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Crucial move to cut secrecy on public spending


A minimum majority in the Verkhovna Rada (226 MPs) has managed to pass an important law opening up information about public procurement and revoking legislative moves under the previous administration which hid vast amounts of public funding from public view   The draft law was tabled by the Cabinet of Ministers and presented by Prime Minister, Arseny Yatsenyuk.  It was not supported by any Party of the Regions or Communist MPs.

The law reduces the number of cases which are excluded from the scope of the Public Procurement Act,   meaning that the public will now once again be able to find out how a significant amount of public funding is being spent.

The law also apparently adapts the procedure for buying from one bidder to comply with such procedure in European countries and restricts the grounds allowing public procurement without tender in order to reduce such practice.

A perhaps less understandable innovation is the norm waiving the need to post information in a state official printed publication on public procurement and in the international information bulletin on public procurement.  The information must, however, be published on the website of the Authorized body “in order to simplify accessibility; place information about public procurement, save public funding spent on the publication of such information and to ensure transparency of access to information about public procurement.

“Authorized body” is defined in Item 29 as being the “central executive body which carries out state policy in the field of public procurement”.  Who this body is at present is not clear.

It is worrying, although not surprising, that the draft law only just managed to get a majority after a few failed attempts.  It is particularly telling which parties opposed the bill.  The Party of the Regions and communists formed the parliamentary majority throughout the years of Viktor Yanukovych’s presidency and adopted laws which reduced transparency of public procurement.

In August 2012 Yanukovych signed into law a bill removing vast amounts of public funding from the tender process and therefore from the public eye.  Law № 9634  allowed tenders for State or municipal enterprises or enterprises where over 50 percent is owned by the State or municipal authority to be removed from the Public Procurement Act.  This hid from the public all of the phenomenal prices paid for goods by the president’s administration or Verkhovna Rada, and doubtless contributed to the obscene level of opulence in which Yanukovych, his ministers, prosecutor general and others surrounded themselves with.

A law had already been passed № 7532 in May 2011 reducing the list of purchases requiring tender procedure, as well as giving scope for public procurement where there is only one bidder.

Six months after Yanukovych signed the 2012 bill, the civic watchdog “Nashi Hroshi” [“Our Money”] reported that the amounts of public funding now unaccounted for has risen sharply.

They compared the sizes of the tenders published in the Public Procurement Herald during January and February 2012 and 2013 and found that the number had halved, from 133 billion UAH in 2012 to 66 billion in 2013. 

Halya Coynash

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