Over the past fifteen years, only 24% of 400 historical and architectural key plans, which Ukraine needs, have been approved. This was stated by the BRDO’s Construction Sector expert Iryna Bardasova during the conference “Decentralization-Hromada-Heritage”.
“Today, this situation leads to a number of problems and sometimes to social tensions. The adoption of all necessary historical and architectural plans will help to protect our cultural heritage and promote the development of historical sites for the benefit of communities,” Iryna Bardasova said.
According to the participants of the conference, Ukraine has long needed a transition from the conservation ideology to the smart management and use of historical sites. A case in point is the State Historical and Cultural Reserve “Tustan”, where people protecting the monument agreed with an investor and a community.
It resulted in designing a tourist infrastructure to increase the number of visitors without causing damage to this historical site.
So, how is the investor from Chernivtsi trying to get a permit for construction of a modern cultural and business complex of CC3 class in Chernivtsi doing?
As a brief reminder, previously on events in that case: the entrepreneur provided the State Architectural and Construction Inspection of Ukraine (DABI) with all the necessary documents weighing several kilograms. They should have answered through the “Transparent DABI” system on February 4. But something went wrong:
* The DABI violated the procedure: the investor from Chernivtsi received a refusal with a delay of 5 days on 06/02/2019, since it was dated February 1, 2019
* Probably, the DABI was in such a hurry to provide a refusal that it was signed by the Chief Inspector of the department responsible for putting into operation and not for granting permits
* When there’s a will to provide a refusal, there always will be a reason for this. For example, in the entrepreneur’s application, the title of construction doesn’t contain its location, and nobody cares that it is indicated in the next line. However, urban planning specifications and restrictions containing the same construction title and the location indicated in the same manner have been issued by a competent agency. Who is responsible for this mistake? No other than the Ukrainian business
* They will prove that your type of construction was not mentioned in the application, even if it’s just DABI’s imagination, and you have indicated all details
* There is an application form approved by the Cabinet of Ministers, in which you are required just to add some explanatory note and fundamental drawings. It doesn’t matter for the DABI, since they have their own rules and their own atmosphere
And finally, in our experience, 80% of the grounds for refusal to grant a construction permit are justified not by legislative acts, but by regulatory technical documents such as DBNs and DSTU. That is, the DABI re-examines design documents at the expense of taxpayers. Why? And most importantly, why construction project owners face the consequences? It’s not what we thought the “transparent DABI” project would be.
From now on, the law on currency and currency transactions came into effect in Ukraine! At the BRDO’s initiative, special sanctions in foreign economic activities were cancelled. Ukrainian businesses sometimes learn about these penalties quite by accident: for example, at a bank or at a customs office, when it was not possible to conduct a particular foreign economic transaction. You must admit that it is a so-so surprise.
It is important to understand that these sanctions do not apply to the war with the Russian Federation (the sanctions related to the aggressor country are regulated by a separate law) or with trade wars;
Special sanctions in foreign economic activities are an archaic and unreasonable mechanism that has not proved to be effective and does not exist in the legislative practice of other states;
In 2017, it led to initiating hundreds of legal proceedings. Hundreds of exporting companies have been victims of sanctions and lost profits and currency earnings;
The cancellation will make life easier for Ukrainian entrepreneurs and help improve business climate.
This is an important step towards liberalization of foreign economic activity, which was provided by the National Bank through the new law. Thank you for your cooperation!
The event we want more than the Oscars or the results of Eurovision selection. The Draft Law No.8124б which was developed by the BRDO office together with the Ministry of Economic Development and Trade and which the entire country has been waiting for 2.5 years, finally has a chance to be voted! Its adoption will make it easy to do business in Ukraine, and our country will be in the TOP-50 of the Doing Business 2020 rating!
The Ministry of Economic Development defined No.8124 the number one priority at the session of the Verkhovna Rada!
Briefly, the draft law No.8124 provides for the overall improvement of the investment climate in Ukraine by cancelling share participation, increasing protection of minority shareholders, providing a possibility to file a court claim online, creating a trust property institution and much more. The adoption of this draft law along with other government initiatives will give Ukraine +28 positions in the Doing Business rating. We monitor the situation, stay tuned for more news!
More information at: ▶ ️ http://bit.ly/2UEotvr
As we wrote recently, 14 Ukrainian cities localized step-by-step instructions to open a business in accordance with local requirements on the Start Business Challenge platform. Not all of them are regional centers – in fact, many Ukrainian regional centers have delayed to join the platform and improve access to information for future entrepreneurs.
We hope this will not last long! You can view the list of cities on the #StartBusinessChallenge platform here: ▶ ️https: //sbc.regulation.gov.ua/cities
We have news about road repairs in Ukrainian regions! This time we are examining the situation in Khmelnytsky, Rivne and Zhytomyr regions.
In the Khmelnytsky region, three largest contractors have 78% of orders, while the others get just some small orders.
In the Rivne region, the situation is quite competitive, since 6 largest companies won 10-20% of the tenders there, which is a good indicator.
As for the Zhytomyr region, 51% of all repairs are carried out by the same contractor. Such a monopoly doesn’t help improve the quality or reduce prices for road works. The regional authorities should learn from this situation.
To monitor the transparency of tenders and be able to publicly influence the situation, we have created a platform for monitoring the costs for construction and road repairs at https://regulation.gov.ua/. We will inform you about details very soon.
Based on the Minregion’s data
Following the instructions of the Vice Prime Minister, Minister of Regional Development, Construction, Housing and Utilities of Ukraine Hennadiy Zubko, a working group on reforming the system of architectural and construction control by introducing real estate developer online accounts along with an online platform “Prozora Derzharhbudinspektsiya” and developing regulatory acts was set up. It consists of representatives of the Ministry of Regional Development, the State Architectural and Construction Inspection (DABI), the State Agency for E-Governance of Ukraine, the BRDO Office, IDLO, TAPAS, the government-public initiative “Together against corruption” and the Confederation of Builders of Ukraine.
“The quality of work, the attraction of new investments and the development of the industry as a whole depend on the transparency and openness of constructions activities. Therefore, the working group dealing with reforming the system of architectural and construction control was set up to prevent any abuses and corrupt practices in construction. In particular, this is done through the introduction of electronic services, allowing to avoid running around from one official to another,” Lev Partskhaladze, the Deputy Minister of Regional Development, Construction, Housing and Utilities of Ukraine, said.
At the first meeting of the working group, a number of issues that require to be of highest priority to address them were discussed and worked out. They include:
* separating control functions and administrative services by using a Construction Permits Flow Chart;
* automating applications for obtaining permits to build medium and high consequence class facilities (CC3, CC2);
* connecting local authorities, CNAP (center for providing administrative services) and other registries to the DABI’s e-cabinet;
* strengthening responsibility of persons signing construction permits and other issues.
Source: Economichna Pravda
The changes will affect only large industrial consumers. The market will not function for the population and small businesses yet.
As part of its international commitments, Ukraine has to reform its energy sector in accordance with requirements of the Third Energy Package.
In April 2017, the Parliament adopted the Law “On Electricity Market”, the main articles of which became effective in early 2019.
The main change is that consumers will have the right to choose a service provider, so buyers will be able to enter into a contract with a seller of cheaper electricity. Given the competition, consumers will potentially have different options for choosing a tariff.
For example, if a person uses electricity only on the weekend in his/her summer house, a supplier may offer a lower tariff to deliver electricity on Saturday and Sunday. In agreement with a consumer, the supplier will also be able to remotely control the consumption, for example, to turn off the air conditioner. This is how this market works in the EU.
However, it is not realistic to implement these new rules in the domestic sector in Ukraine.
Firstly, our market is still being developed. At present, the oblenergos were divided into distribution system operators and electricity suppliers. The situation in the gas market, when oblgas companies were formally divided into network operators and suppliers, but nothing has changed for domestic consumers, is repeated.
Secondly, domestic consumers are subsidized by the industrial sector. The price of electricity for the population is 0.9-1.68 UAH per kWh, for businesses – 1.9-2.4 UAH per kWh. Independent traders (not oblenergos) will not be able to sell electricity to people at a reduced rate, because their costs are not compensated, and this is 30% of the market.
In the vast majority of European countries, domestic consumers pay more than industrial and commercial ones, because they have lower consumption, it is more difficult to work with them and they have more irregular consumption schedules. As for the enterprises, they operate on predictable and more regular consumption schedules, so the price is lower for them.
The EU thus partially stimulates its economy. In our country, social considerations prevail over economic logic.
Independent suppliers serving large customers have long been operating in Ukraine’s industrial sector. Sometimes, it is the companies affiliated with enterprises, which are consumers. They were created by the factories themselves to save on expenses, which are included in the feed-in tariffs of oblenergos. With high electricity consumption, even 1% savings provides a considerable impact. These suppliers will become the first traders on the market.
They have already started to “run” after large consumers to create a portfolio of customers for themselves. However, the market will not begin to work properly in the wholesale segment (generation segment) until July. So far, all suppliers are purchasing electricity on the wholesale market.
Starting from July 1, the market of bilateral agreements should begin operating, and suppliers with high consumption will be able to agree with generation companies on a more favorable price. However, there is a possibility that the price will increase out of control.
To avoid the crisis of payments and be ready for the market opening, it is necessary to abolish cross-subsidization and adjust tariffs for the industrial sector and domestic consumers by raising the price for the latter by 20-30% before implementing the changes.
Nobody knows how much tariffs will increase after the full opening of the electricity market. If we really open the market, the tariff may increase by 300-350% at certain hours. It is beyond survival for small and medium businesses.
The situation could be improved by importing electricity. In neighboring energy markets, electricity costs less than in Ukraine at certain hours of the day. Unfortunately, such imports are technically impossible at the stage of market implementation.
Will the government tell the electorate that it will increase tariffs not only for gas but also for electricity in the election year? We doubt it. It is rather obvious that tariffs for domestic consumers will remain unchanged in 2019.
To somehow compensate for the negative consequences, the Verkhovna Rada should approve a decision on providing services for domestic and small non-domestic consumers at a social rate and appoint a public supplier for this.
In the gas market, this function is assigned to Naftogaz and suppliers selected from oblgas companies. In the electricity market, a “special supplier” can play this role. In this case, it is necessary to oblige a certain generation company to sell electricity to this special supplier at a fixed social rate.
This means that, despite all the “reform”, the electricity market will not operate for small businesses and the population in the near future. However, this can be not a drawback but even a benefit under the existing circumstances.
The views expressed in this article reflect solely the author’s point of view and do not necessarily coincide with the position of the Delegation of the European Union to Ukraine.
What do a carrier who gets you to work, a dentist who filled your tooth and a veterinarian who cured your cat have in common? They all should obtain licenses to work in Ukraine.
The licensing is a separate maze of state regulation, full of complicated, illogical, meaningless and archaic requirements. Well, imagine that you are the owner of a security firm, paid for a license to a payment account of the State Treasury Service, want to work and pay taxes. You need to be prepared to carry with you some weird piece of paper, a payment document to confirm, otherwise they can suspend your license.
There are many such imperfections in today’s regulation. On average, one businessman spends 8,000 hryvnias to check licensing requirements, prepare a package of documents, etc. In future, these costs can grow at least twice. And there are over 160,000 such entrepreneurs in Ukraine.
The BRDO Office together with the Ministry of Economic Development and the SRS proposed to improve licensing procedures and develop amendments to the Law “On Licensing Types of Economic Activities”. This will save 960 million hryvnias a year. Our plan is simple:
prohibiting to require entrepreneurs’ documents confirming that they paid fees for the license and cancel the license if they did not pay;
suspending licenses in full or in part;
determining the renewal procedure for licenses that were suspended and the procedure for filing an appeal against such a decision, etc.
The rule we follow: if you can save time and money for businesses, it’s worth doing. We hope that the next deregulation Cabinet of Ministers will support this decision, and it will soon be in the parliament’s session hall.
Olena Shuliak, the Construction Sector Head at BRDO, announced that at the Conference “Spatial Planning. How will cities develop?”. She also noted that this was a good result, but that was not enough. All valid urban planning documents should be publicly available.
“As of today, Vinnytsia, Volyn, Rivne, Zaporizhzhya, Odesa, Dnipropetrovsk and Sumy regions added 100% of data to the single state web resource pmap.minregion.gov.ua/. But Khmelnytsky, Chernivtsi, Crimea and Lviv regions still have not find time to enter the information, so there is still something to work on,” Olena Shuliak stressed.
Also, Olena Shuliak noted that 24 regions of Ukraine and Kyiv were operating on the single state web resource pmap.minregion.gov.ua/, 370 resource users were registered and data on urban planning documentation for 20 thousand administrative and territorial units were added.
During the event, two discussion panels were held: “Interests and problems of communities in spatial planning” and “Prospects for the development of topography, land management and urban planning for spatial planning”, during which the live cases, when the availability or absence of spatial planning influenced the development of communities and cities, were discussed together with the best specialists.
For example, they talked about the revival and development of regional airports. In particular, the Uzhgorod airport, which can not fully function due to the fact that the surrounding land plots were allocated for residential and commercial buildings. The spatial planning of the Kyiv region was discussed as well. In particular, it is a case when in one of the villages of the region, namely the Buzova village, ATO soldiers got land plots, which are in fact hard to develop because they were allocated contrary to the project of the belt road around Kyiv.
“A year ago, we launched a portal allowing to monitor such things. It should be noted that the Kyiv region is more active now and has already added 78% of data. But there is still something to work on,” Olena Shuliak summed up.
“Today, investors want to deal with predictable and simple rules. And the PMAP web resource, on which there are available urban planning documents in free access, will help you. This is a unique project, thanks to which the community, businesses and authorities will be able to find the necessary information here and now,” the BRDO Head Oleksiy Honcharuk said.
The Deputy Head of the Embassy of the Netherlands Maaike van Koldam noted:
“The pMAP Open Spatial Planning Project, implemented by BRDO experts, is a step forward, a step towards the use of smart data. And we are very glad that the data on urban planning documentation become publicly available step by step and can be used by anyone,” Mrs Maaike van Koldam said.
Dmytro Zhyvytsky noted that the Open Spatial Planning should be divided into two parts: spatial planning and open spatial planning.
“In Sumy region, we face the lack of modern district planning schemes and general plans every day, because the existing ones simply do not reflect the actual situation. The territorial planning is a problem of local self-governments and it should be resolved,” Dmytro Zhyvytsky, Head of Sumy Regional State Administration apparatus, said. “The next step should be publicity. We faced with a problem when the state provided funding for outpatient clinics, but unfortunately, we couldn’t plan everything wisely due
to the lack of updated urban planning documents, and, as a result, the medical reform began to slow down, and the decentralization reform also slowed down. That is why the Sumy region was a PMAP pilot project and filled the PMAP portal with 100% of outdated information both for citizens and potential investors.”
The secretary of the Poltava city council Oleksandr Shamota told about the experience of Poltava:
“In Poltava region, there is a huge number of requests for access to urban planning documentation. The closed Soviet past has its effect, but the situation is changing. We strive to be open so that every citizen can receive any information, including the one on urban planning documents, publish everything in any communication channels and draw attention to the problem. It works. And the PMAP portal helps us with this,” the secretary of the Poltava city council Oleksandr Shamota said.
Irina Ozimoto spoke about the foreign experience of the United States and European countries.
“When studying the experience of foreign countries, first of all I drew attention to the flexibility of site plans, the openness and accessibility of spatial planning and land development. Accordingly, they can easily get to each city in the country. Even small cities have a well-developed infrastructure, including airports, ranging from small-regional to large international hubs. There is still much progress to be made in Ukraine, but I hope that Ukraine will reach a high level step by step, and spatial planning will become standard practice, on which the future of cities and communities is based.”
For information:
The pMAP Open Spatial Planning Project is implemented by the BRDO Office with the technical assistance of the MATRA project and with the support of the Ministry of Regional Development, Construction, Housing and Utilities of Ukraine. The project is aimed at facilitating the search and access to urban planning documentation in Ukraine through the single state web resource http://pmap.minregion.gov.ua/
On January 22, 2019, a resolution “On approval of tariffs for non-standard connection of capacities and tariffs for a linear component in 2019” comes into force.
Due to the updated method for calculating connection costs, investors will be able to open new production facilities in Ukraine under a simplified procedure. As for the regulator (NKREKP), a key factor is to monitor the connection of consumers of oblenergos to networks at transparent rates and within specified time frames.
According to the BRDO’s Energy Sector head Oleksiy Orzhel, consumers who do not fall under the category of standard connection will also face the changes. Actually, from now on, the NKREKP’s decisions will fix the tariffs to connect a new consumer rigidly, and not as it was before, when prices were set on the basis of technical specifications, which were often excessive for business owners, leading to the need to “fix” the optimization of the list of technical measures. The adoption of this resolution is an important step towards businesses in Ukraine.
In Finland, elementary school students study the programming. California, Israel, China and Germany are already testing self-driving cars. Probably, it’s time for Ukraine to focus on innovations.
The cryptocurrency-hryvnia trading volumes amount to $2 million per day on main exchanges. The Ukrainian mining segment is $100 million per year. ICO projects with Ukrainian founders/teams produced more than $100 million in 2017-2018.
And all these volumes exist amid legal uncertainties and constant problems with banking services. The BRDO Office prepared a Concept of state policy on virtual assets to improve the situation.
We hope that the document will be submitted to the Cabinet of Ministers within a month. But we are increasingly optimistic about the future. The draft Concept was supported by two major companies:
And the Ministry of Justice provided an official opinion that the document complied with Ukrainian laws.
We ask the Government for support and keep our fingers crossed!
The National Commission for State Regulation of Energy and Public Utilities (NKREKP) approved the methodology to set fee rates to connect to electricity transmission and distribution systems. Will it be possible to overcome corruption in this area?
How to connect to electricity networks in a prompt manner without nerves and bribes? The author and host of the Kolo dobrochesnosti program aired by the UA: Ukrainian radio Natalya Sokolenko will ask the BRDO’s Energy Sector head Oleksiy Orzhel and the head of the Energy and Utilities Consumers Association Andriy Herus this question.
While the country was busy smoothly getting back to the new year’s work routine, the Cabinet of Ministers prepared another victory at its meeting on January 10. There was a mini-revolution in laboratory food researches carried out as part of state control.
In the near future, both public and private laboratories will be authorized to carry out them. The state abandoned a hardline monopoly in state control and delegated certain powers to private sector entities. In such a way, it laid the foundations to create competition between private and public laboratories and reduce the cost of relevant researches. As a result, this will allow to optimize the network of public laboratories and save taxpayers’ money spent on the food safety control system.
At the same time, to minimize the risks of research falsification, the Government approved the criteria to be met by authorized laboratories (one of which is to comply with a special procedure for ensuring the objectivity of researches), as well as a procedure for inspecting activities of authorized laboratories by the state. So, another important element of the European model of food safety has been introduced!
The food industry reform is progressing well while being a kind of beta tester of innovative solutions in many aspects of the Ukrainian inspection system. The BRDO Office will continue to closely monitor and support progressive steps towards developing a risk-oriented food control model based on the European model.
In addition, the BRDO Office worked on the analysis of milk market problems (Green Paper “Milk Market Regulation”) last year and is currently working on the analysis of the meat market. In these researches, we identified delegation and empowerment of private laboratories as one of the elements of an effective state control system in accordance with European practices.
A meat market is very important for Ukraine and has great potential. However, the number of cattle has decreased by 19% and the number of pigs – by 21% for the last 5 years.
The BRDO Office launched a meat market review. A quarter of regulatory acts on the market are outdated and contradictory, and the regulation does not solve market problems. According to experts from the BRDO’s Agriculture Sector, the most important problems are the ASF spread, the complexity of animal identification and registration, meat products of illegal origin and dubious quality, the ineffectiveness of control over product safety and inadequate cooperation on the market, etc.
It’s important for us to hear your opinion to conduct the most comprehensive systematic analysis of the meat (beef and pork) market problems and their reasons and find solutions. We invite you to the Public Dialogue, fill in the form and join our consultations!