UKRAINIAN PARLIAMENT ADOPTS AMENDMENTS ON CONCESSIONS
FOR CONSTRUCTION AND OPERATION OF MOTOR ROADS" 

LEGAL ALERT: Baker & McKenzie-CIS Limited
Kyiv, Ukraine, Sat, Feb 7, 2009

KYIV - On 15 January 2009, the Ukrainian Parliament adopted Law of Ukraine No. 891-VI "On Amendments to the Law of Ukraine "On Concessions for the Construction and Operation of Motor Roads" (the "Law") which completely restates the earlier Law.  The Law was officially published on 31 January 2009, and it became effective as of the date of its official publication.

The Law introduces the following significant changes with respect to the construction (reconstruction, and repair) and the operation of general-purpose motor roads on terms of concessions.

1) The Law now establishes that decisions regarding the construction (reconstruction, and repair) and/or operation of general-purpose motor roads on terms of concessions, as well as regarding concession agreements, should be made by the State Service for Motor Roads of Ukraine (Ukravtodor);

2) The Law now provides for a two-stage concession tender.  On the first stage the bidders' qualifications are verified and on the second stage the bidders' proposals are evaluated.  According to the Law, the procedure for the concession tender will be adopted by the Cabinet of Ministers of Ukraine;

3) The Law now provides for the right of Ukravtodor to participate in the construction (reconstruction, and repair) of the object of the concession and to share the profits realized from the operation thereof;

4) The Law now specifies that concessioners of low-profit or unprofitable objects of concession have the right to state compensation which should be provided to them in accordance with the procedure adopted by the Cabinet of Ministers of Ukraine.  

It is expected that these amendments introduced by the Law will facilitate the attraction of foreign investors to Ukrainian projects related to the construction, reconstruction, and repair of general-purpose motor roads.

NOTES: For further information on the topic please contact Serhiy Piontkovsky, Partner at the Kyiv Office of Baker & McKenzie, by telephone (380 44 590 0101), facsimile (380 44 590 0110), or e-mail (kyiv_info@bakernet.com).  Baker & McKenzie - CIS, Limited. Renaissance Business Center, 24 Vorovskoho St., Kyiv 01054, Ukraine, Link: www.bakernet.com. LINK: http://bakerxchange.com/ve/ZZm8029Myj71y71R86
Baker & McKenzie - CIS, Limited is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

The LEGAL ALERT is issued to inform Baker & McKenzie clients and other interested parties of time-sensitive legal developments that may affect or otherwise be of special interest to them. The comments above do not constitute legal advice or opinion, and should not be regarded as a substitute for detailed advice in individual cases.