The first meeting of an inter-agency working group on reform of Ukraine’s concession law took place in the Ukrainian Ministry of Economic Development and Trade on 8 November. According the ministry, the working group and experts from the European Bank for Reconstruction and Development (EBRD) will work on a new version of the concession law.

"The granting of concession on state assets is currently regulated by four different laws, and they sometimes contradict each other,” said Ukraine’s First Deputy Minister of Economic Development and Trade Yulia Kovaliv, who heads the working group. “At the same time, the existing legislation does not outline transparent procedures for initiation, preparation of concession projects, and adoption of decisions on the appropriateness or inappropriateness of their implementation."

The new version of the concession law harmonizes the laws governing concessions with the legislation on public private partnership (PPP). This is necessary because concession is essentially a form of public-private partnership.

According to Kovaliv, concession is a better way of disposing of state assets than leasing, for example.

"In the case of a concession, all the capital investments in the asset belong to the state. Therefore, the concession mechanism can and should be used in ports, roads, and infrastructure... Concession removes the possibility of the so-called ‘hidden privatization,’ in which an entity that leases a state asset registers ownership rights to inseparable improvements to the asset and essentially demands that the state compensate the cost of these improvements and refuses to return the asset to the sate otherwise. In the case of concession, such an option is ruled out and all investments belong to the state," Kovaliv said.

The working group includes representatives from the Ministry of Economic Development and Trade, the Ministry of Infrastructure, the Ministry of Energy and Coal Industry, the Ministry of Regional Development, the Ministry of Finance, parliamentary deputies, the secretariat of the parliamentary committee on economic policy, and the secretariat of the parliamentary committee on industrial policy and entrepreneurship, and the deputy business ombudsman. 

As reported earlier, the existing concession law was adopted in 1999.