The first lots permitting the subsoil use are available in the ProZorro.Sale system

06-12-2018

In November, the Government approved a decision to open access to geological information and liberalize its circulation. This allowed to introduce online auctions for the sale of special subsoil use permits. And today, the first lots permitting the subsoil use are available in the ProZorro.Sale system. The State Service of Geology and Subsoil of Ukraine (Derzhgeonadra) published the first 10 lots, which will subsequently be sold on transparent auctions, in the ProZorro.Sale system.

The experts of the Better Regulation Delivery Office have been studying the subsoil use market for the second year running and have conducted a systematic analysis of market regulation, which shows that one in four of 83 regulatory acts in this area have signs of being illegal and/or irrelevant. One-third of regulatory instruments provoke high corruption risks, and the sector operates under non-transparent and discriminatory conditions for the allocation of subsoil use rights.

According to the pilot project’s terms, the exposition of lots takes 90 days, which will allow potential buyers to prepare carefully for auctions. There are no restrictions on the auction participants, but they should be legal entities with Ukrainian registration. And to prevent so-called “dormant” licenses, a tender winner will have an obligation to perform a mandatory minimum list of works, otherwise his license will be revoked.

“Through the joint efforts of a number of market participants, associations, BRDO, MEDT, the Ministry of Ecology and a number of agencies, we prove to the world step by step that Ukraine can become transparent and comfortable for businesses and investors. And not least due to the smart improvement of the effective regulation system,” the BRDO Energy sector head Oleksiy Orzhel commented.

We remind that earlier, the Cabinet of Ministers of Ukraine approved the Resolution “On Implementation of an Experimental Project on the Introduction of Auctions for the Sale of Special Subsoil Use Permits through Electronic Auctions” (https://bit.ly/2AncUBx). According to the document, the auctions for the sale of special subsoil use permits are carried out solely in accordance with a Temporary Procedure approved in the above-mentioned resolution.

Pursuant to the resolution, on December 27, the Derzhgeonadra signed an agreement with the SE “PROZORRO.SALE” on the launch of a pilot project on open electronic auctions for the sale of subsoil use permits. The pilot project will last until September 1, and according to its results, the Derzhgeonadra will formulate proposals on the mandatory use of electronic auctions.

Thanks to open auctions on ProZorro.Sale, the state and local communities have already sold assets of nearly 12 billion UAH.

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