UKRAINE: Support for the Ukraine Roads Program
PPIAF supported the government of Ukraine in the establishment of a roads asset management model under a Program that includes potential road user charging models and enabling environment requirements. Alongside the Global Infrastructure Facility and the IFC, PPIAF supported the government of Ukraine to develop an approach to upgrade and repair its roads quickly by:
▪ Identifying a business model for the funding, operation, and maintenance of the core road network operated by Ukravtodor
▪ Analyzing potential revenue sources for the core road network and evaluate contracting models that align with Ukraine's legal and regulatory framework
▪ Identifying priority projects that can be delivered with private finance and testing the viability of combinations of projects and revenue (funding sources).
The analysis carried out under the PPIAF component looked at the enabling environment suitability for the possible Road Fund model alternatives that the government of Ukraine could implement in its quest to mobilize private finance to rehabilitate, upgrade, and maintain its core road network. Throughout the analysis six pilot projects were identified as suitable, and the recommendation for the Road Fund would be to take a programmatic approach that would provide predictability in a solid pipeline and show the government's commitment to private sector investors and construction companies alike. The programmatic business model would ultimately enable Ukraine to select, prioritize, and fund investments in its roads sector. Although Ukraine is well suitable for this business model for the road fund due to the existence of revenue sources that already provide capital for the Road Fund, and a recently passed PPP law that is sound and suitable for such an endeavor, there still remains some work to be done on finding more sources of revenues that cover the costs needed for the network and as well putting in place the capacity and capability of managing the Road Fund which will be an independent agency.