Prozorro.Sale has become an effective tool for controlling the state and municipal property market for businesses and the public. How did the platform for transparent privatization appear in Ukraine, and what changes are expected in the future?
Preventing corruption and involving citizens in the fight against it are the strategic goals of TI Ukraine. We focus on innovative solutions that help minimize corruption risks in the public sector of the economy. Such the first important anti-corruption IT solution was the electronic public procurement system Prozorro, to whose creation we contributed.
In 2016, TI Ukraine joined the development of another revolutionary system, which today is the largest platform for the sale and lease of state property —Prozorro.Sale. It is also called “eBay for the government.” Thanks to this platform, it was possible to open “hard-to-reach” data, translate all procedures into the “online” mode, and show the process of how officials make decisions regarding the sale or lease of state and municipal property.
The key result is that these decisions are no longer related to the human factor, but depend on the results of an open and transparent electronic auction, where businesses compete to buy assets. In 5 years of the platform’s existence, more than 350,000 auctions were held, which replenished the state treasury by UAH 38 bln.
It is also important that Prozorro.Sale has become an effective tool for businesses and the public to monitor and control the state and municipal property market, which is already a significant step to combat possible abuses in privatization and lease procedures.
For the first 2 years, the project was implemented entirely under the leadership of TI Ukraine, and in 2018 it was transformed into the state enterprise “ProZorro.Sale.” We continued to administer two central databases of the system until the summer of 2019. All the time we were working closely with the Ministry of Economy and the Deposit Guarantee Fund (DGF).
It was important not only to technically support and develop the system, but also to control the auction procedures for the sale of property. In order for participants to report cases of injustice or violations of their rights, 2 commissions were created to consider complaints — under the DGF and the state enterprise “ProZorro.Sale.” Representatives of TI Ukraine were also members of these commissions.
After TI Ukraine transferred all the rights to databases of the electronic trading system to the state enterprise “ProZorro.Sale,” we continued to cooperate with government agencies to improve the system and translate new markets to the format of electronic auctions. Therefore, in the autumn of 2019, we announced that the sale of property of bankrupt companies, as well as the lease of state and municipal property, should take place in the Prozorro.Sale system. This opened up even more data and therefore reduced corruption risks in previously closed procedures.
Gradually, the functionality of the service was expanded and opportunities were created for the sale of property of state-owned joint-stock companies, subsurface and unprocessed wood use rights. The option for renting land plots will be added soon.
TI Ukraine is interested in sustainable anti-corruption changes, so we continue to delve into the development of state property management reform.
Today, our team has developed a methodology for effective monitoring of privatization and lease procedures. We are also starting to work on creating a monitoring network. This will encourage the sale of non-core assets and increase the ability of the state to conduct procedures professionally and without violations.
If our colleagues from other countries are interested in using our experience in implementing this reform, we recommend that you tune in to the “long game.” The experience of Ukraine shows that the “windows of opportunity” are not open for a long time. Reforms require not only political will, but also determination, perseverance, and mobilization of influential stakeholders.
At the same time, it is important not to aim exclusively for the opposition struggle, but to learn how to cooperate with various stakeholders and be able to find compromises. After all, the viability of anti-corruption changes is an equally important result of our work.