The Ministry of Infrastructure: regions have already used 8.6 billion of 11.5 billion hryvnias of government grant

19-12-2018

Source: the UCMC

As of December 6, 89% of funds from the State Road Fund’s grant for state roads (this is 23 billion hryvnias) were used. At the same time, 8.6 billion from funds of the State Road Fund for regions (this is 11.5 billion hryvnias) were used as of December 6. The director of the Department of Strategic Development of Road Market and Road Transportation at the Ministry of Infrastructure of Ukraine Viktor Sasin announced that during a discussion at the Ukrainian Crisis Media Center.

“As we predicted, the situation has improved significantly by the end of the year, since the works completed at the end of the construction season are now delivered as acts. We expect this figure to improve further […]. There was no total fail in the country. Both local administrations and the Ukravtodor managed to do their job well,” Viktor Sasin said.

Viktor Sasin explained that the reasons why some regions were lagging behind by 10-15%, compared with the most active regions, were related mostly to organizational factors. “In regions, where quality teams are engaged in dealing with tenders, they keep up-to-date with work and the system works well. We should not forget about the blocking of tenders by contractors, since we also faced such cases,” he specified.

The head of the budget policy department of the Eidos Center Vladimir Tarnay mentioned the lack of progress in road safety measures, for which the Road Fund allocated 5% of funds (and no hryvnia was used), among topical issues and risks. There were no funds allocated for road certification and the system of road quality management. It is also a large imbalance between costs related to heavy, ordinary and medium repairs – 11.8 kilometers of roads and 589 kilometers respectively.

“We see a huge advantage of ordinary and medium repairs. There are certain risks here, because while we understand what standards heavy repairs should meet, these standards are vague for ordinary and medium repairs,” the expert said.

There are problems with the financing of municipal roads repairs, for which the regions can allocate up to 20% of funds from their grants. “Judging by the lists approved by regional state administrations, 10 regions allocated 0% of funds for municipal roads,” the expert of the Project Office for Sectoral Decentralization Vadym Oliynyk said. In his opinion, in the future, it is necessary to oblige the regions to allocate at least 10% of funds for municipal roads, because about 95% of them need repairs.

At the same time, according to the acting director of the Department of Roads, Transport and Communications of the Lviv Regional State Administration Roman Kokotaylo, the funds of local budgets are currently increased significantly, so they can finance road repairs without involving the funds of the State Road Fund. For example, in the Lviv region, more than 40 million hryvnias were allocated from the regional budget for municipal roads, and the local budgets provides for the allocation of 75 million hryvnias for local public roads.

The head of the infrastructure department of the Sumy Regional State Administration Volodymyr Dudchenko, for his part, said that with a limited number of resources and a large number of roads that need repairs, it would be more appropriate to focus serious funds on some of the most important objects, and as for the remaining funds, give priority to minor repairs in order to ensure a high traffic performance.

The expert of BRDO’s (Better Regulation Delivery Office) Infrastructure Sector Vladyslav Prytomanov said that the task of state regulation in the market was to establish mandatory minimum requirements for contractors and the quality of their services. But an efficient market is possible only with fair and free competition. “Today, more than 40% of works are performed by top 5 companies, while the activity of each of them has been concentrated only in certain regions in recent year. Another 25% of works are performed by road services in the regions. Therefore, the Road Fund should be considered as an instrument for providing a competitive market between contractors as a source of funding, which is independent from customers. In combination with long-term planning of reconstruction and construction of both state and local roads, standardization of qualification requirements, tender procedures and elimination of obstacles for international contractors, Ukraine has every chance to get quality roads,” he commented.

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