At the beginning of 2023, the media widely reported that a seaport was sold in Ukraine, for the first time in history. The event was really far from ordinary, so the increased interest in it from the press and society in general was quite understandable.
Eight bidders bid for the Ust-Danuy port, located in the city of Kilia on the Danube River. The starting price of the lot (60 million hryvnias) of the port increased more than three times during the auction, and the winner, the Vinnytsia company Elixir Ukraine, bought the port for 201 million hryvnias. In fact, the buyer had to pay almost UAH 250 million, including VAT and 3% Prozorro. The new owner undertook to pay arrears from wages, not to lay off workers, and in the future to modernize warehouses, purchase modern handling equipment, expand the range of goods and build a grain elevator for 50 tons.
Note that the fate of this local port (the smallest in Ukraine) vividly illustrates the well-known saying - "if there was no happiness and misfortune would help." Before the invasion of Russia and the naval blockade, the Ust-Danuisk port, like the other two Danube ports — Reni and Izmail — were not a priority for investors, and even the starting amount of 60 million hryvnias. would seem to potential buyers to be very overpriced. Moreover, the port barely made ends meet (in 2019 – 202 UAH in losses, in 2020 – 308 UAH, in 2021 – 222 UAH).
However, from the beginning of the maritime blockade until the start of the "grain corridor" in July 2022, it was these small ports on the Danube that quite unexpectedly saved Ukrainian exports, turning out to be the only safe waterway for Ukrainian business. The fact is that the ports are right on the border with Romania, a member of NATO, and the ships, leaving the port after transshipment, almost immediately enter its territorial waters. Therefore, they were not threatened by the blockade from the Russian Federation. As a result, according to the results of 2022, Ust-Dauna port and port operators operating on its territory increased the total cargo turnover 12 times (!) — from 64 thousand tons in 2021 to 785 thousand in 2022. Such figures became a record for the entire time of Ukraine's independence, and hence the increased interest of investors.
However, the auction itself was the culmination, but not the final, stage of privatization. Then the bidding protocol was signed, payment was made, and the sales contract was signed, but then everything came to a standstill. Even now, in July 2023, the new owner has not received the deed of acceptance and transfer of the object and, accordingly, has not put the object into operation. Unlike the auction itself, the current situation around the port is not covered much, only the "seller" on behalf of the State Property Fund (FDMU) vaguely talks about "obstacles" in the form of some court cases.
"ElitExpert" decided to find out what the suspension of the privatization process was connected with, and after a thorough study of the documents, it became clear that the FSMU did not want to raise this topic publicly. After all, the threat of failure of this large investment project was caused by the unprofessional actions of the Fund during the preparation of the object for privatization. Let's dwell on this in more detail.
The port "Ust-Dunaisk" includes the "Kiliya port point", on the territory of which port operators conduct their economic activities. The entire property complex of the port point is jointly owned by the Federal State University and LLC "Seaport Danube Kilia" (LLC "MVDK"), affiliated with the port operator LLC "ZTK", in the following shares:
94/100 shares of the complex of state-owned buildings and structures are on the balance sheet of SE "MTP Ust-Dunaisk", a 6/100 parts of the complex of buildings and structures are owned by MVDK LLC and leased by ZTK LLC. This share was acquired at auction in 2007, then twice approved by court decisions, resold and not appealed - moreover, the people who control it have not changed from 2007 to the present.
Thus, having publicly declared that the entire property complex, essentially the entire port, is being auctioned, it is actually only a sale of a share in a single property complex. This is exactly what is written in the contract of sale between the FDMU and the buyer. In fact, due to the fact that the property was "sold" by the Fund without division, even the state registrar has no right to register it to a new owner.
We found out that the second co-owner of this property complex, the company "Grain Terminal Kilia" (TOV "ZTK") is the official port operator, which has the only stationary transshipment grain complex at the port point. From May 2022 to July 2023, the company handled 200 tons of grain cargo and handled about 50 vessels, so it is not a fictitious economic activity. The company owns a grain processing complex, a weighing complex, a loading and unloading complex, conveyor lines, a hangar, as well as capital buildings on the territory of the port - the building of the Ust-Dauna seaport and office premises.
"ZTK" LLC declares that the ownership of the company is joint-stock, therefore, when it became known about the preparation for privatization, the LLC decided to separate itself into a separate business with its property. This could be done in two ways - either to conclude a contract and divide the property in kind, or to seek it through the court.
At the same time, the owners declare that they do not prevent privatization and do not try to disrupt this process, but at the same time they do not want their property taken away from them. Since, in their opinion, the FSMU illegally put up for auction an object for which there is no full ownership right, the company initiated court cases No. 910/4588/23; 916/102/23; 916/186/23; 910/6314/23 on the cancellation of the auction, contract and orders of the FSMU, as well as the distribution of property of co-owners.
It seems that the victims in this case are not only LLC "ZTK", but also the Administration of Seaports of Ukraine - the FSMU put up for sale the road belonging to AMPU leading to the port, although according to the Law "On Seaports of Ukraine" it is not can be put into private hands. As a result, it was this mess in drawing up privatization documents that gave rise to lawsuits and the opening of criminal proceedings.
On the other hand, the FDM now interprets these courts as "blocking privatization" and the impossibility of transferring the port to new owners, clearly trying to hide its own mistake in the process of preparing documentation, thereby avoiding responsibility for the impossibility of completing the privatization procedure. After all, in such a situation, it is really easiest for the Fund to close its eyes and brush off the problem, transferring the conflict with the company to the new owner, Elixir-Ukraine LLC.
However, according to the latest information, the winner of the auction clearly does not want to be immersed in the courts for many years, so he is thinking of abandoning the purchase due to the inability to dispose of the entire property complex of the port. In this way, the FDMU may fall into a very bad history, since the cancellation of the agreement in wartime and the return of the already paid 250 million hryvnias to the buyer will clearly be a strong reputational blow to the Fund. That is why officials are now feverishly "looking for extremists" - and, apparently, they are trying to find them in the ZTK company, and not in their own ranks.
Realizing that the situation will only worsen in the near future, "ElitExpert" appeals to all participants of the agreement and its controlling bodies with the aim of finding out how the parties intend to constructively complete such an important project for the state in the shortest possible time.
Olena Ovchinnikova, Oleksandr Shorokhov.
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