Editor’s Note: The Kyiv Post tracks the progress made by Ukraine’s post-EuroMaidan Revolution leaders in making structural changes in the public interest in a broad range of areas, from the defense and energy sectors, to taxation and pensions. Below are the main issues in focus from Jan. 12-19.
Summary
In the first good news of the year, during its afternoon session on Jan. 18, on its third day back at work since returning from its New Year break, the Verkhonva Rada passed at econd reading the long-awaited bill on privatization.
The legislation, which was approved by 266 lawmakers, puts around 900 state companies on the auction block this year. The State Property Fund is to publish the list of companies up for sale within three months.
According to the law, buyers have a right to demand that sale-purchase agreements are drawn up in line with English law until Jan. 1, 2021. The cabinet will oversee the auctions of the property. Russian citizens and companies and those on international sanctions lists are not permitted to buy Ukrainian state property.
Earlier, parliament got bogged down in debating at second reading draft law No. 7163 on the reintegration of the Donbas, which is entitled “On the Specifics of State Policy to Ensure the Ukrainian State’s Sovereignty over Temporarily Occupied Territories in Donetsk and Luhansk Oblasts.”
The law declares Russia to be an aggressor state and lays the legal grounds for military control over operations in the Donbas war zone. It is controversial legislation, as some lawmakers say it grants the president powers beyond those allowed under Ukraine’s constitution – specifically the power to order military actions without the prior consent of parliament.
Parliament speaker had hoped to pass the law on Jan. 16, but as the day’s work ended, parliament had voted on only 482 of the 675 amendments to the law proposed since the law was passed at first reading on Oct. 6. Parliament spent its morning session on Jan. 17 continuing its debate of the law, but even that wasn’t enough, and the legislation was only approved (280 for, 33 against, with two abstentions) at the end of the morning session on Jan. 18.
Fiscal
In another sign that Ukraine may be hitting the brakes on reform, the Cabinet of Ministers on Jan. 11 announced it was cancelling a government decision on reform of the State Fiscal Service, which oversees taxes and customs.
The now-canceled decision was to have created two new legal entities – the Interregional Customs and the Interregional Main Directorate of the State Fiscal Service, while abolishing regional departments of the service. Myroslav Prodan, the acting head of the State Fiscal Service, opposed the measures, which were proposed by the Finance Ministry.
Writing on Facebook on Jan. 16, Finance Minister Oleksandr Danyliuk said he was concerned about the government’s decision to cancel its earlier decisions to reform the State Fiscal Service.
“I am concerned about the decision of the Cabinet of Ministers, which was made while I was on a business trip to the United States, regarding the cancellation of decisions aimed at institutional reform of the State Fiscal Service, in particular, the reorganization of its structure, the attraction of new people and the final liquidation of the tax police,” Danyliuk wrote.
“I’m planning to fix this misunderstanding,” he added.
“Those who hoped that the decision of the Cabinet of Ministers will end the reform hurried to rejoice,” Danyliuk went on. “I have already talked with Prime Minister Volodymyr Groysman, and he assured me of his support for the reform of the service.
“The prime minister is well aware of the importance of these changes to the country, its economy and people. Therefore, I am sure that the correction of this misunderstanding will be an impetus for rapid changes in the State Fiscal Service.”
Defense
The Ukrainian state-concern UkrOboronProm, which manages Ukraine’s state-owned defense industry suppliers and manufacturers, said on Jan. 16 that it had “revived” the work of the Kharkiv State Aircraft Manufacturing Company, which has been idle for the past five years.
UkrOboronProm said the Kharkiv plant’s production equipment had been overhauled, which had allowed it to perform maintenance work on seven aircraft last year – An-72s and An-74s operated by companies in Kazakhstan, Egypt, Turkmenistan and Ukraine.
An An-72 military transport takes off from an aerodrome in Kharkiv Oblast on Aug. 26. After being idle for five years, Kharkiv State Aircraft Manufacturing Company is again servicing such aircraft. (UNIAN)
The plant has also been retooled to produce tracks for infantry fighting vehicles, and its research and development department has also be restarted, UkrOboronProm said. The plant has also restarted the production of aircraft parts.
Earlier, UkrOboronProm said it had begun the “practical” stage of its restructuring and reform process, under which the holding’s more than 130 enterprises will undergo restructuring, auditing, corporatization, and – for the most promising and attractive businesses – privatization.
The corporatization process will create “transparent management structures, supervisory boards (and) common rules” for foreign investors, the company said in a press release issued on Jan. 10.
Energy
The next meeting of the reconstituted supervisory board of state oil and gas company Naftogaz of Ukraine will be held at the end of January, Naftogaz has announced.
The previous board collapsed at the end of September, when its last two independent members submitted letters of resignation, complaining that the government had been dragging its feet on reforming the company.
The new head of the supervisory board, UK national Clare Spottiswoode, was elected as chairman of the board on Dec. 22. Apart from Spottiswoode, the board consists of Bruno Lescoeur (France), Amos Hochstein (United States), Steven Haysom (Canada), and Volodymyr Kudrytskyi, Serhih Popyk and Volodymyr Demchyshyn from Ukraine.
At their next meeting, the supervisory board will form its four committees and appoint their chairmen, Naftogaz said.
Spottiswoode was the director general of Ofgas (the Office of Gas Supply, the UK’s gas sector regulator) between 1993 and 1998 during the breakup of the state owned British Gas and liberalization of the gas market in Britain.
Under planned reforms of Ukraine’s gas sector, Naftogaz is to be split up into separate gas production, transport and distribution companies.
