Roads a main focus for Ukraine

Under the Ukraine government’s State Target Economic Programme, an investment of around UAH265 billion (€25 billion) between 2013 and 2018 is planned to improve the country’s road network.

According to research company PMR, the programme – which was approved by the government in September – includes plans to build around 2,200km of motorways in line with European standards, and extensively repair 30,700km of roads (representing around 18% of the total network).

But PMR cautioned that these were high targets to meet. The Ukraine government has succeeded in renovating only 2,000km of roads per year in recent years, so the aim of 30,700km in six years looks ambitious.

“The road network is in poor condition,” PMR said in a report. “About 56% of national roads are in need of extensive modernisation. Ukraine’s roads do not meet the required standards in in terms of flatness and strength."

Overall, Ukraine’s construction output is expected to increase 3.6% year-on-year in 2013, reaching a value of UAH78 billion (€7.4 billion). This compares to growth of 11% year-on-year in 2011, and a decline of 9.1% for the nine months between January and September this year.

PMR said growth had been affected by higher prices within the construction industry, with the most substantial increase in prices for the nine-months to September 2012 recorded in the transport infrastructure (15.2%) and residential construction (14.9%) sectors.

In addition, the mini construction boom that came with the construction projects for the Euro 2012 football tournament, which Ukraine co-hosted with Poland, also ended at the start of the year.

“Nevertheless, Ukraine’s construction market is poised for a strong recovery in the years to come. Regardless of the somewhat reluctant bank lending to the construction sector, and the uneven recovery in demand for housing, overall construction activity in Ukraine will continue to grow,” PMR said.

In 2013, PMR said that, together with investments in the road network, strong growth is also forecast to be seen in areas such as economy-class residential property, shopping centre real estate, the development of wholesale agricultural produce logistics facilities, road construction, and natural gas exploration.