Electronic land bidding currently piloted by the governmental team will also take place on the platform ProZorro.Sale. The respective changes to directive 688 have been approved by the Cabinet of Ministers at the meeting on June 20.
It is stipulated that StateGeoCadastre, as bidding organizer, will be able to use external electronic platforms to exercise lease rights for state-owned agricultural land plots. The variety of entry points for potential buyers will increase process transparency, while online format fo the bidding will enable engagement of the maximum number of participants, including a new pool of buyers who are already active users of the ProZorro.Sale system. Currently, the bidding procedures are being brought in compliance with the Land Code requirements pertaining to land bidding organization.
“During the past five years, the number of land plots leased through the auction process has increased times 31, and the competitive format of acquisition of this right effectively became the only alternative available to market participants. When we launch electronic bidding, we are basing it on the existing infrastructure of ProZorro.Sale, which is already functioning successfully, which will allow us to step away quickly from the archaic format of bidding and efficiently manage time and resources to launch online auctions,” commented First Deputy Minister of Agrarian Policy and Food of Ukraine Maksym Martyniuk. “We are also finally getting rid of the territorial restriction principle which requires the buyer to be personally present on site of the auction and is a significant restrictive factor when it comes to bidding intensification.”
“The launch of open land lease on the platform ProZorro.Sale is the safest and most consistent way of land market development overall. This system has already ensured transparent sales of assets worth of UAH 9 billion. One in two land lease auctions on ProZorro.Sale brings price growth of 80%,” says Maksym Nefiodov, First Deputy Minister of Economic Development and Trade of Ukraine. “The launch of the pilot project on land lease in the system means a possibility to hold lease auctions fairly, openly and scrupulously – in compliance with the high standards set by the ProZorro.Sale system. This completely changes the rules of the market play and provides an effective development tool of local communities.”
In his turn, acting director of SE ProZorro.Sale Oleksii Sobolev added that land lease auctions will be taking place based on the same principles as, for instance, property lease auctions. “The access to auctions will be provided through electronic platforms. They all have equal rights and obligatoins, but they compete among themselves, offering participants better service. At the same time, the budget spends nothing on the services they provide,” he explained.
Besides, the use of ProZorro.Sale means full transparency and openness of data on the auctions. “Nobody will be able to hide interesting lots from others or ban a participant in favor of somebody’s interests – it will all be easily traceable. Thus, we mitigate corruption risks as much as possible and ensure fair competition,” he stressed.
The next step of the pilot project is IT development of new procedures on ProZorro.Sale based on the rules approved by the government. The first auctions are expected to take place as early as next fall.
The procedure of sale of state-owned and municipal land plots or rights for them (lease, superficies, emphyteusis) on a competitive basis in the form of an auction is established by Chapter 21 of Land Code of Ukraine.
The procedure of implementation of the pilot project on electronic land bidding was approved by CMU Directive of June 21, 2017, No. 688.