During the last few months, Ukrainian state authorities have adopted a number of regulations regarding concession tenders and auctions on sale of state and municipal property, such as:
1. Law of Ukraine No. 1024-IX, dated 2 December 2020, and Resolution of the Cabinet of Ministers of Ukraine “Some Issues on the Use of the Electronic Trading System for Concession Tenders” No. 1210, dated 9 December 2020, which postponed the launch of the electronic trade system until 1 September 2021.
Prior to this date, information on concession tenders must be published on the “Prozorro.Sales” and “Prozorro” platforms.
In addition, based on these recent regulations, a concession tender is conducted without the applicant’s pre-qualification, if the concession object’s value (including the expected value of the newly created object) is less than UAH250 mln (approx. USD8.9 mln).
2. Resolution of the Cabinet of Ministers of Ukraine “On Approval of the Procedure for Engaging Counsels for Preparation of a Concession Project” No. 950, dated 9 October 2020, which:
- provides that counsels must be selected through a public procurement or a competitive dialogue
- sets a proportion of the price and quality criteria for the services if the counsel is chosen through a public procurement (70% and 30%, respectively) or through a competitive dialogue (30% and 70%, respectively)
- determines the right of the potential counsel to confirm the quality of services by indicating the engaged subcontractors’ experience
- sets a maximum consideration for the counsel within one concession project in the amount of 5% of the concessioner’s investment
3. Resolution of the Cabinet of Ministers of Ukraine “Some Issues of Organising and Conducting the Electronic Auctions” No. 1182, dated 2 December 2020, which:
- sets the procedure under which the operator of the electronic marketplace must pay back to the winner of the electronic auction the difference between the paid guarantee fee and the sale price of the privatisation object
- reduces the maximum participation fee for privatisation objects priced at over UAH64 mln (approx. USD2.8 mln), and increases such fee for the objects priced at not more than UAH64 mln
- reduces the deadline for the winner to pay the participation fee from 43 to 30 days
We believe that the recent legislative developments in concession and privatisation laws improve the investment climate in Ukraine.
Posted on February 4, 2021