Transparency International Ukraine supports statements made by the Reanimation Package of Reforms-Kyiv and calls on Kyiv City Council deputies to adopt the Temporal Procedure for the Use of Common Share Funds without Amendments by the Budget Committee. Anti-corruption civil society stands opposed to this illegal and corrupt amendment.
The draft decision of Kyiv City Council ‘On the Adoption of Temporal Procedure for Attraction, Calculation, and Use of Customers’ Common Share Funds in the Development of Social, Engineering, and Transportation Infrastructure in Kyiv’ (No. 08/231-1588/ПР, as of 31.03.2016) aimed at providing balanced economic and social development of the city. Kyiv City Council staff is partners of TI Ukraine and RPR-Kyiv, as well as Easy Business and the Centre for Economic Strategy. But the Budget and Social and Economic Development (Budget Committee) committees made an illegal amendment to the document. Its provisions serve the interests of specific building owners and monopolies. That is why TI Ukraine firmly believes that this project should not be supported in any way, shape, or form the way it is currently written. This harmful amendment should be removed.
The amendment written by the Budget Committee states:“Decisions on compensation between the size of a common share (potential partnership contributions) and transferred engineering networks and/or engineering and transport infrastructure objects by reducing the size of common share to a customer by his/her other agreements, is adopted by the Kyiv City Council based on a customer’s appeal after determination by the Department of the size of a common share, including penal sanctions in the case of legal grounds for their application. Reduction of the size of the participatory interest’s value, if approved by the Department for internal financial control and audit of the Kyiv City Council’s executive authorities (Kyiv City State Administration), but by no more than the value, determined in the acceptance act of the authorized self-government on adoption.” Thus, it is actually determined by deposing networks, constructed earlier, beyond the land lot and not related to newly constructed object, not determined by legislation (art. 30 of the Law of Ukraine “On Regulation of City Construction Activity”) to the participatory interests of customers. Legislation prohibits receiving participatory interest in cash (par. 7 of art. 40 of the Law of Ukraine “On Regulation of City Construction Activity”). In addition, it contradicts nature of contractual relationship – crediting some objects to account for other payments under other agreement. It also provides preferences for some developers, because 99% of them are registered as a different legal entity for each construction object. The Department for internal financial control and audit of the Kyiv City State Administration will not be able to exert full control over previously transferred engineering networks. So, it is actually the “hidden dismissal”, which, due to the lack of clear criteria for assessment of works/objects will allow for the support of some constructors, ignoring other, refusals, manipulation with amounts, etc.
“I have received a lot of complaints from businesses and organizations. They complained that it was very difficult to do business and invest. They needed transparency and understandable rules. We have done an unprecedented thing, by having reduced the percentage of participatory interest from 10 to 4%, thereby ensuring investment attraction to our city”, mentioned Vitalii Klychko before consideration of the Temporal procedure
“We cannot allow for damage to these progressive documents through amendments, made by the Budget Committee in favor of certain business interests. The vote of the Kyiv Council is a litmus test and demonstration of real and responsible anti-corruption policy. TI Ukraine is going to promote and closely monitor implementation of anticorruption policy, good governance and ensuring openness in organizing the investment process in Kyiv”, said Olesia Arkhypska, member of the Anticorruption council at the Kyiv City Headquarters, and expert in governance at TI Ukraine.
Therefore, TI Ukraine lends its support to RPR-Kyiv and encourages deputies of Kyiv City Council to reject this amendment from the Budget Committee at the plenary session.