The State Property Fund (SPF) will be able to resume big privatization, to lease state property for up to five years and will receive sub-sanctioned property upon the decision of the SAI and independently decide on its further fate.
According to the FGI in a press release, the relevant provisions are stipulated by law number 8250, which the Rada supported by 231 votes with the required minimum of 226 votes on May 30.
The fund specified that it will independently make management decisions on the sub-sanctioned property: privatization, sale, lease or management, and all the funds received will be directed to the Fund for liquidation of consequences of the armed aggression of the Russian Federation.
In addition, the law bans unsanctioned individuals and citizens of aggressor countries from holding positions as heads of state-owned companies and members of supervisory boards and cancels the procedure for approving local authorities for directors of state-owned companies managed by the SPF, the release said.
Regarding the lease, the Fund recalled that before the full-scale invasion, it could lease state property for up to 49 years, although the vast majority of contracts were for five years: in 2021, the share of five-year contracts was 88.8%.
At the same time, at the beginning of the war there were fears that due to low competition caused by the general uncertainty, the price of the lease may be underestimated, and from April 1, 2022 the Rada limited the validity of new contracts to the duration of martial law + 12 months after its cancellation, explained the IGF. He specified that during this time has concluded 1,153 such contracts.
“But in recent months, Ukrainian business has gradually adapted to the challenges of martial law … Term limits do not encourage entrepreneurs to participate in lease auctions, so now 38% of them do not pass due to lack of demand,” explained the Fund.
After the law enters into force, the agency expects to increase the income from renting state property by 20-25%, or 100 million hryvnias per year, as well as to improve the condition of the leased property.
According to a press release, the law also aims to improve the management structure of the IGF: the head of the Fund will have the right to appoint and dismiss deputies, 12 regional offices – separate legal entities will become structural units, and the organizational structure will be built on a functional principle. “As a consequence, a clearer and more understandable responsibility for the work of the State Property Fund and the installation of the KRI for subdivisions and market salaries for employees,” the statement said.
