Billions of trades were made: how much privatization took place in Ukraine during the war

In 2022, despite the war, the government received UAH 2.2 billion through the privatization of facilities large and small. The press service of the State Property Fund of Ukraine reported that UAH 1.7 billion was transferred to the state budget.

It was reported that 973 people participated in 193 successful privatization tenders.

“According to statistics, most of the objects are intended for small and medium-sized businesses. At auctions, you can find a large number of real estate objects with a starting price of several thousand hryvnia,” the fund said.

The biggest privatization transactions of 2022

• Marilovskiy distillery in Ternopil region, transaction amount of 150 million UAH;
• the property of one of the divisions of the state enterprise “Ukrspirt” in the Ternopil region – 70.3 million UAH;
• research institute “Erothorn” in Lviv – 55 million UAH;
• Jewelry factory “Crystal” in Vinnitsa – 45 million UAH;
• 50% share in “Orion”, the association of machine-building production – 80 million UAH.

Meanwhile, the State Property Fund announced some privatization plans at the beginning of 2023. In other words, 7 tenders will be held in January, and administrative buildings and non-residential buildings are among the parcels on display. The initial cost of the objects ranges from UAH 11,000 to UAH 1.7 million.

How much has come from privatization in previous years?

The most successful year in terms of privatization revenues can be considered 2021, when the State Property Fund of Ukraine filled the state budget with a record. 5.1 billion UAH The then head of the State Property Fund, Dmitry Sennichenko, noted that the period 2020-21 marked 7.35 billion hryvnia from privatization – more than in the last 7 years.

At the same time, the privatization plan in Ukraine was still not implemented, and experts noted only minor successes in this area. In November 2021, Vitaly Lomakovich, chairman of the Board of Growford Institute, said: Focus, said that in the backdrop of the corona crisis, the revenue scheme from the sale of state facilities in 2020 was reduced from UAH 12 billion to UAH 0.5 billion due to the ban on large-scale privatization. But the budget received UAH 2.2 billion through small and medium-sized privatization, which is four times more than in 2019 before the quarantine.

Recall that in August 2022, Prime Minister Denys Shmyhal announced the start of mass privatization, which was suspended on September 1 due to Russia’s full-scale invasion of Ukraine. At the same time, the Council of Ministers introduced several new rules to the privatization process:

• repeated electronic auction through gradual lowering of the starting price and further submission of bids;
• reducing the time between auctions from 20-35 to 10-15 calendar days;
• signing a protocol on the results of the electronic auction by placing qualified electronic signatures;
• payment by the winner of the electronic auction of the purchased customization object within 20 working days from the date of creation of the protocol on the results of the auction;
• signing of the contract for the sale of the privatization object within 25 working days from the day following the day of the creation of the protocol;
• The publication of an order by the privatization institution in the electronic commerce system for the completion of the privatization within ten calendar days from the date of issue.

We also recall that Bogdan Prokhorov, economist of the Center for Economic Strategy, said in May last year: FocusHow can privatization help revive the Ukrainian economy?