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A Green Paper produced by the Better Regulation Delivery Office, with the support of the EU4Business FORBIZ project, on regulation of inland waterways and the implications for development of cargo traffic.

The report estimates the inland waterways transport market at 6.5 million tonnes per year with growing volumes of traffic, mainly due to the recovery in demand for transport of grain and metal following a sustained drop in freight volumes since 2005. At the same time, the market has the potential for three-fold growth by 2020 and five-fold growth by 2035.

The main driver for this market is the growth of grain and metal exports from central Ukraine, in particular transportation of feedstocks to the Black Sea ports. The main constraints for market growth are: the high cost of transportation to the river and transhipment, the non-competitive price of waterway transportation in comparison with the railway (for most locations), the high capital costs for the acquisition or construction of the fleet, the low potential number of runs and slow vessel rotation due to infrastructure restrictions – lack of guaranteed depths, risk of accidents at the locks, etc.

The BRDO says the inland waterway infrastructure is suffering from chronic underfunding, especially of the locks on the Dnieper River. Due to the lack of dredging, the length of the shipping routes since 1990 has fallen from 4,000km to 1,600km. Under-developed infrastructure reduces the investment appeal of the river freight industry.

Current regulation of the inland waterway freight market does not fully meet the requirements of the Association Agreement between Ukraine and the EU. The agreement binds Ukraine to implement six core directives in the field of inland waterway transportation. Most of the measures have implementation periods from 3 to 5 years after the Agreement comes into effect.

The Better Regulation Delivery Office, together with the Ministry for Economic Development and Trade and the State Regulatory Service of Ukraine, with the support of the FORBIZ project, has launched the ProDialogue under the EU4Business initiative. It aims to involve all stakeholders in reviewing regulatory solutions and working out ways to address them. As a result, a series of Green Papers has been developed, which analyse the current state of market issues and potential ways to improve the regulatory environment. A further set of White Papers represents a consolidated product of the groundwork by the business community and expert environment in the form of practical recommendations and suggestions for the authorities in order to improve the regulatory framework.

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