On February 22, the Lviv City Council and the Better Regulation Delivery Office signed a Memorandum of Understanding in the development of infrastructure for EV charging stations. The Concept of EV Charging Stations Market Development in Ukraine developed by BRDO was also presented during the event.
BRDO analyzed in detail the regulation of this segment and identified barriers to the market development that cannot be eliminated at the level of secondary legislation. With a view to developing the necessary regulatory framework for the EV charging stations market and its integration with the electricity market, BRDO developed the relevant Concept. In December 2017, this document was presented in Kyiv and further finalized taking into account the proposals of market participants.
Currently, one of the main obstacles to the use of electric cars in Ukraine is the poor infrastructure of EV charging stations. The use of electric cars requires resolving a number of problematic issues related to their maintenance and service at the legislative level: creating transparent conditions of connection to electricity networks, defining the product in the market, harmonizing infrastructure and software solutions, etc.
Even though the number of electric vehicles has increased by 130 times in Ukraine during 2013-2017, only 4,960 cars of such a type were registered as of the end of last year. This is less than 0.16% of the total number of passenger vehicles. For example, in Norway, every 21st passenger car is an electric car, and in Japan – every 117th. EV charging stations, estimating from 600 to 1,500, are located mainly in central cities of the regions and do not meet the needs of owners of electric cars for a reliable and extensive infrastructure.
“Given a large nuclear generation share in the energy mix, electric vehicles could be a factor for reducing the state’s energy dependence, but it requires infrastructure development. Effective regulation will allow the market to level the load on Ukrainian IES (integrated electricity systems) and improve the environmental situation by reducing emissions. In Ukraine, the development of this sector requires creating a regulatory framework for the market of EV charging stations, so the Concept proposes its regulatory model. The next step is an resolution of the Cabinet of Ministers to implement it,” the BRDO’s Energy Sector Head Oleksiy Orzhel said during the presentation of the Concept.
In line with the Concept implementation, local authorities play a significant role. It is necessary to define topical goals on the EV charging stations infrastructure development on regional and municipal levels to be taken into account when developing and approving urban planning documents as well as create opportunities for online procedures necessary to set up and use electric charging stations. So, on January 5, 2018, the executive committee of the Lviv City Council approved the Concept for electromobility development in Lviv.
“Lviv was the first city in Ukraine where the concept of electromobility was adopted. It is important for us, because we have set very clear environmental goals, in particular, on infrastructure development. This is one of Lviv goals 2020. The next step is to develop very detailed plan of achieving these goals. Today’s event gives us additional support for the infrastructure development, and we are grateful to our colleagues from the Better Regulation Delivery Office for their contribution,” said Andriy Moskalenko, the Deputy Head on Development of Lviv City Council.
In particular, the Concept of EV Charging Stations Market Develpment suggests:
Moreover, the Concept provides for a full digitalization of the process. For example, by using a single app, any user will be able to automatically find a station, track free parking lots with electric charging units, get information on prices for related services, etc.
It is planned that the Concept will be implemented in three stages during 2018-2030. In the first stage, starting from the date of its approval till January 1, 2019, it is envisaged:
“It is very important that last year the Law on the Electricity Market was finally adopted. This is the basis on which we can introduce promising markets, in particular, the market of charging stations for electric cars,” said Lev Pidlisetskyi, the Member of the Parliament of Ukraine, who also participated in the event.
Currently, BRDO is developing a CMU’s draft resolution on approval of the Concept of state policy in development of the infrastructure of EV charging stations. According to BRDO experts, if the Concept is implemented by 2030, there will be 600 thousand electric cars in Ukraine.
The event was moderated by the Head of the IT Department of the Lviv City Council Marta Romanyak, the founder of Tesla Club Ukraine Nazar Shimone-Davida, business, public, and media representatives.
In addition, a business case “EV Charging Station”, which provides step-by-step instructions on starting this type of business in Ukraine, was created on the PRO Platform for Effective Regulation.
For information:
The Ministry of Economic Development and Trade and the State Regulatory Service initiated public consultations as an essential element of the regulatory reform to make the business rules more effective and clear and the process of their adoption – transparent and public. The independent BRDO analytical center is organizing public consultations and developing analytical materials as part of the EU4Business/FORBIZ initiative.
The State Architectural and Construction Inspection and the BRDO join efforts to find mechanisms for improving the construction sector in Ukraine. The relevant Memorandum on Cooperation was signed today.
According to the Memorandum, the purpose of cooperation between the DABI (State Architectural and Construction Inspection of Ukraine) and the BRDO Office is to determine basic principles of modernization and improvement of the regulatory framework for the state supervision (control) system in urban development, as well as create a favorable environment for conducting economic activities, developing small and medium businesses and attracting investments in construction.
In addition, the State Architectural and Construction Inspection is involved in filling the IAS SSC pilot module for planning state supervision (control) activities with content and improving it, in particular regarding publishing the information on scheduled inspections.
“Changes in approaches to construction control have long been overdue, so the DABI is examining the issue of reviewing the system of inspection functions. The basic idea is to focus not on identifying, but on preventing violations in the urban planning sector. That is, moving from a punishment vector to partnership-based activities with businesses providing maximum advisory support. Such an approach will increase the quality and safety of projects under construction as well as encourage trust between inspection bodies and Ukrainian and foreign real estate developers and the public. And in combination with effective licensing procedures, it will stimulate construction processes in the country,” Oleksiy Kudryavtsev said.
“As for the Inspection itself, the involvement in the IAS system functioning is an opportunity to plan and take decisions on the development of the state control system and determine state policies in this area on the basis of serious analytics,” the BRDO Head Oleksiy Honcharuk said. “Such an active position of the State Architectural and Construction Inspection shows that the control and supervision system is ready to be reformatted into a risk-based system and, in this context, introduce quality changes in the regulatory environment.”
National Commission for State Regulation of Energy and Public Utilities (NKREKP) has 18 days to give effect to Article 21 of the Law “On Electricity Market”. This will make electricity more affordable and simplify the connection to electricity networks. To give effect to this Article, three basic acts should be adopted:
The BRDO Office provided the NKREKP with recommendations on the implementation of Article 21 of the Law “On Electricity Market”. We initiated a #UvimknyUkrainu countdown before Article 21 comes into effect, and this period expires on March 11, 2018. BRDO’s recommendations:
The market expects miracle to happen, since if the NKREKP doesn’t adopt these decision, this will make it impossible for customers to connect to electricity networks and can stop many business activities in Ukraine.
| Index of the Doing Business rating | 2018 | 2019
If the requirements of Art.21 of the Law are fulfilled |
| Connection to electricity networks (position in the rating) | 128 | 55-56 |
| Procedures (amount) | 5 | 3 |
| Term (in days) | 281 | 132 |
| Index of the electricity supply reliability and transparency of tariffs | 6 | 8 |
| Cost (% of income per capita) | 525.2 | from 92 to 203 |
Source: abcnews.com.ua
No one is born an architect and design engineer. It is impossible to become an architect and design engineer even after obtaining a graduate degree. A certificate on a specialist’s degree can be obtained after a candidate is specially trained and has a certain experience in design and architecture. This certificate is issued by the Certifying Architectural and Construction Commission. The same commission delegated a number of its functions regarding (training for) professional certification to self-regulatory organizations.
On the one hand, empowering professional non-governmental organizations is a positive thing confirmed by the successful world practice. But on the other hand, there are some specific aspects.
Let’s start with the certification procedure for construction specialists. To obtain a certificate on a degree in design and engineering, you should meet certain criteria, among which the main ones are education and work experience as well as provide a list of documents envisaged by the Law “On Architectural Activities”. However, when you apply to a self-regulatory organization with a bundle of documents prescribed by the law, you will find out that it is not entitled to give certificates to the specialists who are not among its members. So, you are offered on a mandatory basis to become a member of this non-governmental organization while paying annual membership fees and make a liability insurance contract with a defined insurance company.
The Soviet “voluntary-compulsory” principle is applied efficiently and comes at a price, while legal gaps lead to violations of the Ukrainian legislation and create a barrier for equal access of citizens to such a state administrative service as professional certification of performers of works (services). This defect of legal regulation should be eliminated as soon as possible. The relevant draft law No.7085 developed with the participation of our experts was registered in the Verkhovna Rada in early September last year.
In addition, the professional certification of responsible contractors as a mechanism to enter the market is limited to types of works based on the requirements for buildings and facilities, as defined by technical regulations. This does not allow to meet the market needs for various specialists. For example, the Ukrainian system does not provide for the possibility to train and certificate specialists in design and engineering of construction projects according to Eurocodes, engineers-designers of internal supply lines, etc., despite the fact that such a possibility is established by the law. Consequently, Ukrainian contractors can not prove their qualification and, as a result, be legally involved in the implementation of international projects. Such an approach constrains the domestic market, hinders the export of Ukrainian high-tech services with enormous added value and does not allow our engineers to be involved in cooperation with international investors dealing with designing facilities in Ukraine in accordance with international standards.
Thus, due to the lack of desire to develop the market from those who should do it, we lose the opportunity to integrate Ukrainian design and engineering services in the modern world while giving our own market to foreign specialists.
It is interesting that in Ukraine, employees can be certified in such a way even today. This issue is regulated by the Law of Ukraine “On Accreditation of Conformity Assessment Bodies” and the ISO/IEC 17024 “Conformity Assessment – General Requirements for Certifying Bodies”. So, why do not we declare these voluntary certificates valid and enter their owners in the Register of Certified Persons?
Especially since Ukraine and Europe have reached the Agreement on Mutual Acceptance of Personnel Qualification Certificates within a partnership framework.
According to the commission’s Register of Certified Persons, there are 4,002 certified specialists in architecture and 13,807 persons in design and engineering as of January 2018. As for patriarchal approaches to training for certification, they are really puzzling. At present, there is only one method such as teaching a course. And this is in 2018! Nothing of the kind of distance learning and modern technologies!
The State Fiscal Service’s data show that the number of enterprises where architectural activities are the main KVED has been reduced threefold over the past 10 years: there were 6,566 such enterprises in 2009, and now there are about 2,060. At the same time, the country still has more or less stable construction volumes. That is, the market is becoming less competitive that also does not help to develop it.
The today’s world requires changes. The market urgently needs the expert discussion that will become a catalyst for systemic positive transformations and a driving force for development.
The BRDO Office together with the Institute of Educational Content Modernization developed a draft regulation on electronic textbooks. Educational content producers and representatives of teachers’, parents’ and scientific communities participated in the drafting.
“Throughout the world, governments stimulate innovations, creating simple and stable rules and guaranteeing fair competition. The Ministry should apply the best practices and ensure effective regulation of innovation activities in education for the wide involvement of leading technologies in Ukrainian schools,” Oleksandr Shelest, the BRDO expert and co-author of the regulation on electronic textbooks, says.
“Electronic textbooks are a new technology that can significantly enrich the pedagogical process. To get new technologies, we should give a boost to this market,” Oleh Spirin, the head of the Institute of Educational Content Modernization said.
The new regulation is aimed at increasing quality standards for educational content producers, while reducing administrative barriers to enter the market and increasing the transparency in the use of budget funds. We invite everyone interested to participate in the public discussion of the draft regulation on electronic textbooks.
The next stage is the development of procedures to examine and select e-textbooks as well as mechanisms of state financing. The work is carried out as part of the Concept of the National Educational Electronic Platform.
The architecture and building design market is the basis of the construction industry with a volume of more than 1 billion UAH per year and high added value. This sector requires highly skilled specialists along with the introduction of modern technologies. However, outdated systems of training, certification of specialists and technical regulation hinder the development of the market in Ukraine.
The state, business, and public representatives tried to find the ways of resolving the market problems at the Roundtable “Competitive Architectural and Building Construction Industry in Ukraine – Integration with European Standards” on February 15. The event was organized by the Better Regulation Delivery Office and the Union of Architects of Ukraine with the support of EU4Business/FORBIZ as part of the #PRODialogue Public Dialogue.
22 Ukrainian universities train specialists in architecture and urban planning, and 42 universities – project engineers. At the same time, no specialists are trained and certified in many demanded areas, in particular, in design and engineering of utility systems and engineering according to Eurocodes.
Unregulated competencies of self-regulatory organizations, to which functions of preparing specialists for professional certification were delegated, provoke the appearing of additional requirements, which are not stipulated by law. For example, only members of relevant self-regulatory organizations can obtain their professional qualification, and this creates a barrier for equal access to administrative services and increases business costs.
“The architectural sector requires significant investments and modern approaches. Today, the design engineers and architects in Ukraine are very poorly paid, and the level of their wages is the lowest in Europe. It is necessary to work on ensuring that promising Ukrainian specialists are in great demand and have fair wages in Ukraine, so they won’t go abroad to work,” Lev Partskhaladze, the Deputy Minister of Regional Development, Construction, and Housing of Ukraine, said when opening the event.
According to the BRDO’s analytical research, 8 of 36 regulatory acts in the architecture and building design market are illegal and 18 of them should be revised. “The current regulation provokes corruption abuses by regulators, creates barriers for market participants, unreasonably complicates the procedure of finalization and approval of design documents and does not ensure copyrights protection. Since 2009, the number of enterprises in the Ukrainian architecture and building design market has decreased threefold, and now there are about 2,060 enterprises,” said Olena Shuliak, the Head of Construction Sector of BRDO.
Another problem is the unregulated procedure of approval of design documents for construction projects with the involvement of budget funds, funds of state, and municipal enterprises. The cost of such projects should be approved by executive authorities according to outdated standards that leads to the artificial non-market reduction in the tender value of such works and poor quality of finished construction projects.
In general, the market is characterized by low prices for design and engineering works. For example, in Ukraine, the share of design and engineering works in the total cost of construction is on average 1.5-2%. In comparison, in France, it is 8-13%, and in the UK, it amounts to 10-17%. “Today our market is characterized by technological backwardness. Architects are poorly paid and, accordingly, this affects the quality of their work. We have virtually no system of state orders for design and engineering,” emphasized Volodymyr Husakov, the President of the National Union of Architects of Ukraine.
Maksim Nefyodov, the First Deputy Minister of Economic Development and Trade of Ukraine, paid attention to creating the competitive environment in the market. “It is obvious that high quality architecture is more expensive than the poor quality one. In Ukraine, the demand for high-quality design and engineering services is in prospect. So, it is very important to create the competitive environment that will boost the development of the market,” he said.
In addition, the regulatory environment is burdened by numerous obsolete and unfinalized rules. For example, the Law of Ukraine “On Regulation of Urban Development” stipulates that design documents for construction projects, which are developed according to urban planning conditions and land development restrictions, do not require any approval of government and local authorities. However, provisions of a number of other legislative acts require the finalization of construction projects prior to their approval.
Oleksiy Kudriavtsev, the Head of the State Architectural and Construction Inspection of Ukraine, said that there would be qualitative changes in approaches to state control after the reform of permitting procedures in construction. “The strategy of reforming the system of state supervision (control) was approved by the Government. In this context, we are working on the possibility to revise inspection functions of state architectural and construction agencies and introduce phased review of construction works. As the Strategy states, the basic idea is to focus not on identification of violations, but on their prevention. That is, moving from a punishment vector to maximum business advisory support,” he said.
According to the BRDO, the sustainable development of the architecture and building design market requires taking the following steps:
The event was also attended Viktor Shyryiaiev, Chief Architect of the MISKTZYVILPROEKT LLC, Oleksandr Chyzhevskyi, Director of the UKRNDPITSYVILBUD SE, and representatives of business and expert community and the public.
A lack of systematic and consistent legal policy, poor legal decisions based on political expediency as well as other weak points of the regulatory process resulted in real regulatory jungles that appeared in our country.
Even according to rough estimates, there are currently hundreds of legal acts setting certain requirements for doing business in Ukraine. If we divide these acts into specific requirements, their number will amount to thousands. It is often difficult for a business to realize what the state requires. In this context, the worst thing is that often even inspection bodies themselves can not explain requirements, the compliance of which they should control. A sea of requirements creates an ocean of misunderstanding, in which both the state and business can drown.
Obviously, there is a need to conduct a full inventory of state requirements for businesses as a kind of spring-cleaning of the regulatory environment. How should this happen?
As part of the discussion on a new methodology of developing unified forms of inspection acts, we propose every inspection body to make a list of all legislative requirements it controls in its area before approving this form. In this case, they should specify the following aspects for each requirement:
As a result, there will be a legal regulation map for each area of state control. This document will be the basis to develop unified checklists as well as create a mechanism for assessing the effectiveness of each legislative requirement by using IAS tools.
Source: epravda.com.ua
Why is it difficult and sometimes impossible to start a business in Ukraine, and why do businesses refuse playing by the state rules? (In Russian)
A Ukrainian should collect 53 documents to start, for example, such a business as a “coffee stand”. For this purpose, the entrepreneur needs to go through 20 procedures and get 19 documents.
In fact, this is even not a full list. The one described will be only in case of registering a land plot lease and installing a cash register by your own.
According to Aleksey Goncharuk, the BRDO Head, it is difficult to open a business in Ukraine legally: sometimes it takes years, and in some cases, it is even impossible to start a business.
“A large number of entrepreneurs do not comply with the state rules, because these rules are not clear. The state simply forgot for whose well-being it exists. It forgot that its function is to provide people with quality services,” Goncharuk emphasizes.
The ‘Economichna Pravda’ offers to discuss several examples to understand how difficult it is to start and conduct a business legally today.
Ukraine has mostly ‘not free’ economy
Today, Ukraine ranks 76th in the Doing Business rating. “This is a rightly low position,” Goncharuk said. “It’s bad for a European country.”
Belarus, Moldova, Georgia, Kazakhstan, Russia, Poland and Estonia outrank Ukraine in this rating. Since 2012, our country has significantly improved its result, but it has performed poorly over the last three years.
Our position is much worse in the Index of Economic Freedom. We rank 150th in 2018 – between Cameroon and Sierra Leone. We are among the countries with mostly not free economy. Our positive progress is poor.
What does a small business think about the business environment?
Evgeniy Elizariev, the co-owner of the Kiev ART Éclair confectionery. “Tax agency is everything.”
In total, Elizariev spent 3-4 months to register his business on paper. He collected most of the documents in the process of conducting a business. In general, all paper procedures took a year. The business co-owner dealt with some procedures personally and gave a special outsourcing company complete control over the rest of procedures. Its services cost 4-5 thousand UAH.
“It would be better for a person who wants to conduct a business to let the professional to do this work, so it will allow to not waste time and not lose the heat in doing your business. A business owner should think about expanding his business and not about getting some bureaucratic pieces of paper,” Elizariev tells us about his experience.
He says that the main thing is to register in a tax agency. Everything else can be done in the process, because business inspections are currently prohibited.
“Honestly speaking, today Ukraine has the most favorable conditions to start a small business since I can remember. There are no problems to register,” the entrepreneur says.
“Most difficulties are related to the tax agency. It requires a lot of paperwork to be done and some outdated accounting report forms, which small businesses do not need at all. Social insurance services take the second place in terms of the difficult interaction. You will face with this problem when hiring people. But the tax agency is everything,” he adds.
Registration of a cash register in Ukraine. Eight circles of bureaucracy.
A private kindergarten co-owner. “Officials should understand what kind of services they provide.”
“I’ll tell you an anecdotal case,” the entrepreneur says asking not to be named. “Today, if you look at the procedure for obtaining a license to open a private kindergarten, there is the State Sanitary and Epidemiological Service, the Main Directorate of the State Emergency Service and the State Labour Service. We call the State Labour Service and ask whether it provides a certain document? They answer that they do not know.
You can call every of 60% of their phone numbers and no one on the other end knows that they should issue this document. The State Labour Service’s website states that they issue documents related to hazardous work, for example, underground, blasting or high-rise operations. In these cases, it is important. But I do not understand what documents the State Labour Service should provide to a kindergarten.
I even had a conversation with them. They said that I should gain insight in the situation and explain that they can not issue any documents for my business. What is this supposed to mean? It seems there should be such types of documents. That is, the department and its employees should understand what services they provide.
So, of course, if we want to develop our business, the entire regulatory framework definitely should be updated, revised and simplified. To my mind, officials should set a task for themselves to remove unnecessary requirements this year.”
Stepan, the owner of a coffee house in the center of Kiev. “Business is working, and it seems that there are no reasons to complain about authorities.”
Stepan’s coffee house
“I opened my first coffee in an apartment house. I rented a premise and employed a worker. This required to collect about 10 documents. But when I decided to open a mobile coffee house, this business was crazy.
Firstly, there were huge prices for renting a corner. If you want to buy a corner near the Golden Gate officially by auction, you need to pay 260 thousand UAH per year. It is nothing less than madness to pay such a price for 3 square meters of land where just one person will work.
Secondly, it is not allowed to buy a place where people may want to drink coffee, since they (Kiev city authorities – Ed.) call it a recreational zone.
A municipal enterprise “Miskyi magazyn” sells these places. If you do not buy their place, you are not allowed to install your stand in the city. Otherwise, tow truck services come. These tow truck services are real raiders. I had a situation when 10 masked men came, beat my seller, put him in their car, and my vehicle, which is my private property, was put on their tow truck and taken away without any court decision. My acquaintance helped me to get my vehicle back from the impound lot. But usually, if they took something, they would never give it back.
The ME “Miskyi magazyn” regularly reports on confiscation of illegally installed mobile shops at night on its Facebook page
In this case, if you call the police, they ask whether it was an ordinary vehicle or a mobile coffee house. If it is a mobile coffee house, they hang up on you. Now I rent a MAF, and I would not say that I have problems. My business is working, and it seems that there are no reasons to complain about authorities.”
Why is difficult to conduct a business legally in Ukraine?
While Ukrainian entrepreneurs see state obstacles to businesses in a fragmented way, the BRDO Head Aleksey Goncharuk analyzes all aspects of the problem.
According to Goncharuk, it is not easy to open a business in Ukraine because we have constantly changing currency exchange rates and there is the war on the territory of our country as well as because our state remains the post-Soviet ideology. Ukraine has a lot of archaic procedures, which should be eliminated.
BRDO. The Better Regulation Delivery Office (BRDO) is a non-governmental organization established on the initiative of the Ministry of Economic Development and Trade and funded by Western institutions. The BRDO’s goal is to improve the effectiveness of legislative regulation in Ukraine.
The EP talked with the BRDO Head and highlighted 10 most important points.
Aleksey Goncharuk, the BRDO Head
Most of business owners do not comply with the rules that the state establishes. For example, only two of all private kindergartens working in Ukraine agreed to speak with the BRDO on condition of anonymity. They shared their experience of going through “7 circles of hell” to open a business related to “private kindergartens”.
Therefore, it is fair to assume that businesses, as rule, mimic, simulate, make arrangements with officials at the local level and do everything possible to avoid participating in all these circles of hell.
Business owners make arrangements with local officials, because nobody understands the state rules on conducting various types of business. And this is the main reason why business owners refuse to reveal a real story of its opening and talk publicly how it is currently operating.
Reducing a number of documents for doing a business is their direct task. The activity of the Ministry of Economy should be focused on creating a comfortable business environment. And it is a rhetorical question whether we have a comfortable business environment today.
We regularly participate in special deregulation sessions of the Cabinet of Ministers. About 800 documents have been cancelled in the last two years. The process is on, but it takes time.
It’s easiest way to burn all documents with napalm. But it does not work. The state should have a mechanism that will protect you, for example, from poisoning with bad food in a restaurant.
The second area of our task is to establish automatic data exchange between electronic registries of government entities. Now the State Agency for Electronic Governance is working on resolving this problem.
My main message is that there is no ideology of client-oriented approach in our country. The state forgot for whose well-being it should work. This should be changed. Relationships between the state and businesses, the state and individuals should be based on business and individual needs.
Businesses and people should be comfortable, so they will happily observe the rules while being proud of it. Because the 21st century is the time of reputational economy.
Today it is advantageous to be a wonderful “white” company publicly. In Western countries, it has long been a matter of survival. A “black” or “grey” company will never get a loan there, and key players will never make contracts with them.
To make a reputation a real value in Ukraine, the state should become a very friendly service organization.
Many things can not be changed without making amendments to the law. But to obtain a parliament’s approval is a real piece of work. There are at least several dozens of appropriate draft laws that could greatly simplify business regulation waiting for the Parliament’s consideration.
UNIAN
According to our preliminary estimates, every third subordinate document in Ukraine is illegal.
According to my estimates, it is difficult to start a business legally. There is no problem to open a private enterprise or register a legal entity. But it is a significant obstacle when you are going to collect necessary documents. I know more than a dozen people who gave everything up just having started to collect the documents.
Someone began to work illegally, while others decided to be employed. And this is bad, because we need to develop the entrepreneurship culture. We need to stimulate the business development. Now we are far from this ideal.
Depending on the type of business, it takes years to collect some documents officially. Sometimes it is even impossible to collect all the “pieces of paper” legally. Very often, we have conditions created accidentally or specially, when it is almost impossible to get a document.
The European Union, which we look up to, has a simple principle. It implies that when creating rules, one should think how easy it would be for small and medium-sized businesses to comply with. Because otherwise large businesses will find lawyers and money and achieve a success, while small and medium-sized businesses will simply refuse to conduct business.
The 76th position in the Doing Business ranking for 2018 is bad. But we developed a draft law No.6540 together with the Ministry of Economy in the spring of 2017. It was registered in the parliament. If it is adopted, many targeted changes will make the life of business owners easier. Ukraine have all chances to take the 25th or the 40th position in the rating.
In 2018, our priority is to reform the inspection bodies. We gathered more than 50 inspection bodies in one information system. And soon we will create an exhaustive list of inspectors’ requirements for each type of business.
Source: 24tv.ua.
Construction on bones, in protected areas or even in a main gas pipeline area is a common practice in Ukraine. Someone blames greedy developers, while others – corrupt authorities. In addition, experts say that another huge problem is a lack of urban planning documentation of settlements.
Ukrainian cities and villages are still using general plans, which have been already outdated 20 or even more years ago. For example, a general plan of one of the villages in Zaporizhia region is dated 1965. It looks just as such – like a plan of ancient Troy’s excavations. And that is the document defining basic lines of development, planning, construction and use of the village’s territory.
Unfortunately, this is not the only case. Experts of the Better Regulation Delivery Office say that 64% of existing territory planning schemes, which are a type of urban planning documentation, were developed in the days of the Soviet Union.
Is it appropriate in 2018 and what does this situation practically lead to? The experts and, in fact, those, who should take care of eliminating such examples were asked about this.
There is nothing to open in open data
Since last May, all urban planning documents, which include territory planning schemes and general plans, have gained the status of open data.
However, it turned out that there was nothing to open, because one-third of settlements, for example, have no general plans. The ones available are mostly “unreadable”. And as the Construction Sector Head at the Better Regulation Delivery Office Olena Shulyak said, to find them is quite the challenge, since they are published on hundreds of websites of local and village councils, state administrations, etc.
The expert says that to improve this situation in some way, the BRDO Office launched the Participatory Spatial Planning project last autumn, and the pMAP portal, where all active links to existing information on urban planning documents will be collected soon, is currently functioning in the test mode.
While collecting and analyzing the information, we have identified a lot of problems that have a direct impact on the city and village life and are related to urban planning documentation. For example, this means the planning of landfill sites (landfills to store municipal solid waste (MSW). As Olena Shulyak said, it turned out that village councils had already allocated the land, and it was very difficult to provide a land plot for this purpose, so only the development of territory planning schemes could help.
Neither spontaneous landfills nor investors
Oleh Kryvtsov, the chief architect of the Sumy region, also says that updated urban planning documents could become an effective tool to solve an acute waste management problem. He estimated that now more than 90% of landfills to store municipal solid waste (MSW) located in his native Sumy region were not included in the urban planning documentation.
“There are many spontaneous landfills, but even the “legal” ones were not included in territory planning schemes of districts. This led to the fact that a local landfill near the Lebedyne village is located dangerously close to the main gas pipeline,” Kryvtsov said.
“The situation with burial grounds for cattle, which are not included in the plans, is also difficult. As a result, no one takes into account sanitary protection zones when planning the residential development. These violations of state building codes can lead to an emergency,” Kryvtsov said.
The architect also admits that a vast majority of urban planning documents is extremely outdated and does not meet the requirements of the current legislation. Like no one else, he is aware of the consequences of such a situation.
According to Kryvtsov, today settlements of the Sumy region, without considering the cities of regional importance, are provided only with 49.6% of urban planning documentation. And 70% of this documentation was developed before 1992. Such a situation badly affects not only the development of the region, but also its investment attractiveness.
“Recently, we had an unpleasant experience, when a serious investor would like to build a bioethanol plant in one of our villages. But when he learned that the general plan was outdated and it was unknown for how long he would have to wait for the development of the new one, he changed his mind,” Oleh Kryvtsov explained.
However, there are also some positive examples. In particular, a new general plan allowed the Sumy city to raise over 16.8 million euros in the construction and equipping of the baby food packaging factory “Hualapak Ukraine”, which started operating last year.
Olena Shulyak said that the lack of general plans was a brake not only for foreign investors, but for our own domestic investors as well. “Some enterprise would like to expand its capacity through the reconstruction or new construction, but it will be refused without a general plan. That is why both foreign investors and domestic businesses are ready to deal with the cities and villages that have updated urban planning documents,” the expert says.
The availability and accessibility of urban planning documentation greatly simplifies and reduces the time to register land documents, obtain technical specifications and output data for the design, construction and commissioning of facilities. But if a general plan is outdated, then investments can be compared to a blind bargain, because the outdated general plan may not correspond to the actual situation, and the construction project implementation may face with the problems that investors have no idea about.
For example, outdated general plans do not include the utility networks installed after their development. This leads to the fact that land plots are allocated for residential development in protected zones of utility lines or sometimes even directly on them.
“Near Sumy, ATO participants were provided with land plots in the protected zone of the main high-pressure gas pipeline. This circumstance was known after the decision was made. Now this is the pressing problem. If the Sumy region had a modern territory planning scheme, this could have been avoided,” Kryvtsov provided a vivid example.
The money makes the rules
Experts say that a lack of funding for local programs on the urban planning documentation development as well as programs on the creation and maintenance of an urban planning cadastre is a main problem of updating the documentation.
Oleh Kryvtsov believes that territorial schemes and general plans should be developed solely at the expense of local communities.
“Yes, there are the cases when the business pays for the development of general plans. But it often happens the way as in the saying – he who makes the money makes the rules, which in reality can turn into a dictate of business interests and ignoring the needs of communities. Therefore, it is very important that local self-government authorities take the initiative and provide funding,” Kryvtsov says.
Olena Shulyak also believes that local authorities can and should take on the responsibility for the development of updated urban planning documentation. The question is in the proactivity of these authorities themselves and the community that elected them.
Olena Shulyak said that the experts have collected all information on the pMAP platform as it is presented in web resources in the regions for now. But they hope that in the future, the regions will be involved in this initiative and change the situation for the better together. For this purpose, common standards on graphical and text content of this documentation are being developed now. In addition, they began to create profiles for the regions to allow local specialists publishing their information there in a single format independently. The Sumy region became a pilot region, and we hope to make sure in the near future that everything is possible if desired.
By Yanina Tkachuk
Ukraine has committed itself under the Association with the EU to harmonize national standards for construction products with European ones in accordance with the EU Regulation No.305/2011. The implementation of provisions of this regulation in the domestic legislation should be completed by 2020.
With the purpose of accelerating the process and involving all stakeholders, a working group consisting of representatives of the Verkhovna Rada Committee on Construction, Urban Development, Housing and Communal Services, heads of associations and professional associations of construction materials manufacturers was set up at the BRDO last week.
Participants of the working group discussed the issues of inefficient market surveillance mechanisms and analyzed in detail the draft law No.7151 “On Basic Requirements for Buildings and Facilities as well as Conditions to Place Construction Products on the Market” that can become the basis to implement the Regulation No.305 at their first meeting. Its main aspects are aimed at harmonizing the conditions to place construction products on the market.
However, the draft law does not fully take into account the market participants’ interests and is not fully based on their experience. In particular, in terms of the development of trade relations with the EU.
During the discussion, the market representatives noted that taking into account the developments of Ukrainian manufacturers regarding the export of construction materials to the EU and the practical understanding of their needs as well as weak points of the existing regulation would allow to create favorable conditions to develop this sector. In addition, it will increase the competitiveness of Ukrainian goods and achieve a balance of consumer interests (safety of goods) and manufactures.
According to the results of the meeting, it was agreed that in the near future, market participants would prepare a number of proposals for the draft law that should be considered and taken into account in the second reading of the draft law No.7151.
In addition, participants noted that it is necessary to amend the Laws of Ukraine “On Standardization” and “On State Market Surveillance and Control of Non-Food Products”.
The Better Regulation Delivery Office will continue to serve as a platform for future meetings of the working group and will actively engage in discussing with its expert position to turn the draft law into a really useful and understandable instrument to regulate the market of construction products after its adoption by the Verkhovna Rada.
The full list of working group’s participants is attached.
The Government approved amendments to the Resolution No.1081 prepared jointly with BRDO experts to liberalize the market of interregional bus services and make it official.
In Ukraine, 70-80 people die every year and another 800 people are injured because of dangerous buses. This is a risk not only for bus passengers – pedestrians, cars and all the vehicles driving along the road are threatened. And this danger is not justified, because most of the market is in the informal economy, so honest businesses can not earn. The size of the illegal transportation market is 2.74 billion passengers per year, which is twice as much as the population of China.
What was the problem? Under the current system of tenders for routes, a carrier who won feels like a monopolist for 3-5 years. On the other hand, official carriers need more time to respond to the rapid changes in passenger flows, and illegal carriers take advantage of this situation.
What will the amendments to this resolution bring? The market will be liberalized. The key aspect of amendments to the resolution of the Cabinet of Ministers No.1081 is to remove restrictions on the number of bus lines, introduce the possibility of forming routes on the initiative of applicants. Local self-government bodies will be able to order transportation services, that is, to arrange transportation of vulnerable social groups under tariffs they defined.
What do we finally get? It will be safer to travel by bus, a share of legal interregional bus services will increase from 50% to 90%, the quality of services will be improved in a competitive market and tariffs will decrease to economically justified ones.
Journalists of the website “24” found out what problems were planned to solve in the Ukrainian economy that year and to what extent those plans were optimistic in the view of economists.
At the government meeting on January 31 this year, “Draft Laws 2018” were presented on behalf of the Prime Minister Volodymyr Hroisman. The Cabinet of Ministers promised that the main focus would be on economic growth. At the same time, the GDP growth is projected at 5-7%. The Head of the Government states the following main business problems in this document: pressure on businesses, barriers to access to public resources, burdensome regulation, lack of innovation support and limited access to funding.
Therefore, the Cabinet of Ministers promised businesses to ensure the protection of rights, transparent access to public resources, deregulation and improving the business climate, encouraging innovations and facilitating access to funding.
35 draft laws have been drafted for this purpose, and the fate of the Ukrainian economy depends on their adoption.
It should be noted that prepared 35 draft laws targeted at economic growth is definitely a positive fact. But these initiatives should be adopted by the Verkhovna Rada to make the plan effective.
The website “24” asked experts what draft laws they considered the key one and what the chances of implementing the action plan were.
Pavel Kuhta, the Deputy Head of the Strategic Advisory Group for Supporting Ukrainian Reforms:
“All these draft laws can be broadly classified into 5 groups: the ones aimed at protecting business rights, a series of deregulation initiatives, which get the business environment under control, access to funding – as a separate topic, access to public resources and encouragement of innovations.
In terms of protecting business rights, this is the aspects related to the interaction of businesses and control and law enforcement agencies, the creation of a financial investigation service designed to bring together the activities on investigation of economic crimes in one analytical service, this is the law of the business ombudsman, which institutionalizes this concept, and the laws on the responsibility of inspection body officials. The second category of draft laws is related to the customs: a “single window” at the customs, a reform of environmental and radiological control.
The biggest deregulation initiative is the Law on Doing Business aimed at increasing Ukraine’s positions by 30-40 points in this rating. If it is adopted by the end of May, there will be a significant leap in the rating this fall. Another interesting initiative is the so-called de-communization of legislation, when acts and laws of the Ukrainian SSR, except those stipulated by other Ukrainian laws as necessary, cease to be effective. For example, we have the USSR Labor Code, but it is necessary, it will effective until there is a new one. Other laws, which are not stipulated, automatically will no longer be valid, and all those outdated legislative regulations of 1940-50s will disappear.
In addition, deregulation initiatives include the law on currency control, which reforms a very outdated system of currency control, the law on deregulation of cash registers to make them demonopolized.
As for the access to investments, it is a set of laws, which, by the way, are included in the text of the MIF’s Memorandum and related to regulating credit activities. In Ukraine, there is a chronic problem related to the fact that nobody repays credits, so banks do not provide credit financing and, therefore, the economy is stagnating. Accordingly, this is the law on protection of creditors’ rights, the bankruptcy law, which will allow collecting debts from bankrupts instead of stealing money through bankruptcy procedures, the law on credit registry and greater monitoring of credit repayments. There are also the laws on new financial instruments – the establishment of corporate management in state-owned banks.
As for the access to public resources: the law on concessions, that is, the private sector access to public-private partnership in infrastructure; the law on the lease of state property through the Prozorro system, which is an interesting and effective initiative.
As for the promotion of innovations, it implies providing support for start-ups, increasing the protection of property rights and copyrights, introducing the possibility of using electronic money, for example, to pay utility bills.
These 35 draft laws have been already submitted to the Parliament, considered and some of them even adopted in the first reading or are at the final stage of development. They are draft laws more or less prepared to be considered and adopted this year, and most of them – even in the first half of the year, so there is such a thesis as “spring of reforms”.”
Oleksiy Honcharuk, the Head of BRDO:
“Each of these legislative initiatives makes good sense. To my mind, there are three principles aspects.
The first one is establishing a financial investigation service and, accordingly, creating conditions to protect businesses from being pushing around by tax authorities. I do not think that it should be explained why it is important for business to transform tax inspectors from a security service coming with assault rifles and making everyone lying face down on the floor into an analytical agency. This is a critical initiative. There is something to improve, but in terms of the importance of initiatives, this one certainly has top priority.
I would put creating conditions to attract investments as a matter of secondary importance. There is the draft law 6540 that can significantly move Ukraine in one of the most important world rantings – Doing Business – by dozens of positions up. This will attract the attention of world investors to Ukraine and will be a strong signal that Ukraine is changing as well as a good reason to invest here, and not anywhere else. Only this is not enough, but it is an absolutely necessary and important component. Ukraine requires investments, including from abroad, to have the economic growth and create new jobs. This draft law will provide an understanding that our country is changing considerably in terms of ease of doing business.
The third initiative, which is extremely important, is the de-communization and the change of a principle that Soviet legislation still applies. One of the main problems of our country’s efficiency is that we still have the Soviet model of the planned economy regulation, and the state intervenes in areas, where it should not, too much. At the same time, we have the undeveloped market model. There is the small draft law 4650 to eliminate the remnants of many Soviet systems both in labor and residential laws and overcome this array of planned regulation holding us as an anchor. It will allow to put an end to the 90s legal framework, under which all Soviet laws that have not been replaced with the new ones work. There are many similar cases and they restrain the development of the economy. It should be changed.
Moreover, there is a number of other important initiatives: liberalization of currency legislation, a step towards energy independence, the draft law 3096. In fact, we can discuss each draft law and explain its importance.
Whether all these draft laws will be adopted – this is a matter of leadership of the prime minister. He said that he would support and take on this task, and this is an important factor. But 35 draft laws are an extremely ambitious goal, and the prime minister won’t be able to pay attention to all of them. If there were 10 draft laws, I would say that 70% of them would be implemented. But if 10-15 of 35 draft laws will be adopted, then it will be a big win.”
By Yanina Tkachuk
Source: 24tv.ua
The National Commission for the State Regulation of Communications and Informatization has sold frequencies for the development of 4G technology in Ukraine. Now mobile operators, which bought them, have every opportunity to implement this mobile internet standard.
Moreover, the state budget of Ukraine will receive about 2.5 billion hryvnas as a result of selling the 4G license.
Who shared the trophy?
The following three leading Ukrainian mobile operators bought frequencies for 4G: Lifecell bought two lots of 30 MHz in total for 909.25 million hryvnas, Kyivstar bought three lots of 30 MHz in total for 916.3 million hryvnas and Vodafone-Ukraine – two lots of 20 MHz in total for 631 million hryvnas.
Differences of 3G and 4G
Let’s remind you what the difference is: this is the connection speed. In theory, 4G mobile Internet is10 times faster than 3G. However, experts say that in practice, the difference will be 4-5 times, which is also not bad.
If more clearly, 4G will allow, in particular, playing online games online games of any complexity and using full-HD multimedia Internet content without any hassles.
Another fact to compare their speeds: 3G network bandwidth is 3 Mbps per second for fixed users and 384 Kbps – for mobile users (in transport), while 4G should provide 100 Mbps for mobile users and1 Gbit for fixed users.
Who and when will launch 4G
As Oleksandr Kubrakov, the IT and Telecom Sector Head at the Better Regulation Delivery Office explained in the interview with the “24” website, when operators launched the 3G standard, they installed many fiber optic lines, so now the core network is prepared to a greater or lesser extent. When installing 3G equipment, a significant number of base stations with 4G-ready equipment were installed as well. So, when licenses are already received, 4G can be introduced in many regions fast enough.
Although Kubrakov reminded us this fact, but we have seen the introduction of 3G, and it didn’t appear in a moment, but in one city after another. Probably, the same situation will be with 4G.
However, for example, Kyivstar has announced its plans to launch 4G in the first half of 2018: the mobile operator has already prepared its network to launch a new generation of mobile Internet at 1800 MHz and purchased additional500 base stations for 4G on 2600 MHz frequencies, the auction for which was held on January 31.
As the Vodafone Ukraine website stated, the operator is ready to launch the 4G network technically, and it is planned to launch 4G in the big cities first in the end of March and in the beginning of April. Vodafone promises the full coverage in June.
Lifecell has not announced any start date.
How to connect 4G
To do this, you need to have appropriate gadgets that support the 4G standard and a SIM card with such “functions”. All mobile operators in Ukraine already sell USIM SIM-cards that support the new standard of communication.
For Kyivstar subscribers, there are special codes that will help to check:
– whether your SIM card will work on a 4G network. Dial the code *245*4# and call;
– whether your mobile phone supports 4G – dial the code *245*5# and call.
In some models of smartphones with 2 SIM-cards, only the 1st slot “is able” to work with the last-generation network. To find out whether your phone has such a limitation, you need to pay attention to the marking of slots on a mobile device and, if necessary, put the SIM-card in the appropriate slot.
By Yanina Tkachuk
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Connecting to electricity networks is a problem for Ukrainian business. This is confirmed by the Doing Business rating, in which this indicator is also taken into account.
BRDO experts analyzed the retail electricity supply market last year. We not only reviewed the connection problem in detail, but also proposed effective mechanisms to resolve it, as outlined in the White Paper “Regulation of the retail electricity market. Main optimization directions”.
One of them is an online map of Oblenergo’s electricity networks. It should include today’s transmission lines derived from google maps. This will allow anyone to know if their facilities are located in the standard (in 300 meters from networks of an electricity transmission company) or non-standard connection zone.
Such public information will simplify the planning of activities for customers who would like to connect to electricity networks and ensure the transparency of relationships between customers and monopolists.
Does the business and expert community consider such an initiative currently important? We will be glad to get comments and suggestions for cooperation.