MPs have returned from their holidays. There is good news and bad news about their week of work

Thegood news is that the authors of the draft law that legalises corrupt schemes for housing for the military promised to revise it due to the identified corruption risks. Thebad news is that last week, a law was passed that removed more than 20 billion in public procurement from open bidding.

In late January, Transparency International published its annual Corruption Perceptions Index 2021. Ukraine lost one point and took the honourable 122nd place out of 180 countries, along with:

• African state of Eswatini;
• Zambia;
• Nepal.

One of the main defeats of 2021 is considered to be the constant attempts to remove public procurement from the Prozorro electronic procurement system.

What is Prozorro?

In almost 6 years of its existence, it has saved taxpayers UAH 195 billion. This is almost as much as the amount of money that the Air Force Command experts estimate is needed for our tactical aviation.

Or 139 AN-178 military transport aircraft. Or more than 200 F-16 multifunctional light fighters. Or an annual pension for half of Ukrainian pensioners.

Watch the full episode of ‘Dear Laws’: watch the video

Why doesn't everyone want to use Prozorro?

The question arises, what is wrong with this Prozorro system that not everyone wants to use it? You have to understand that when it comes to corruption, it is often about access to public money. As soon as someone in power lacks their own money, procurement schemes are used. Some people become intermediaries between customers and private companies.

For example, MP Serhiy Kuzminykh, who was recently detained by the National Anti-Corruption Bureau with a half-million hryvnia bribe for helping to sign contracts between private companies and a hospital in Zhytomyr Oblast.

An attempt to change the law

A more sophisticated and systematic approach is an attempt to change the law itself to simplify the ‘complex’ rules for specific public procurement into simpler ones. The key is to find at least some way to reduce transparency and competition.

The example of Yanukovych's rule

The example of the three-year rule of Viktor Yanukovych is a striking one. During that time

• Parliament changed the procurement rules almost 20 times and created about 40 exceptions to the law that are not subject to competitive rules;
• The number of open tenders decreased twice (from 82% to 46%).

As a result, half of all goods and services were procured by the state in procurements with 1 participant and without any competition.

What did this lead to?

We remember very well that this led to rampant corruption, money being siphoned off from the budget, being transferred to offshore accounts, golden loaves, toilets, etc.

Everything would be fine if this bitter lesson was left in the past and the government did not make the same mistakes as its predecessors. Namely, trying to hide and remove more and more procurements from the law.

But no, we remember 2021 for the removal of the construction of the Great Ring Road around Kyiv, which is estimated at at least UAH 85 billion, from open procurement. There is no question of savings in this case.

New relaxations of the law

The beginning of 2022 has already been marked by new relaxations of the law. MPs passed draft law No. 6273, which makes it possible to withdraw more than UAH 20 billion from competitive procedures.

This initiative was authored by 20 MPs, including representatives of most political factions and groups:

• "Servant of the People";
• "Batkivshchyna";
• "Dovira";
• "For the Future";
• "European Solidarity".

What is at stake

The lawmakers propose not to use open auctions, which help to save money, to select contractors for the construction, reconstruction and repair of the Dniester PSP and 18 compressor stations.

For reference. Dniester PSP is one of the world's largest pumped storage power plants.

Construction began back in 1983, and its completion will require another UAH 8 billion. According to MPs, another 15 billion is needed to repair compressor stations.

That is, more than UAH 20 billion for construction and all ‘goods and services accompanying these works’ will be spent not at open auctions, in which everyone can participate, but as a result of negotiations with specific companies.

In general, this is allowed if the customer can document that there are simply no other suppliers on the market and this is a necessary step. However, the deputies have eliminated the need for our customers to prove this in writing.

The authors of the draft law believe that it is inappropriate to procure goods and services worth billions of dollars through competitive procedures. This is because the works must be related to the works performed earlier. In simple terms, the same contractors who built other parts of the PSP should be involved.

SBU uncovers large-scale corruption

Interestingly, a few months ago, the Security Service of Ukraine exposed large-scale corruption during the construction of the Dniester PSPP.

The budget losses are estimated at UAH 60 million - payment for work that was not actually performed, overstatement of the cost of work through fictitious companies and further distribution of money among all participants in the scheme.

The law awaits the president's signature

But apparently, the MPs were not impressed by this information, because it did not stop them. Parliament has already voted for the law and it is awaiting the president's signature.

Do we need fast and high-quality construction of one of the world's largest pumped storage power plants? Of course we do.

But what we do not need is the shadowing of more and more procurements and the green light for others to spend taxpayers' money in a non-transparent manner.

After all, as the historical experience of 2010-2013 shows, such exceptions do not lead to anything good.

Voting did not go according to plan

I would like to end with a good news story: the voting did not go according to plan and the amendments that concerned not specific procurements but all tens of thousands of customers across the country were miraculously voted down.

The amendments would have made it possible to enter a tender, set an abnormally low price for which no one would agree to work, and then, after signing the agreement, quietly raise it by 50%. That would be a saving.

I remind you that society should follow the legislative ideas of its elected representatives. After all, let's remember that politicians come and go, and we all have to live with the consequences of the laws they pass.

Source: Channel 24