting the road to the concession, the deadline for which the concession is granted, the maximum amount of compensation to the concessionaire and the alternative route which can be taken free of charge.

The Cabinet of Ministers also determines the largest amount of a flat toll for using motor roads built on the terms of concession, which is paid taking into account the level of inflation and the conditions under which the concession award is made to the concessionaire.

Concession payments are sent to the national budget of Ukraine.