The Schönborn Palace and Kuyalnik will be transferred to private investors, but there are some caveats
7 May 16:07
The State Property Fund is launching a public-private partnership mechanism that will allow state assets to be transferred to private investors without changing the form of ownership. The Kuyalnik sanatorium and the Palace of the Counts of Schönborn will serve as pilot projects. This was announced in a post by the Fund on Facebook, according to "Komersant Ukrainian".
“These are facilities that are not subject to privatization because they have strategic, social, or infrastructural significance for the state. Therefore, they will remain the property of the Ukrainian people,” the Fund explained.
At the same time, the State Property Fund emphasized that the status of a strategic asset should not mean preserving the problem, which is why a new approach to managing state assets was initiated.
The SPFU is considering the following assets as its first pilot projects:
- The Kuyalnik Sanatorium (Odesa region), founded in 1834: this unique health resort requires comprehensive modernization to become a modern balneological resort;
- The Palace of the Counts of Schönborn (Transcarpathia): an architectural gem from the Austro-Hungarian period that can be transformed into a model tourist destination of European standard.
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“The key principle of the project is that the state retains ownership but attracts private capital, expertise, and management solutions for the modernization and development of the facilities,” the State Property Fund reported.
The State Property Fund outlined the main principles of this mechanism:
— the state does not sell strategic assets but creates conditions for their development;
— the private partner invests in restoration and effective management;
— society receives modernized infrastructure and the preservation of important facilities;
— the economy receives new investments, jobs, and development.
The implementation and coordination of the public-private partnership initiative at the Fund will be overseen by Natalia Panova, Deputy Chair of the State Property Fund of Ukraine.
“This project is about a new model of state management of state capital: we are opening the door to investment to save what cannot be preserved by other means. We cannot let assets fall into ruin; we must find mechanisms to preserve, develop, and utilize them for the benefit of the country’s economy,” the State Property Fund of Ukraine added.
According to the State Property Fund of Ukraine’s estimates, the required investment in the partnership project for the Schönborn Palace amounts to 200–400 million UAH. Implementation will take 2–4 years, while the payback period is estimated at 8–12 years. Once the tourist destination is launched, the projected annual revenue will be 40–80 million UAH, and the expected visitor flow is up to 150,000 people per year.
The Pirogov Clinical Sanatorium “Kuyalnik” in Odesa has been a unique mud resort renowned for its healing properties since the mid-19th century. It is part of the trade union system (PJSC “Ukrprofzdravnitsa”). The resort treats diseases of the spine and joints, the nervous system, and the reproductive organs. Limanotherapy is also used in the treatment of skin diseases, particularly psoriasis. Silt-sulfide mud, brine from the Kuyalnik Estuary, and two types of mineral water are used for treatment.
The Schönborn Palace in the Mukachevo District, also known as Beregvar Castle, was built between 1890 and 1895. It is a five-story building with four towers, constructed of red brick. The palace’s architecture combines elements of Neo-Gothic, Neo-Renaissance, and Moorish styles. The palace is an architectural monument of national significance.
Since 1946, the building has housed part of the “Karpaty” sanatorium. Ownership of the property has been vested in the state, represented by the State Property Fund of Ukraine, since April 2023.
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