The first issue was the results of the work of the State Customs Service in 2024 (spoiler - the customs service administered about UAH 530 billion in customs payments in 2024, 130 billion more by 2023). The customs IT strategy until 2028 was approved, and representatives of the State Customs Service are also working on Chapter 29 "Customs Union" for integration into the EU without customs barriers. By the summer, we expect a competition to elect a new head of the State Customs Service by a commission with the participation of international partners. This is of course if the Constitutional Court does not recognize this procedure for selecting senior staff of state bodies as unconstitutional. We are closely monitoring, there will be a competition - we will ensure public control.
What can stand in the way of good initiatives? Lack of funds. It is precisely because of this that there is a threat to the further development of IT customs. There will be no modern and secure IT systems - there will be no data exchange with EU countries. Lack of funds for normal salaries may also cause an outflow of qualified personnel, because the budget for 2025 does not provide sufficient funding for customs bodies.
The second question is Galina Vdovina about the Report of the Public Council. By the way, did you know that the Public Council includes 38 members delegated by specialized associations and business unions?
Detailed representative composition in the photo.
What did we do last year?
We held 4 large meetings of the Public Council, 8 meetings with business based on the leading customs offices of Ukraine, namely Odessa, Kyiv and Lviv, worked in the committees of the Public Council - proposals for legislation, consideration of complaints and appeals of business, work in working groups of the relevant Committee of the Verkhovna Rada and the Ministry of Finance Oleksandr Lazariev, Viktor Berestenko, Irina Sargsian, Petro Stetsenko, Serhiy Trusov, ILya Zibnicky, Andrii Bogomolov, Borys Kormych, Igor Muratov
Here are just some of the issues we dealt with
regarding the administrative reform of the State Customs Service,
provided for by the National Revenue Strategy;
regarding the specifics of the practical implementation of post-customs control;
regarding the measures of the State Customs Service implemented this year, in the field of international cooperation, towards strengthening the institutional capacity of the State Customs Service and further European integration;
regarding the status of the practical implementation of the Anti-Corruption Program;
on preparation for the second reading of the draft law "On Amendments to the Customs Code of Ukraine regarding the implementation of certain provisions of the Customs Code of the European Union": an explanatory campaign, thematic seminars for business, intensification of the preparation of by-laws;
on the features of the implementation of the Law of Ukraine "On Amendments to the
Customs Code of Ukraine regarding the establishment of the features of
passing service in customs authorities and conducting certification
of officials of customs authorities" dated 17.09.2024 No. 3977 - IX;
What's next:
A lot of work has been planned for 2025 again:
field meetings in Chernivtsi, Volyn, Zakarpattia, Ivano-Frankivsk customs offices, visits to individual customs posts of Lviv customs, expert work on the draft of the new Customs Code, protection of the rights of honest business in the process of customs clearance.
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Strategy for the Development of Border Infrastructure until 2030. What does the document provide for?
The Central Transport Committee has already analyzed what the National Transport Strategy of Ukraine provides for for the period until 2030, accompanying the publications with expert comments. We talked about what steps the government and the transport industry leadership plan regarding road transportation, railways, ports and urban mobility. And the First Deputy Chairman of the Verkhovna Rada Committee on Transport and Infrastructure joined the discussion and expressed her thoughts on what the Strategy lacked.
However, it is worth mentioning that along with this document, the Cabinet of Ministers at the end of December 2024 also approved the Strategy for the Development and Expansion of Border Infrastructure with the European Union Countries and the Republic of Moldova until 2030.
So, continuing the publication cycle, today we are talking about how they plan to update the checkpoints, who will be responsible for the reconstruction of existing border infrastructure facilities and the construction of new ones, and where they intend to get the funds for all this.
"Bottlenecks" on the border
After February 2022, a significant part of international transportation in Ukraine is carried out by rail and road transport through EU countries. Since then, as the authors of the document note, the transport flow has exceeded the design characteristics of the checkpoints.
As of May 2024, the passage of persons and vehicles across the state border was carried out at 41 checkpoints for road traffic. In a regional breakdown, it looks like this: Poland - 8 points, Slovakia - 2, Hungary - 5, Romania - 5, Moldova - 21 points.
As of July 2024, 16 border crossing points were operational for rail transport: 5 each with Poland and Moldova and 2 each with Slovakia, Hungary and Romania. In general, the volume of rail transport between Ukraine and the EU increased significantly during 2021-2023. If we take the Ukrainian-Polish section of the border, imports increased 2.1 times, exports 1.3 times. On the Ukrainian-Romanian section of the border, imports increased 60 times, and exports 1.8 times.
Big plans
The Strategy for the Development and Expansion of Border Infrastructure with the European Union and the Republic of Moldova until 2030 (hereinafter referred to as the Strategy) declares a plan and financial prospects for such development and covers road and railway infrastructure facilities. It provides for the development and expansion of the state border crossing points themselves, as well as access roads to them. When it comes to railway junctions, they include the development of border stations and transfer stations with a complex of buildings, structures and technical equipment, traction substations, a contact network, etc.
The Strategy also highlights such an area of work as the development of service zones. These are territories in front of the border crossing point for automobile traffic, where services such as food, medical care, trade, insurance, accommodation, and technical maintenance will be provided. It is intended to equip such service zones with devices and means for interaction with electronic border crossing systems, such as eQueue.
The list of problems that led to the adoption of the strategy indicates, in particular, the non-compliance of border infrastructure with the requirements of European regulatory documents on interoperability and the requirements of the Trans-European Transport Network (TEN-T) and the insufficient level of development of the European 1435 mm gauge network. Projects related to this area are prioritized by the Strategy. It is noted that this, in turn, provides access to EU financial instruments for the implementation of infrastructure projects in the relevant areas. This is, for example, a financial instrument such as the Connecting Europe Facility (CEF).
Another topic covered by the document is the reconstruction of multimodal terminals. According to government officials, the development of container terminals, which are also logistics centers, will be an important step towards the formation of a modern and efficient logistics system. It is emphasized that such logistics centers can significantly reduce transport and transshipment costs by providing such auxiliary services as customs clearance, warehousing and small-scale production support, as well as consolidating and distributing cargo flows.
The strategy also provides for improving processes related to the creation of inter-subject and cross-border mechanisms with integration into the digital space of the EU and the Schengen area. These problems are intended to be solved using the procedures of common control, common transit (NCTS) and electronic consignment notes (e-CMR).
The part of the Strategy that defines performance indicators for achieving strategic goals is interesting. For example, it is clearly stated that by 2030, 29 checkpoints for road traffic should be reconstructed and modernized. On the border with Poland, Hungary and Romania - 5 points each, with Slovakia - 2, and with Moldova - 12. At the same time, the governmentto build 17 new checkpoints: 1 - on the border with Poland, 3 - with Slovakia, 2 - with Hungary, 6 - with Romania, 5 - with Moldova. Another ambitious goal is to carry out reconstruction and electrification of 300 km of 1435 mm wide track.
Who will pay for this?
One of the last points of the Strategy should answer the question that has been troubling us since its very beginning - at whose expense will this "banquet" actually take place? Here is what is indicated in this regard: "Financial support for the implementation of the Strategy will be carried out at the expense of the own funds of the entities of the public sector of the economy in the field of transport, funds from the state and local budgets provided for the relevant year to the executors responsible for the implementation of the operational plan of measures for the implementation of the Strategy for the Development and Expansion of Border Infrastructure with the European Union Countries and the Republic of Moldova until 2030, funds from international technical assistance, funds from international financial institutions, as well as other sources not prohibited by law."
Specifically by items
The attached operational plan of measures contains almost 30 pages of detailed step-by-step implementation of the Strategy program. From them, for example, you can learn that by 2030 the government intends to modernize and technically re-equip the checkpoint for road and rail traffic "Yagodyn". The modernization of the road checkpoint provides for 9 positions and covers the period until 2028. It is then that the most expensive facility within the framework of this project is planned to be completed - a new bridge crossing over the Western Bug River. In total, it will cost 1.5 billion hryvnias. This year, 20 million should be spent on this construction. Another 500 million - in 2026 and 2027, and 480 million - in 2028. The sources of financing indicate international technical assistance, or other sources not prohibited by law. And the Ministry of Development, the Recovery Agency, the Recovery Service in the Volyn region, the Volyn OVA and the Ministry of Foreign Affairs have been designated as the responsible executors. To update this checkpoint, it is also planned to carry out a major overhaul of the M-07 public highway of state importance. These works will cost almost 237 million, but they should be completed this year. It is noted that last year 568 thousand were already allocated for this and a little more than 236 million will be allocated this year. This project is financed, according to the operational plan, by the EU CEF 2022 international technical assistance project and other international technical projects.
Read also Due to the suspension of funding from USAID, the development of a feasibility study for the modernization of 9 border checkpoints has been suspended
As part of the renovation of the railway checkpoint "Yagodyn", they intend to modernize the infrastructure between the cities of Lyubomly, Maceyev and Kovel. This project is planned to be completed in 2026. Last year, almost 257 million UAH were already allocated for it, this year 1.15 billion will go, and almost 870 million more will go in 2026. This will also be money from the EU CEF 2022 international technical assistance project and other international projects. And the Ministry of Development and "Ukrzaliznytsia" has been designated as the responsible executor by agreement.
The same contractor is also mentioned in the implementation of perhaps the most expensive project of the Strategy - the reconstruction of railway structures with electrification in the direction of Kovel - Yagodyn - the state border with the Republic of Poland. 12.3 billion hryvnias will be spent on its financing. They will begin to be allocated in 2026. Initially in the amount of 1.5 billion, and then plus or minus in equal parts up to 2030 inclusive.
A project of equal cost is the reconstruction of the railway track on the section of the State Border - Mostyska II - Sknyliv, which is intended to be implemented as part of the modernization of the checkpoint for the "Mostyska" railway connection. It will cost 10.9 billion hryvnias and will be completed in 2028. In 2026, they plan to allocate almost 4.3 billion for this, in 2027 - more than 4.8 billion, in 2028 - almost 1.8 billion. And this will also be money from international technical assistance and international financial institutions.
If we talk about the state budget, then, for example, in this area, they intend to finance the installation of a stationary scanning system for inspecting railway rolling stock on the Mostyska-Przemysl section at its expense. This will cost 331.2 million hryvnias, and the responsible executor will be the State Customs Service and JSC "Ukrzaliznytsia" by agreement.
The cheapest projects that are planned to be implemented within the framework of the Strategy will cost only 5 thousand hryvnias each. This will be the transfer of state-owned objects of the operating checkpoint and the re-registration of ownership and land use rights, which they intend to carry out as part of the reconstruction of the checkpoint for automobile traffic "Dyakove", as well as the inactive checkpoint as part of the construction of the checkpoint for automobile traffic "Khyzha".
According to the Strategy, this year the new construction of a railway track with a width of 1435 mm from the Chop station to the Uzhgorod station will be completed with the reconstruction of infrastructure facilities and engineering networks. Last year, 202.3 million UAH were allocated for this, and this year946 million is planned for the project. But further on, there will be electrification of this railway track, which will cost 1.14 billion and will be completed in 2026. These and other works will be carried out as part of the arrangement of the entrance to the checkpoint for the Pavlove/Matyovtse - Uzhgorod railway connection. The operational plan also includes the design of the reconstruction of railway structures with the introduction of a 1435 mm gauge on the Uzhgorod-Lviv section.
If we consider the Strategy from a geographical point of view, then the largest number of facilities are planned to be built, modernized and reconstructed in Transcarpathia over the next five years. We are talking about almost 50 projects in this region. If everything goes according to plan, it seems that a significant part of the funding that we (as the Cabinet of Ministers expects) will receive as part of international technical assistance will flow here.
Comment
Viktor Dovgan, Deputy Minister of Infrastructure of Ukraine (2016-2019)
Imbalance of Strategy and National Priorities
The Strategy refers to road and railway checkpoints with EU member states and Moldova - a total of 41 and 16, of which almost half are with Moldova. Accordingly, it would be logical to increase the number of new checkpoints with EU member states, since we declare plans to join there. So, with Poland, only 1 checkpoint is planned to be built - "Varyazh".
Doubts about financing from international technical assistance projects
Unfortunately, the previous leadership of the relevant ministry was used to working only with donor funds. And, for example, we all know where USAID is now... That's why large infrastructure projects did not go ahead, because the EBRD and EIB did not understand the priorities.
About ambitious (and not so) projects
In Lviv region, construction of a bridge over the Western Bug River on the local road "Sokal-Stoyaniv" is underway. The old bridge was declared emergency back in 2019. The project involves the reconstruction of the bridge crossing over the Western Bug River with a complete reconstruction of the bridge, namely the dismantling of the old bridge 127.87 m long and the construction of a new one 130.03 m long with the arrangement of a section of the highway (approaches to the bridge). The cost of the work is 357 million hryvnias. In July 2023, the tender for the reconstruction of the bridge was won by the contractor "Avtomagistral-Pivden" LLC. The reconstruction of the bridge is planned to be completed by the end of 2025. So, why mention in the Strategy a project that is almost completed?
The reconstruction of the railway track on the section "State Border with Poland - Mostyska II - Sknyliv (Lviv)" has been postponed to 2026, according to the Operational Plan of the Strategy. According to it, of the UAH 10.92 billion required for the implementation of the project, the first tranche of UAH 4.27 billion will be allocated only in 2026. The allocation of another UAH 4.83 billion is planned for 2027, UAH 1.81 billion in 2028. Ukraine failed to attract funding from the Connecting Europe Facility (CEF) for the implementation of this project and also failed with 50% of the project financing from the United States Agency for International Development (USAID). Therefore, this project needs to be done and loan funds from the EIB and EBRD, which have already been waiting.
And where is the project of the concession road Krakivets - Lviv, which was agreed upon a year ago by the Prime Ministers of Ukraine and Poland Shmyhal and Tusk? Where is the new bridge in Chop, the railway connection Suceava - Vadul-Siret - Chernivtsi, the railway connection Mukachevo - Uzhhorod and then Kosice and Budapest? Where is the full launch of Nyzhankovychi-Malkhovychi?
What should be done so that the Strategy for the Development and Expansion of Border Infrastructure does not become a declarative document?
Identify priority infrastructure projects for 5 years and sources of funding, and do not describe e-Queue in 25% of the document. Open the previous Implementation Plan of the National Strategy 2030 and everything is written there…