Inland water transport is a viable alternative or addition to road and rail transport on European corridors.

Though environmentally-friendly and, frequently, the most economical mode of inland transport, it remains largely under-exploited in Ukraine.

Ukraine has a widespread network of inland waterways with the Dnipro river crossing the whole country from the North to the South going to the Black Sea and being a nationally and internationally important way of freight transportation. In spite of having such significant waterways resources, Ukraine uses only 8% of their total capacity due to poor infrastructure. As a consequence, the freight market in Ukraine is inefficiently and ineffectively utilized and thus there is much potential for improvement.

A sustainable Reform

A sustainable reform of the inland water transport has been identified as a key priority under
the country’s transport strategy, which, amongst other crucial sectors, promotes cooperation in
transport management and infrastructure development.

Ukrainian version of the document is available here: https://mtu.gov.ua/files/projects/str.html

How to make transport flow in Ukraine? Find out more here

IWT in Ukraine
km
Ukraine has of potential inland waterways
%
But actually uses less than 10% of its river freight transport capacity
%
With inland waterways accounting for less than 1% of total freight traffic, compared to and average of 7% in the EU

What is the current status of Inland Waterway Transport in Ukraine?

Ukraine has a very extended inland waterway network. The Dnipro is the biggest and the most important river and should be considered a national treasure of Ukraine. The river is used for transportation of goods and people but also has a variety of other functions. Via the hydropower stations, energy is generated, it is also a water source for people and the agricultural sector and of course, the river is used for leisure activities like swimming, fishing and sailing.

Given the multiple users of the river, the most important aspects of the reforms in IWT are to organize the public management of the river system (who is responsible for what) and to secure finance for the maintenance of and investments in public inland waterway transport infrastructure, like fairways and ship locks. Another important objective of the reforms is that it should promote river transport and enable a shift of freight transport from road to inland waterway transport, being a cost-efficient and environmental-friendly mode of transport.

These reforms are to be materialized in first instance with a dedicated law for inland waterway transport, which is already over 10 years under discussion in the Verkhovna Rada.

On the 4th of December 2020, the Verkhovna Rada adopted the Law on Inland Waterway Transport 1054-IX.

Why a legislative reform of the IWT sector is necessary?

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In order to develop inland waterways infrastructure that is not only among the best in the world but best for Ukraine, a sustainable legislative framework should be a key driver for the inland waterway transport reform in Ukraine, in addition to the liberalization of the market and favourable conditions for private investors.

Key steps for the IWT legislative reform:

  • Market access: realistic; liberal regime, based on compliance with applicable standards (maritime and inland shipping); compliant with EU-legislation; de facto access for EU-certified inland and maritime vessels;
  • Deck crew members and vessels; transport of dangerous goods: according to EU-standards; EU-certificates recognized in Ukraine;
  • Rules for navigation (navigation requirements): will be based on UNECE (CEVNI) and Danube Commission (DFND) recommendations;
  • Various EU standards (professional competence of operators; principles for contracting and pricing): compliant with EU-legislation;
  • Administrative procedures deck crew members, vessels: in line with EU-regulations;

Although the law represents an essential step towards a relaunch of inland navigation in Ukraine, further political and administrative initiatives are necessary to provide this transport mode with optimal framework conditions for increasing its market share.

  • River Information Services implementation:
    legal aspects generally compliant;
    praxis: basic facilities operative ;
    however, further investments are necessary;
  • Inland waterway maintenance: normalized network (fairway dimensions), basic legal provision foreseen in the draft law;
    however: institutional assignment and operational procedures of maintenance activity, including environmental assessment, to be detailed and further aligned with EU-environmental standards (water framework directive and others);
  • Miscellaneous provisions for shipping (pleasure craft; pilotage; emergency and salvage; liability): concern provisions based on national practice and tradition;
    aspect: pilotage for inland navigation; obligatory pilotage to be excluded for inland navigation;
  • Institutional: assignments of competences (MIU; MARAD): unprecise and partially
    overlapping; still open-ended provision on river maintenance;
  • Funding river maintenance and development: open-ended provision on the Inland Waterway State Fund and its funding to be clarified;
  • Tariff policy on IWT: scattered provisions, partially of only declaratory character (port dues);
  • Dedicated IWT-agency for infrastructure maintenance, traffic facilitation (RIS and suprastructure) and market development, essential element for the future governance of the river system.

What are the benefits of a sustainable reform of IWT?

With a viable inland water transport sector, Ukraine may dispose of a highly efficient transport mode, requiring hardly investments in infrastructure; in a very short period of time, free capacities of the Ukrainian river system, comprising river ports, terminals and viable connections to intercontinental trade via the seaports, may be added to the saturated and costly infrastructure networks of rail and road.

In particular the industries and the agricultural sector will profit from the opportunities offered by the inland waterway transport. But we should not forget the shipbuilding industry as well, Ukraine had a long-standing experience in this area, whereas today it has hardly a versatile inland navigation fleet; the country is best placed to build its own and new fleet.

Apart from a reinforced economy and improved competitive position of Ukraine in the markets where the country should realize its profits, the citizens will remark the return of the river system in their environment for recreation and pleasure, whereas the modern focus on this system will certainly contribute to greater awareness of the ecological value of the river basins.

Most importantly - a legal and regulative reform based on EU standards will enable investments in fleet and terminals, improve transparency and contribute to level playing field for the economic actors; moreover, the alignment to European standards and good practices will lead to synergies on market development and integration of technology for the inland waterways.

What is the EU support for the development of IWT in Ukraine?

In order to support the Ukrainian authorities to implement the inland waterway reform in Ukraine, the European Commission launched in January 2019 the “Assistance for Dnipro Transport Development” project focusing on:

  • Improving the legal and regulative framework required for reforming
    the inland waterway transport in relation to the EU-Ukraine Association Agreement;
  • Strengthening the capacity of the Ministry of Infrastructure and related institutions due to improve the safety, efficiency and effectiveness of the IWT sector in Ukraine.
  • Developing a comprehensive IWT plan for the Dnipro River.