KYIV – Fastiv, a railroad junction town 85 km southwest of Kyiv, is presenting itself as a logistical solution for sorting containers and producing goods close, but not too close, to greater Kyiv.

As greater Kyiv’s population nears 4.5 million people, Fastiv’s mayor, Mykhailo Netiazhuk, says his 15 hectare industrial park will benefit from the city’s conjunction of east-west rail lines and south-north rail lines.

Fastiv recently gained a bit of fame as the boyhood home of Jan Koum, cofounder of Whatsapp. But its long time claim to fame is its role as a rail hub, with 12 railroad installations. With a population of 50,000, about half of jobs in the city are with Ukrzaliznystia, the state railroad.

Can it become more than a paper park? Fastiv Mayor Mykhailo Netiazhuk points to planned location for Fastindustry Park on a city map (Photo: James Brooke)

“We have begun inviting companies with experience in operating industrial parks and are aiming to find a developer by September,” said Netiazhuk on a recent visit to Kyiv, a 90-minute drive from his city.

Called “Fastindustry,” the park was registered in January with the Ministry of Economic Development. If built, the industrial park is to be mixed use: factories, an IT hub, food processing, a technical college, and the shipping container processing center.

Map of industrial parks in Ukraine, all registered since 2014. Fastiv is number 17. (Ministry of Economic Development)

Paper Parks

Ukraine is plagued with ‘paper parks” – industrial parks that offer not much more than a billboard alongside a highway.

Since the 2014 ‘Revolution of Dignity,’ 28 industrial parks have been registered. Six have opened their doors. The rest lack funding or are under construction without expected completion dates.

“The war in the East has scared off many would-be foreign investors,” observed Netiazhuk, “Although there is government interest in the industrial park project, the conflict in the East overshadows everything.”

Fastiv is on the right bank of the Dnipro, a western location that foreign investors find psychologically reassuring.

Big Park Developer Starts First Ukraine Project

Outdated laws and a lack of tax incentives stifle development of industrial parks in Ukraine.

“The process of getting permits is very difficult to go through,” Taras Trynoga, regional manager of CTP, the largest developer of industrial parks in Central Europe, said in an interview. “Oftentimes the land for these parks was designated for something different, like agriculture, and that needs to be changed.”

CTP, with 60 industrial parks in Central Europe, is breaking ground this summer on its first industrial park in Ukraine, a 23-hectare, $80 million project in Lviv.

“Ukrainian bureaucracy is also difficult,” Trynoga continued. “Investors become wary of dealing with local laws and navigating the possible corruption associated with the country.”

In Fastiv, central Kyiv Oblast, Fastindustry park already has about a dozen potential investors, according to the Mayor. He said the project’s location on two rail corridors is a big selling point.

“We are not specifically targeting investors,” he claimed. “They are beginning to seek us out.”

For comments and story ideas, please contact UBJ Correspondent Mark Satter at marksatter@theubj.com

Post June 17, 2017