Thirty years ago, on August 19, 1991, the State Property Fund of Ukraine (SPFU) was established. This is a central executive body with a special status that implements state policy in the field of management of state-owned objects and privatization of state property. On the occasion of the 30th anniversary, we have collected turning points in the history of state privatization.
Since 1992 and until now, there have been two cases of (over)implementation of planned revenues from privatization: the repeated sale of Kryvorizhstal for an unexpected price of USD 4.8 bln in 2005 and the sale of Ukrtelecom for USD 1.3 bln in 2011, despite the fact that the state tried to bring Ukrtelecom back due to the buyer’s violation of investment obligations.
The most successful case of small-scale privatization can be called the auction on the sale of equity stake of the state hotel Dnipro in Kyiv. Thanks to the Prozorro.Sale electronic auction system, more than UAH 1.1 bln was attracted through the competitive procedure. Now, the whole country is waiting for the start of a really large-scale privatization. The first object, put up by the Fund for sale, is the UMCC. Read about whether Ukraine will be able to pass the test for large-scale privatization in our material.
If we talk about the lease, then in general, since 2000, the State Property Fund of Ukraine and its regional branches have provided revenues to the state budget from the lease of state property in the amount of more than UAH 15.2 bln.
Among the best cases on leasing state property are: the lease of a Unified Property Complex of the State Scientific and Production Enterprise “Ukrmekhanobr,” which is located in the Dnipropetrovsk region. The contract price was UAH 1.1 mln for renting the entire complex.
The lease of office space in the building and the lease of the building of the customs and warehouse complex of the SE Chornomorsk Sea Trade Port should also be mentioned. Thanks to the auction, the month’s rent of the port increased from the expected UAH 69,700 to UAH 705,000.
Despite the temporary halt in large-scale privatization due to the coronavirus crisis, in 2020, the Fund was able to attract almost UAH 3.8 bln to the state budget, which is almost a billion more than in the “pre-covid” 2019. Over all the years of the SPFU’s activity, more than UAH 72 bln has been received from the privatization of state property.
Transparency International Ukraine, with the support of partners from the British Embassy Kyiv and Economic Development, Governance and Enterprise Growth Project, promotes the stable operation of the Sustainable Investments Office under the SPFU. This institution ensures the implementation of modern methodologies of project and process management, provides analytical and legal expertise to support reforms in the State Property Fund of Ukraine.
We wish the Fund to preserve and increase the dynamics of privatization and lease of state property because this is the key to economic growth of Ukraine!