Investments in Transport Infrastructure as a ‘Driver’ of Ukraine’s Economic Revival after the War, Denys Kostrzhevskyi

0
355

History and Development of Transport Corridors in Ukraine until 2022

Transport infrastructure is a critical element of any national economy. In Ukraine, with its strategic geographical position at the intersection of Europe and Asia, transport corridors have always played a key role. 

Even the very formation of Ukraine as a state (Principality of Kiev) more than 1,500 years ago, was due to the existence of one of the first transport corridors known to historians Route from the Varangians to the Greeks

It is known that this corridor ran from north to south along the Dnieper River. Until 2014, modern Ukraine was also an integral part of several global transport corridors that ensured the efficient movement of goods between the European Union, Russia, and further to Asia.

The Eurasian Transport Network was one of the most important routes passing through Ukraine. This corridor provided transport links between Western Europe and Central Asian countries such as Kazakhstan and China. 

Before the war starts in 2014, there were several ambitious plans to modernise this corridor, in particular, to renovait railway lines, construct new highways, and develop seaports on the Black Sea. 

According to the Ministry of Infrastructure of Ukraine, in 2013 alone, more than 50 million tons of cargo passed through Ukrainian territory, which indicates the importance of this infrastructure.

The One Belt, One Road project also included Ukraine as a key transit country. This Chinese infrastructure mega-project aimed to create new routes for the transportation of goods between China and Europe. 

Ukraine with its seaports such as Odesa and Illichivsk was an important component of this global plan. By 2022, a significant expansion of port infrastructure and modernisation of railways was planned to increase capacity.

In the context of integration with the European Union, the TEN-T European Transport Network included Ukraine as part of its extended plans. It was supposed to integrate Ukrainian transport routes with European ones to facilitate the movement of goods and people. Plans included the modernisation of major highways and railways, as well as the development of aviation infrastructure.

Prior to the outbreak of the war in 2014, investments in transport infrastructure amounted to more than $10 billion, with the main focus on the modernisation of existing networks and the development of new projects. However, Russia’s annexation of Crimea and the outbreak of hostilities in the Donbas have radically changed these plans.

Impact of the War on Transport Infrastructure and New Challenges

Since the beginning of Russia’s full-scale invasion of Ukraine in 2022, the situation with transport infrastructure has undergone dramatic changes. The destruction of infrastructure in regions where active hostilities took place made it much more difficult to transport goods and people. 

All major transport corridors, including railways, roads, and ports, were partially or completely destroyed. The airspace over Ukraine is closed. 

The railway infrastructure, which was an important part of the Euro-Asian corridor before the war, suffered significant losses. 

Damage to, and destruction of, railways, bridges, and stations made transportation difficult or impossible in many regions even inside the country. 

For example, the railway bridge across the Dnieper in Zaporizhzhia, which was an important element of the transport corridor, was destroyed during the hostilities, which made direct railway communication between the eastern and western regions of Ukraine impossible.

Seaports were also affected by the blockade and shelling. In particular, the port of Mariupol, which was an important transport hub on the Sea of Azov before the war, is now occupied, destroyed, and inaccessible for the transportation of goods. 

The Black Sea ports and their infrastructure, including berths, warehouses, and railway accesses, were destroyed or damaged by shelling and combat operations. This made it difficult or even impossible to transship cargo. This significantly affected Ukraine’s ability to export products and reduced its economic opportunities.

Roads that previously ensured the rapid movement of goods between different regions of Ukraine and neighbouring countries have suffered significant damage. The destruction of bridges, roads, and tunnels not only complicated logistics, but also increased transportation costs, which negatively affected the competitiveness of Ukrainian goods in international markets.

Aviation infrastructure has suffered extensive damage. Airports, especially in active combat zones, were closed or damaged. Runways were ruined, air navigation equipment was destroyed. The restoration of aviation infrastructure requires significant investments in the repair and modernisation of runways, terminals, and ancillary services.

New Vectors of Transport Infrastructure Development

After the war, Ukraine will face the challenge of rethinking and strategic reorientation of its transport infrastructure, taking into account new geopolitical and economic realities. It is important to understand that it is not only about restoring the destroyed transport infrastructure, but about its complete reconstruction on the basis of a new strategy and in the conditions of new realities that will develop after the end of hostilities. 

Transport corridors, previously focused on links with Russia and the CIS countries, require the development of alternative routes that will strengthen ties with the European Union and ensure the stable transit of goods between Europe and Asia.

Ukraine, with its unique geographical location, can become a key transport hub connecting the East and the West, as well as the North and the South. This will require not only the restoration of destroyed infrastructure, but also investment in the creation of new transport corridors that meet modern logistics requirements.

North–South

A potential direction is the creation of a corridor linking the Baltic Sea with the Black Sea. 

This ancient, millennial route may include the modernisation of railways and highways connecting Ukraine with Poland, the Baltic countries, and the Scandinavian states. 

For example, the expansion and modernisation of the Odesa–Gdańsk railway corridor will ensure efficient transit between the ports of the Baltic and Black Seas, facilitating the integration of Ukrainian logistics into the European one.

Trans-Caspian Transport Corridor 

The development of infrastructure linking Ukraine through the Black Sea with the Caucasus and further with the countries of Central Asia and China through the Trans-Caspian corridor is another promising direction. 

The inclusion of Ukraine in this corridor through Odesa, Chornomorsk, and Pivdennyi ports will help create an effective route for the transportation of goods from Asia to Europe through the Caspian Sea.

Danube Transport Corridor

The use of the potential of the Danube River and the development of the Danube ports of Ukraine, such as Izmail and Reni, can be an effective way to integrate into the European transport system. This will provide not only alternative routes for the export of products, but also allow the use of waterways for the delivery of goods deep into Europe.

Development of aviation infrastructure 

Reconstruction and modernisation of Ukrainian airports, such as Kyiv, Boryspil, Lviv, Odesa, and the creation of new aviation hubs in the west of the country, will ensure effective air links with the EU and other regions. 

This includes investments in technological re-equipment, reconstruction of airfields, including runways, construction of new terminals, development of cargo aviation, and creation of modern logistics centres serving international cargo flows.

Creating New Jobs

The reconstruction and development of transport infrastructure after the war will not only open up new economic opportunities, but also create thousands of new jobs. 

A significant number of specialists, including engineers, builders, technicians, and logisticians will be involved in the process of construction and modernisation of railways, roads, ports, and airports. 

In addition, the functioning of the new transport infrastructure will require maintenance personnel, operators, and managers, which will increase employment and improve the skills of the workforce. This will contribute not only to economic revival, but also to the social development of the country.

International Support and Cooperation

The implementation of these projects requires joint efforts with European and international partners. The European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), as well as the European Union, have already expressed their readiness to support reconstruction and modernisation projects. 

The integration of Ukrainian transport corridors into the TEN-T system will connect Ukrainian routes with European ones and facilitate the movement of goods and people between Ukraine and Europe. This involves the modernisation of existing and the construction of new transport hubs that meet European standards.

Given these new vectors and geographical advantages of Ukraine, with new investments in transport infrastructure, Ukraine will become an important transit centre that will ensure the rapid and efficient movement of goods between continents. 

This includes the development of container terminals and logistics centres that will be able to handle large volumes of cargo and ensure their efficient distribution. Therefore, investments in the transport infrastructure of Ukraine will become a key element of its economic revival after the war. This will not only ensure the restoration of destroyed routes, but also create new opportunities for economic growth and integration into the global economy.

“I am convinced that the development and implementation of Ukraine’s transit potential will become one of the main driving factors in the restoration and strengthening of the Ukrainian economy after the victory,” concluded Denys Kostrzhevskyi.

Denys Kostrzhevskyi, Chairman of the Board of Directors of Kyiv International Airport and Co-founder of the European Facilitation Platform (EFP).