Yanukovych may veto scandalous law on public procurement



Kommersant Ukraine has reported that the President is planning to veto amendments to the Law on Public Procurement.  As reported here, 90 Ukrainian NGOs and Transparency International have come out strongly against the law and called for the President to use his power of veto. Kommersant-Ukrainie however clearly sees the prompt as having come from the European Commission [EC] and World Bank.  While they had urged Ukraine to pass a law on public procurement, the law adopted is so obviously aimed at fuelling, rather than preventing corruption, that Kommersant suggests that the EC and World Bank will push for its veto. Yanukovych is asked to get rid of the norms on removing State enterprises from the general procedure for public procurement and to reduce the possibility for procurement with only one bidder.

As reported, Law No. 7532 On Amendments to Legislation on Public Procurement was passed by the Verkhovna Rada on 17 May. 

This was after the EC suspended its funding of State bodies because of previous amendments passed to the procedure for public procurement on 11 January. Then parliament included energy goods, as well as water supply and drainage services among goods and services which do not require tender procedure.

Kommersant-Ukraine says that the funding was to be restored only on condition of the adoption of the present law. However independent experts believed that this new law would make the situation worse.

Up till recently, the newspaper says, the EC and World Bank avoided making any comments, however last week they are believed to have decided to take the opposite stand. The newspaper cites a source aware of the course of negotiations as saying that they have achieved agreement with the European Bank for Reconstruction and Development and will be writing to the President asking him to veto the bill.

“Information about the letter being prepared was confirmed by the Head of the EC Representative Office in Ukraine ose Manuel Pinto Teixeira. “I fear that we will be forced to state that the new law is incompatible (with EC requirements) and inform the Ukrainian authorities of the inadmissibility of passing it”.

One of the newspaper’s sources, involved in preparing a joint appeal from the EC and World Bank, says that these organizations will ask the President to revise the list of exclusions from general procedure which the new law brought in.

The Head of TORO, the contact group for Transparency International in Ukraine, Oleksiy Khmara points to other problems with the new law.

“Some of the exceptions certainly need to be removed. However the main problem is not in them, but in the fact that the new law gives wide scope for carrying out public procurement where there is only one bidder. Following the letter of the law, during a period of economic crisis, which means today, you can purchase virtually any goods or services from only one bidder”. Another problem he mentions is the vague procedure of insuring the item of the purchase which can be used for creating corrupt schemes at national level.

From the report here

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