Representatives of leading industries and the agricultural sector, in order to solve the problem of deteriorating competitiveness compared to other manufacturers in the world market, have proposed that the Cabinet of Ministers of Ukraine reduces port charges in the country by 20%.

The proposal is outlined in a letter of the sectoral managers to Prime Minister Denys Shmyhal dated April 22, 2020.

Among the signatories of the letter are Chairman of the Federation of Metallurgists of Ukraine Serhiy Bilenky, President of Ukrmetalurgprom Oleksandr Kalenkov, President of the Ukrainian Grain Association Mykola Horbachov, President of the Union of Chemists of Ukraine Oleksiy Holubov, Head of the Federation of Employers of the Fuel and Energy Complex of Ukraine Anatoliy Tatarynov, Executive Director of the Ukrainian association of producers of ferroalloys and other electrometallurgy products of UkrFA Serhiy Kudriavtsev, and Vice President of the National Glass Association Volodymyr Tsvetov.

"Domestic shippers and consignees faced the complete lack of competitiveness of Ukrainian ports, first of all, due to the too high level of port charges. Services of Ukrainian ports are two or four times more expensive than Chinese, Brazilian, Romanian, and others. Thus, the cost of a call to the Pivdenny port for a Handymax ship is two times higher than the average cost for the ports of the Black Sea, and almost three or four times higher than in competing ports such as Hay Point in Australia, Vancouver in Canada, and Tubarao in Brazil," the signatories said in the letter.

Due to the fact that in Ukrainian ports the level of charges is officially set in the U.S. dollars, unlike the ports of other countries (Australia, China, and other countries), a Ukrainian manufacturer has an extra financial burden.

In addition, the signatories said that the revenues of state-owned enterprise (SOE) Ukrainian Sea Ports Authority from port charges are not sent to the development and modernization of infrastructure.

"Within 2014-2018, only 23% of the collected port charges were used for investments, the rest was provided for fiscal purposes. Some 90% of the net profit of the Ukrainian Sea Ports Authority was sent to the national budget in the form of dividends. During 2014-2018, more than 50% of the collected port charges were channeled to the national budget in the form of income tax and dividends," the managers said in the letter.

Such a situation, according to the sectoral managers, led to negative consequences, in particular, removing of investment resources from export-oriented industries, deterioration of their competitiveness in comparison with other manufacturers in the global market.

"Thus, one of the most promising areas to solve the problems seen in Ukrainian seaports is to immediately reduce the existing level of port charges. The potential for further reduction in port charges remains at 40%," the managers said in the letter.