Rebuilding Ukraine: Western companies develop post-war reconstruction plans

Western governments, leaders, and investors are already seeking a place for post-war reconstruction in Ukraine, which, according to the European Investment Bank estimates, could amount to over $1 trillion. Adjusted for inflation, this is five times more than the funded US Marshall Plan after World War II.

Basic reconstruction scale

An overview of ongoing restoration efforts across Ukraine, even amidst the ongoing conflict for the past three years, provides an insight into the potential scale and appearance of the overall country reconstruction.

German and Austrian companies are planning ventures in infrastructure and defense, JPMorgan Chase & Co. awaits working groups for "pre-project planning," and Denmark has allocated €120 million ($130 million) for the reconstruction of a shipbuilding hub in Mykolaiv.

The largest steel producer, Metinvest BV, estimates that approximately 3.5 million tons of steel will be needed for extensive reconstruction of housing and social infrastructure over the next five to ten years. The company asserts its readiness to meet this demand.

German companies are following their government's bilateral support for Ukraine. In February, the defense giant Rheinmetall AG announced plans to establish a facility in Ukraine for the production of crucial 155mm artillery ammunition.

The construction materials manufacturer Fixit has been operating a new production site in western Ukraine since last year, and the chemical company Bayer AG has announced investments in seed production.

Austrian company Waagner-Biro Bridge Systems, known for modular steel bridges spanning rivers and valleys, has already begun production at a site in Western Ukraine. Last year, the company's CEO, Richard Kerschbaumer, mentioned in an interview that the "work will last for a decade."

"Given where the money will come from, US and European companies are likely to get the lion’s share of the contracts when they come," writes Bloomberg.

Türkiye is not lagging behind

Turkish companies restore bridges and roads, supplying power generators and mobile hospitals, hoping to gain an advantage in the competition for major contracts.

In the two years of war, Turkish construction contractors have completed 70 projects in Ukraine, totaling around $1 billion. The largest among them, Onur Group, is repairing blown-up bridges, including the Irpin Bridge on the outskirts of Kyiv.

In collaboration with South Korean Samsung C&T Corp., Onur Group has also built mobile hospitals in Ukraine. Later, the company aims to undertake the reconstruction of the Dnipro International Airport and some highway construction projects.

Despite fierce competition for contracts, Turkish companies hope that their experience in working in countries grappling with conflict or corruption will give them an edge.

Istanbul-based Dogus Construction, which has been operating in Ukraine for many years, is restoring three bridges with the support of the United Kingdom. According to their representative in Ukraine, Suha Canatan, the company expects to secure contracts worth "several billion dollars" for reconstruction one day.

Corporate sentiments

Representatives of companies note that regardless of what happens in the near future, the reconstruction of Ukraine is bound to commence. Corporations simply need to ensure that they are prepared for it.

For instance, the Hungarian engineering company Ganz-Mavag, located outside Ukraine, mentioned that one of the reasons for participating in the tender to acquire the Spanish train manufacturer Talgo SA was to increase capacities to meet the demand in Eastern Europe over the next decade. This demand is expected to arise from the reconstruction in Ukraine when it begins.

In Mykolaiv, consultants and local authorities are developing a master plan for the city's development until 2050. According to Jesper Karup Pedersen, the technical director and project manager at the Danish engineering consulting company Cowi, working on the reconstruction of Mykolaiv, many of these plans remain only on paper as further progress is impossible until the end of the war. Many projects may also become targets for bombings. Additionally, obtaining documents from local authorities has become complicated due to people being called to the front, creating gaps in public administration.

Most of the funds allocated to the municipality from Denmark have been used to purchase generators, water pumps, heaters, and support demining efforts in Mykolaiv, whose population has decreased since the Russian invasion two years ago.

At the same time, Beata Javorcik, the chief economist of the European Bank for Reconstruction and Development, which has provided Ukraine with €3.8 billion in financing since the beginning of the war, noted that the focus should not only be on money but also on people.

However, according to Bloomberg, every person responsible for the reconstruction projects in Ukraine currently cannot know the size of the country's territory after the war concludes.

"The map of Ukraine will depend on how much of that territory is taken back by Kyiv, and when and where more than a quarter of the country’s prewar population will opt to live. About 18% of Ukraine is currently occupied by Russian forces," the agency writes.

It is also unknown how to guarantee that after a peace agreement, Russians will not reoccupy the regions and areas where reconstruction work has been carried out.

Mustafa Nayyem, the head of the State Agency for Infrastructure and Reconstruction Development of Ukraine, noted that the country has a chance to rebuild better than during the Soviet era. In his opinion, the success of the largest investment project since World War II requires the patience of Ukrainians. According to the official, much will also depend on Russia and whether it will adhere to peaceful agreements.

"Many people think in terms of ‘the war will end and ...,’ but we do not know when it will end. And even when it ends, what shall we do with such a neighbor? We will definitely need a long time to restore territories that were liberated or on the front line," Nayyem said.

Rebuilding Ukraine

Recently, the US Department of State, in collaboration with the German Marshall Fund, announced the establishment of the Ukraine Cities Partnership to support sustainable infrastructure reconstruction. This new public-private partnership will assist Ukrainians in redesigning and rebuilding resilient, inclusive, and robust cities.

Meanwhile, the number of communities in Ukraine developing comprehensive reconstruction programs is increasing.

At the end of February, a workshop in Warsaw focused on the economic reconstruction of Ukraine, using Mariupol as an example.