Yesterday, October 3, 2019, the Verkhovna Rada of Ukraine adopted in the second reading at once two important draft laws related to the use of the ProZorro Sales service:

No. 1055-1 “On the rental of state and communal property”;
No. 1046 “On Concession”.

Let's figure out together what conclusions should be drawn from this news.

Draft law No. 1055-1

The sad situation with the rental of state and communal property in Ukraine has long required a transparent and effective solution. Up to 40% of all real estate is rented out at a symbolic price, literally UAH 1 per square meter of area. In the Chernivtsi region of such real estate is three quarters. Naturally, it was not casual people who became tenants on such exceptionally favorable conditions.

The amendments approved by the Verkhovna Rada stipulate that state and communal real estate will be leased out according to a simplified scheme at ProZorro Sales online auctions. The reforms of the state procurement and sales system will finally affect yet another very conservative sphere of state activity, regulated by the old law of the 1992 model.

The interaction between the lessor and the electronic trading platform will be regulated by the contract, and in the law itself, there are already instructions regarding the amount of payment, the rules for conducting tenders, publication, and signing of the contract. Separately specified are criteria for dividing objects into those that can be leased without an auction and those that cannot.

For entrepreneurs, this means a greater chance of winning the auction: there will be more lots and less shadow distribution of tidbits. Get the perfect point to create your own business will now be possible with a much smaller budget. And the state, according to preliminary estimates, will increase the size of the proceeds of the property being leased by almost a quarter.

Draft law No. 1046

Another draft law, adopted on second reading on Thursday, is related to the investment attractiveness of Ukraine. He finally established a transparent procedure for identifying concessionaires for economically important facilities through auctions in the ProZorro Sales system.

A concession is a temporary transfer of the right to use certain property, which, although it is not removed from state ownership, attracts private capital.

This method of partnership with business and investors has been used around the world for more than 100 years, helping to develop key (including strategically important) areas for which the state currently has no resources.

A concession also increases management efficiency and industry competition. And for investors, maintaining the property in state ownership is less risk and more guarantees.

Now both documents are awaiting signing first by the speaker of the Verkhovna Rada, and then by the president. The main provisions of draft law No. 1055-1 will come into effect on February 1, 2020, and draft law No. 1046 from the date of publication.