(KYIV POST)- Nearly nine months following the announcement of Ukraine and Poland's successful bid for the 2012 UEFA European Football Championship, Ukraine has begun to allocate budget revenues to develop the country's infrastructure.
The coalition government led by Prime Minister Yulia Tymoshenko allocated Hr 1.0 billion ($199.6 million) in the 2008 budget for the construction and redevelopment of Ukraine's six strategic airports, and Hr 5.9 billion ($1.2 billion) for the development and maintenance of Ukraine's roadways.
Although a significant investment on the government's behalf, the budget funds will account for only a small part of the total cost of preparing and hosting the Euro-2012 tournament, said Idar Gazizullin , senior economist at the International Centre for Policy Studies (ICPS), a Kyiv-based think-tank.
Foreign investment will cover most of the cost needed to transform Ukraine into a suitable host for what is considered the world's second largest football tournament behind the World Cup.
In the coming months, Ukraine's task is to prove to the Union of European Football Associations (UEFA) that the football governing body was correct in awarding the tournament to the joint Ukraine-Poland bid.
Lucrative government tenders for infrastructure development are expected in the next few months, says Oleksandr Klymchuk of Concorde Capital, a Kyiv-based investment bank.
Renovation and reconstruction of Ukraine's transportation network, including the road system and airports, is a top priority, observers said.
Kyiv's Boryspil International Airport needs expansion to four terminals by 2012, according to a Concorde Capital report on Euro-2012 preparations. It is envisioned that new terminals will be built by private investment infused by the Ukrainian Aerosvit airline, and by the state-controlled airport itself.
Another priority is the construction of new terminals and renovation of airports in the six Euro-2012 cities of Lviv , Kyiv, Donetsk , Kharkiv , Odesa and Dnipropetrovsk .
An option available to the Ukrainian government is to privatize the airports, experts said. Following in the footsteps of former Soviet bloc states in Eastern Europe, Georgia successfully revamped its Tbilisi and Batumi international airports with fresh capital infused through privatization.
The privatization of Ukrainian airports is viable for Ukraine, said Klymchuk , who prepared the report.
"Several municipal councils have expressed interest in the privatization option," he said.
Recently, Prime Minister Yulia Tymoshenko called for legislation encouraging private capital in airport infrastructure development, said Vitaliy Vavryshchuk , an analyst at Kyiv-based Dragon Capital.
The government is likely to allow the privatization of passenger servicing infrastructure installations such as terminals, he said.
However, it is unlikely to allow the privatization of airport runways because that may complicate further development of nearby infrastructure, Vavryshchuk said.
Ukraine's Parliament is prepared to approve every law required to prepare for Euro-2012, he said. Among its main priorities will be to set interim tasks and specific deadlines for the responsible ministries, and to enforce their implementation.
Close presidential ally Yevhen Chervonenko will lead the government agency preparing for Euro-2012.