From February 1, 2020, new rules for leasing state and municipal property through e-auctions in the electronic trade system will be launched. This means transparent competition between lessees and more revenue in the country’s budget.

The listings of property to be leased will now be available online. Every citizen will see how much actual property is leased in their communities, who leases it and for what amounts. Moreover, the highest price will be the main criterion for selecting the winner in the open competition. 

“This is a new era in the history of leasing relations between the state, Ukrainian communities and business,” says Khrystyna Zelinska, TI Ukraine innovation project manager. “Transparent e-auctions are not just about mitigating corruption risks when leasing national or municipal property. It will also allow for a higher market price for such property and replenishing the budgets.”

Previously, the lessee was selected by the selection board of the lessor if several potential lessees had applied. There were significant corruption risks here. Instead, electronic auctions allow you to find the market value of an item automatically – thanks to competitive bidding, provided there is no complete “manual control” of the process.

In addition, the public and businesses will have easy access to data. It is envisaged that all leases will be made public.

In October 2019, the Verkhovna Rada adopted a law “On Lease of the National and Municipal Property.” Lawyers at Transparency International Ukraine provided recommendations on the draft law. In particular, they recommended elimination of corruption-driving provisions on the mechanisms of privatization through redemption and lease of property while avoiding transparent competitive procedures and harmonization with the law on local self-government and elimination of the right to purchase leased facilities without a competition.

The ProZorro.Sale system is expected to be the administrator of such a trade system for the lease of national and municipal property. This platform has repeatedly demonstrated its ability to ensure full transparency and economic competition in the sale of property. This online system enabled the government and Ukrainian cities to have made over UAH 20 billion.

TI Ukraine will further control the transparency of the lease of national and municipal property by the public and will work on the opening of various data and processes that will reduce corruption risks.

For reference:

Transparency International Ukraine is an accredited chapter of the global movement Transparency International with a comprehensive approach to development and implementation of changes for reduction of the corruption levels. 

TI Ukraine has administered and transferred to the government such electronic systems as ProZorro, ProZorro.Sale, eHealth, and E-Data. Our other ongoing projects include the City Transparency Ranking and building of the DOZORRO community for control over public procurement.

This is a new era in the history of leasing relations between the state, Ukrainian communities and business. Transparent e-auctions are not just about mitigating corruption risks when leasing national or municipal property. It will also allow for a higher market price for such property and replenishing the budgets.

Khrystyna Zelinska, TI Ukraine innovation project manager