Ukrainian MPs revise auction rules

On May 17, the Verkhovna Rada of Ukraine passed a very important government purchase bill, canceling the existing red tape involving any such deal between the government and an individual business, and adding to the list of procedures to be followed by every customer.

MP Serhii Teriokhin took the floor and explained: “Previously, all such purchases transactions for the benefit of our ranking bureaucrats were made in accordance with the generally accepted auction/tender procedures. Now such purchases will be made regardless of these procedures.”

This bill has an interesting, even thrilling background. It was adopted in its first reading five weeks ago, with a number of apparatchik corruption risks provided for, accidentally or intentionally. Two weeks later, the bill was submitted for a second hearing in the Ukrainian Parliament, as per standing orders. Revised and amended by the VR’s pertinent committee, the text was a disaster, but after a heated public debate the bill was shelved for a month.

On May 17, this bill was heard by the VR. The text was different, presented by MP Oleksii Plotnikov (Party of Regions) who explained that the new text was due to the changes made in the VR Economic Policy Committee’s membership. According to BYuT MP Ostap Semerak, the author of the alternate bill, the one passed by parliament had been tampered with by men on Bankova Street [i.e., the president and his men].

“Members of parliament who had worked on the original wording of the bill to be submitted for the second hearing told me that Liovochkin had barged in and ruined the pattern designed by Azarov’s Cabinet, considering that the bill was made by the Cabinet of Ministers of Ukraine. A different bill was tabled on Tuesday. It reads better (Liovochkin should be credited, of course), but it has all those draconian clauses,” MP Semerak told The Day.

Draconian clauses? First, there is still the one that prohibits public knowledge about the bidders. From now on no such data will be found on the government’s sales/purchase website. In other words, the Ukrainian general public won’t know about such central budget appropriations. For example, several months ago it became public knowledge that the wood benches in Kharkiv’s Metro stations had cost the budget a total of 69,000 hryvnias. Now the public will know nothing, period.

Second, no one will be able to challenge the Bid Evaluation Committee’s negative judgment in the courts, simply because all pertinent data is now classified. Also, the Ukrainian Cabinet’s purchase estimates read some 30 billion hryvnias, more than 10 percent of the 2011 State Budget, let alone the cost of purchases made by government-run enterprises.

Last but not the least, each bidder can now rely on non-competitive, non-tender procedures. Under the new law, the government can apply such procedures in the presence of “exclusive socioeconomic circumstances.” Considering our realities, such exclusive circumstances are standing practice.