Last year, the country’s leaders identified large-scale privatization as one of its key priorities. However, instead, 2020 began with large-scale quarantine, which led to a significant decline in business activity and a slowdown in the economy.
In such circumstances, it seemed impossible to achieve the goals of privatization. However, thanks to the coordinated actions of the State Property Fund of Ukraine team and external experts of the Sustainable Investments Office, the country managed not only to automate and boost small-scale privatization, but also to overfulfill the state budget revenue plan. And this is when large-scale privatization has not started due to a legislative ban.
Naturally, we had no idea of such possible obstacles, when in 2020 we responded to the request of the SPFU leaders and supported their initiative to create a team to support reforms. Then the new team of managers of the Fund increased the pace of its work, and so it needed the systematic help of qualified experts. Unfortunately, there were not enough such experts among the SPFU employees.
That is why the Sustainable Investments Office (SIO) was created to help the State Property Fund achieve its strategic and tactical goals.
That is when the stars aligned for us. One of TI Ukraine’s priorities is to increase the transparency of state property management. After all, we believe that with the political will of the institution’s leaders, civil society should help implement those goals.
The SIO was created to strengthen work in areas where the Fund has insufficient internal institutional capacity. For example, to involve specialists in such tasks of the Fund that have never been envisaged in state bodies before.
Currently, the SIO employs more than 30 specialists in various fields, namely business analysts, HRs, project managers, SMMs, etc. All these people are highly qualified business experts that the SPFU cannot afford, especially in the context of budget cuts for officials due to the pandemic. Thanks to the SIO, such specialists pass their knowledge and experience to officials during joint work.
In addition, the SIO is designed to help the Fund focus not only on its day-to-day tasks, but also on achieving medium- and long-term goals. Project planning and clear efficiency indicators allow not to get stuck in bureaucratic processes, but still move towards the planned results.
The office is supported by both Ukrainian and international partners, including the British Embassy in Ukraine and the United States Agency for International Development. Under such a model, support for the SIO is completely transparent and accountable, as financial control by international donors is stricter than (unfortunately) the one by Ukrainian taxpayers in terms of money they pay to the budget.
And all these efforts have already paid off! Looking back on the Fund’s achievements in 2020, we see that the success has been made possible largely due to the work of SIO experts.
Nevertheless, the most important task of the Office today is to ensure the transformation processes in the Fund and build its institutional capacity. Therefore, it is necessary to mention some important achievements of the Office’s first year of work.
1) Due to the efforts of the HR team and the introduction of new approaches to working with staff, communication achievements and a number of other innovations, currently the call for openings in the Fund amounts to 40 candidates for a place. Therefore, the SPFU leaders have the opportunity to select the very best to its team.
2) SIO’s IT specialists have introduced digital technologies into the Fund’s work, which are innovative even for the business environment. Many processes related to accounting and other operations with state property have been automated and, accordingly, significantly simplified. And, in addition, it is easier to manage them! SPFU employees have already been trained and independently administer the developed systems; a separate unit within the institution has been created.
3) The Fund has introduced a completely different approach to working with data. This result is closely related with the previous one, after all, because of digitalization, information about the goals and achievements of the SPFU is now accessible to everyone. In this way, the Fund can quickly identify flaws in its work and fix them, evaluate the effectiveness of certain units, and so on.
Apart from that, SIO analysts work with a huge amount of data on various state property, thousands of assets in different parts of the country, and often state bodies are unaware of their condition or even existence, even though that is to whom these objects belong or belonged before. The Office’s experts help the Fund to identify and solve problems with accounting and other activities with this property. Again, the Fund’s staff are actively taking over the skills to manage this data.
4) The SIO has introduced a project approach in its work and, consequently, in joint work with the Fund’s units. This means that there is a good chance that when the Office is disbanded, the skills and opportunities to apply this approach in work and management will remain within the institution and ensure the continued success of its work.
Undoubtedly, all these achievements would not have been possible without the support of international partners, in particular, the British Embassy in Ukraine and the United States Agency for International Development. Their participation, among other things, helps the SIO to be completely transparent and accountable, and everyone can easily learn as much as possible about its work.
Thus, thanks to the above-mentioned achievements of SIO experts, the State Property Fund managed to show impressive results in 2020. The budget received more than UAH 3 bln from the privatization of various state assets, and the value of assets has tripled on average due to the introduction of transparent auctions. More than UAH 1.3 bln from the lease of state property has been transferred to the budget. At the same time, again, thanks to transparent auctions, the growth of the rental rate amounts to over 80%.
The Fund has even bigger plans for 2021. On March 30, the Verkhovna Rada finally passed in the second reading a draft law to unblock large-scale privatization, and the document is awaiting the signature of the speaker and the president. And if the parliament also supports the amendments to more than 27 laws in the field of state property proposed by the MPs together with the SPFU, a number of bureaucratic obstacles will be removed and the transparency of the privatization process in particular and the Fund in general will be increased. Thus, this year the Fund plans to replenish the state budget with privatization revenues of over UAH 12 bln.
Our team is optimistic that despite all the complexity, unpredictability and often lack of appreciation of the work, the team of the Sustainable Investments Office and the State Property Fund is confidently moving forward, planning further victories, preparing to repel the next attacks of dishonest businessmen and officials. Therefore, for its part, TI Ukraine is ready to support them in increasing the transparency of state property management and the work of public authorities in general.