Business news from Ukraine

PRICES IN KYIV HOTELS 5-10 TIMES HIGHER FOR PERIOD OF CHAMPIONS LEAGUE 2018 FINAL – EXPERT

The occupancy of the most popular hotels in Kyiv for the period of the UEFA Champions League final reaches 100%, while prices exceed the usual tariffs by 5-10 times, experts polled by Interfax-Ukraine believe. “Almost all the hotels (more than 90%) have been booked for the period of the UEFA Champions League that will take place in Kyiv on May 26. Most of them have a minimum period of booking for the duration of the match, usually three or five days. The price of rooms depends on the location of the hotel. Prices for rooms in hotels in the center of the city are 5-10 times higher than the standard rate,” Natalia Chistiakova, the director of the valuation and consulting department at Colliers International (Ukraine), said.
According to her, the most popular objects are three-, four- and five-star hotels in the central part of the city. Tariffs for rooms decrease with distance from the Olympiysky sports complex.
In particular, according to Park Inn by Radisson Kyiv Troyitska hotel, located near the sports complex, all the rooms in the object have already been booked. At the same time, the hotel offers guests the option of including in the waiting list and after May 4 receive an answer whether there are any vacant rooms. “Given the mistakes of the previous years when carrying out the events of this level, hoteliers, more often, book rooms on a prepayment of not less than 70%,” the expert said.

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GERMAN AMBASSADOR: INTERNATIONAL COMPANIES PARTICIPATION IN UKRAINE’S GTS WILL INCREASE ITS COMPETITIVENESS

The participation of international companies in the management of Ukraine’s gas transportation system (GTS) can improve its competitiveness, German Ambassador to Ukraine Ernst Reichel has stated. “Specifically, on the gas transmission system, we do believe that the participation and investment of foreign companies could play a big, positive role in order to make the gas transmission system more competitive. We are entering a phase where it is likely that there will be more competition for the Ukrainian gas transmission system, and so it needs initiatives to make it more viable and cost effective. International investment and participation in the management can play a major role. Also the European Commission is making proposals in this direction,” he said in a joint interview with French Ambassador Isabelle Dumont to Interfax-Ukraine.
Dumont, in turn, noted that the compulsory conditions for significant investments on the part of European companies in Ukraine’s GTS are clear and transparent working conditions and a favorable business climate.
“In principle, everything is possible. What will make them go or not go will be confidence in Ukrainian institutions, confidence in the business climate, confidence in any privatization offered, transparency and the understanding of what is on the table,” she said.

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UKRAINIAN PRESIDENT: NEW CONFINEMENT AT CHORNOBYL NPP TO BE COMMISSIONED IN DECEMBER 2018

New containment facility at the Chornobyl Nuclear Power Plant is planned to be put into operation this December, Ukrainian President Petro Poroshenko has said. “A new safe confinement is planned to be put into operation in December… Installation of equipment and systems is currently being completed there,” the president said at Chornobyl Nuclear Power Plant on Thursday.

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UKRAINE SHOULD REVIEW APPROACH TO BANKRUPTCY LEGISLATION

The legislative protection of creditors’ rights in the process of bankruptcy remains an urgent issue, according to lawyers polled by Interfax-Ukraine. Senior lawyer of Evris law firm Serhiy Donkov noted that the practice of bankruptcy in Ukraine is dynamically developing taking into account both the historically existing design of a competitive process and the world practice. At the same time, in 1992-1999 the law on bankruptcy was the final stage of procedures for the enforced recovery of creditor indebtedness up to the liquidation of a debtor legal entity with the subsequent writing-off of outstanding debts. The bankruptcy law adopted in 1999 included bankruptcy proceedings, introduced an institute of professional arbitration managers performing the functions of forming the liquidation mass, external control and management of the debtor, selling assets and settling with creditors.
“Unfortunately, during this period Ukraine chose the so called “pro-debit” model of the law on bankruptcy, i.e. aimed primarily at preserving the activities of debtors, which was economically inexpedient during the crisis of mutual settlements. The model after the changes made over 17 years has not changed much, as a result bankruptcy procedures are very long, expensive, ineffective in achieving the main goal – settlements with creditors,” the lawyer said.
According to him, international experts assess the average effectiveness of bankruptcy procedures in Ukraine at nine cents for $1 of debt.
“Thus, a lot of barriers are removed for opening bankruptcy cases. The role of secured creditors in the process is greatly strengthened. But the “sacred cow” – state property – is still prohibited. Let’s hope that a new law on state property privatization will be enacted soon, and legislators won’t be pursued by the fears of shadow privatization,” he said, stressing the need for the further reform of bankruptcy laws.
Donkov also expressed the opinion that reorganization should be only pre-trial, voluntary. This is the debtor’s last chance to negotiate with the lender about debt restructuring and avoid bankruptcy.
Senior lawyer at Integrites law firm Orest Tsimerman, in turn, believes that the situation with bankruptcy does not differ from any other practice of protecting the interests of business in the national jurisdiction.
“There is considerable experience of clashes with legislative conflicts, procedural abuses and a lack of a unified approach of courts. For non-professional players in this sphere, this situation clearly follows the meaning of the well-known expression that your fate does not belong to you in the open sea and in court,” he said. In general, according to the lawyer, the state should not solve complex problems with priority on additional norms or whole codes.
“Efforts should be aimed at improving the guarantees of independence of courts and court-appointed trustees. The best practices of work at the most problematic stages of procedures have already been worked out,” he said.
Partner of Asters law firm Andriy Pozhidayev noted the importance of protecting the rights of creditors, taking into account the legal nature and purpose of procedures for restoring the solvency and bankruptcy of the debtor. “A high level of non-fulfillment of debt obligations in Ukraine and crisis phenomena in the financial and credit system cause the fact that the number of cases on bankruptcy occupy a significant part of economic disputes considered by courts. Moreover, in many cases during the procedure of bankruptcy unscrupulous debtors see an opportunity to avoid (in full or in part) liability to the creditor, using for this purpose some ambiguous provisions of the current legislation regulating the recovery of the debtor’s solvency,” he told the agency.
The lawyer noted that at present a number of legislative changes are taking place in this area, the most significant of which include, for example, the code on bankruptcy procedures, the draft of which contains provisions aimed at limiting the possibilities of violations of creditors’ rights. “Such changes will undoubtedly have a positive impact and will contribute to the effectiveness of protection of creditors’ rights. At the same time, the draft code on bankruptcy in the current wording leaves open the main issues arising during the protection of creditors’ rights and needs to be further improved,” the expert stated.

OPEN DATA BRINGS OVER $700 MLN TO UKRAINE’S ECONOMY IN PREVIOUS YEAR

Open data in 2017 brought more than $700 million, or 0.67% of GDP, into the economy of Ukraine, according to a study conducted by the Kyiv School of Economics (KSE) in partnership with the London-based Open Data Institute. “If Ukraine continues to work with open data, in particular publish datasets from government decree No. 835, then economic benefits from open data until 2025 will be up to $1.4 billion, or 0.92% of GDP,” said KSE member Artur Kovalchuk, who is one of the authors of the study.
The study finds that today about 3,000-4,000 people directly work with open data, and its further development will translate into the need for personnel with experience in collecting, analyzing, using data.
In addition, Project Manager of the USAID/ UK aid-funded Transparency and Accountability in Public Administration and Services program /TAPAS Petro Matiaszek says that according to the research, the potential of open data in Ukraine is fully comparable with that of the EU. Thus, a recent study by Capgemini for the European Commission estimates direct effects from opening authorities’ data in the EU countries by 2020 vary within 0.37-1.58% of GDP (EUR 55.3 billion).
The study “Economic Potential of Open Data for Ukraine” was conducted with the support of the State Agency for E-Governance and is the first attempt to assess the direct economic effect of opening government data and the potential created by such data for the national economy.
The findings of the research, methodology and other data are available at tapas.org.ua.

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