Yanukovych called on to send back the draft Law on Public Procurement



An open appeal signed by a large number of NGOs and individuals calls on the President to return for reworking draft Law No. 7532 on amendments to several legislative documents regarding public procurement.

The letter states that on 17 May 2011 parliament, citing harsh sanctions from the EU, passed in its second reading this draft Law. This Law makes significant amendments mainly to the base tender law “On carrying out public procurement”. The bill was submitted by the Cabinet of Ministers  and according to public statements made by members of the Government and the President’s Administration was agreed with experts from the World Bank and EU.

The proposed amendments, approach and concept for regulating issues regarding public procurement cannot promote a competitive environment and avoid corruptions. Instead they could lead to distorted competition, the use of corrupt schemes during the relevant procedure and additional public expenditure.

The authors warn that if this Law comes into force, it could lead to an overall annual expenditure of 30 billion UAH.

The draft Law envisages extended use of procurement with only one bidder, for example where there is an urgent need to purchase something because of special economic or social circumstances making it impossible to hold to the timetable for a tender. In the actual situation in Ukraine of economic crisis, up to 100% of all public procurement falls under this definition. At the same time, the draft Law considerably broadens the list of exceptions from general public procurement procedure (with 20 exceptions altogether) without procedure being stipulated for such procurement. For example, goods and services intended for events and official receptions with the participation of the President, the Speaker of Parliament and members of the Cabinet of Ministers would be removed from the force of the law.

The norms on insurance of the item of purchase without any stipulation of the procedure itself are also dangerous from the point of view of likely corruption.  Nor is there adequate resolution of issues involving regulation of procurement for State, treasury, municipal and commercial enterprises where most than 50% of the shares are State-owned.

The authors are strongly convinced that Draft Law No. 7532 in its present form will lead to a reduction in the openness and transparency of public procurement, as well as to the loss of considerable public funding. The results of the hasty entry into force of this law could be disastrous for Ukraine’s international image, as well as for those international partners engaged to draft the Law.

In view of the above, they ask the President to return draft Law No. 7532 to the Verkhovna Rada for reworking and to recommend that parliament involve interested independent organizations from civil society in the process.

The list of signatories is very long , including TORO, Transparency International’s partner in Ukraine. 

The letter has also been sent to Speaker of the Verkhovna Rada, V. Lytvyn, the ead of the European Union Delegation to Ukraine, Ambassador José Manuel Pinto Teixeira and the Director of the World Bank’s Representative Office in Ukraine, Marin Raiser. 

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