On June 15, President Volodymyr Zelensky set the task of launching a major privatization initiative to start from Sep. 1. Accordingly, at the end of July, Parliament adopted relevant legislation and the government developed all necessary by-laws.
In an exclusive interview for Kyiv Post, Oleksii Sobolev, Chief Executive Officer of Prozorro.Sale confirmed that the Ukrainian government is planning to privatize more than 100 state assets as part of the process.
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Prozorro.Sale is a state-owned company that runs transparent electronic auctions for the government, municipalities, and commercial companies. Since 2016 thanks to Prozorro.Sale municipal and state budget earned $2.2 billion, thus e-auction system became a leader in the openness of government data on public sale.
Small-scale privatization involves the sale of state and communal enterprises, real estate and land plots, whose value does not exceed 250 million Hr ($6.7m). The process is designed to make it possible to buy these premises for a fair price and start to work. It can be essential for regions where assets in villages and towns have been standing for years and are being used inefficiently.
The main impetus for the government to launch the privatization process has been a significant population shift from Ukraine’s eastern and southern regions (where major hostilities are on-going) to western regions such as Lviv. There is a shortage of real estate in western Ukraine and the government has spare property to sell in those areas. Privatization is thus intended to simulate business activity.
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Supply and demand have decreased since the start of the war on Feb. 24, but the government expects to double its return on the starting price. There is no statistical expectation that prices will be lower than before the war; and Ukraine is still in the grip of high inflation.
It is currently hard to buy currency in large volumes, so privatization is also expected to stimulate investor activity.
Watch the full interview tomorrow, Friday August 19, by subscribing for free to our YouTube channel here.
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