A year after the resumption of small-scale privatization of state property, the state budget received UAH 3.974 billion, including UAH 3.6 billion for objects sold at online auctions in the state electronic trading system Prozorro.Sale.
According to the system’s press release on Thursday, another UAH 74 million was made up of guarantee fees from bidders who refused to conclude deals following the auctions, and about UAH 300 million was paid in VAT.
It is noted that 405 state-owned small-scale privatization objects have found new owners since the first auction after the pause, and the largest sales were: Hermitage Hotel – UAH 311 million, Ukroboronresursy – UAH 211 million, Rivnotorf – UAH 205 million, Ust-Dunaysky Port – UAH 201 million, Lviv Jewelry Factory – UAH 185 million, and Marilovsky Distillery – UAH 150 million.
“Prozorro.Sale clarified that the privatization of another 27 objects based on the results of online auctions is at the stage of concluding contracts. As a result of these agreements, the state budget is expected to receive another UAH 200 million.
According to the system, the majority of successful privatization auctions (83%) are held with a step-by-step price increase, i.e., like English auctions, and the starting price of objects increases threefold on average as a result of the auction.
According to Prozorro.Sale, three out of five state-owned facilities are sold at its auctions on the first try, while the remaining assets are sold at repeated auctions, which are required by law.
It is noted that a year after the restart of privatization, more than 2.4 thousand participants, or an average of four bidders per auction, competed for the right to purchase state property at e-auctions, while before the war there were an average of three.
The greatest competition was for non-residential premises with a total area of almost 310 square meters in Uzhhorod – about fifty bidders, 39 people competed for the Hermitage Hotel, and 29 for certain property of Ukrspirt in Ternopil region.
“The results of the year of state property privatization that we see in the system today confirm that the online auction tool allows the state and communities to effectively manage their property and businesses to find the right objects,” summarized CEO of ProZorro.Sale Sergiy But.
ProZorro.Sale, which is the administrator of the online auction system, adds that small-scale privatization of municipal property since the beginning of the full-scale war on February 24 has brought communities more than UAH 613 million through the sale of 515 objects.
As reported, on September 19, 2022, the first online auction for the sale of state property took place after a pause at the beginning of the war in accordance with Law No. 2468-IX, which unblocked and simplified the privatization of state property during martial law.
Since 2018 and until recently, the State Property Fund of Ukraine and companies have been putting up small-scale privatization objects with a book value of up to UAH 250 million for online auctions on Prozorro.Sale. However, the Verkhovna Rada recently unblocked large-scale privatization by allowing it to be conducted through Prozorro.Sale.
The State Property Fund of Ukraine (SPF) estimates the potential amount of proceeds from small-scale privatization at UAH 1.5-1.7 billion, Acting Head of the SPF Vitaliy Trubarov has said. “Maksym Nefyodov Deputy Minister of Economic Development and Trade expects that we will receive UAH 3 billion from small privatization. According to our modest estimates, the amount may not be so optimistic, it will be UAH 1.5-1.7 billion,” he said on the air of Channel Five.
At the same time, he noted that there are fears of failure to implement the plan for large-scale privatization this year. “Is there a chance that we will not fulfill the planned task? Yes, unfortunately, there is such a chance, because we lost half a year due to the fact that privatization of some of the objects could not start on time, and some of the objects fell out of the list,” Trubarov said.
In particular, he noted that the list of large-scale privatization for 2018 does not contain a number of large agrarian objects. “For example, the Agrarian Fund or the State Food and Grain Corporation of Ukraine. They perform a certain role related to food security, which now does not allow putting these objects up for sale. At the request of the ministry of Agrarian Policy and Food, these objects have been removed from this list for the time being and transferred to 2019,” he said.
ESTIMATES POTENTIAL REVENUES, SMALL-SCALE PRIVATIZATION, SPF
