Ukrainian cities start raising the alarm as the cold season approaches because they know it’s a bad move not to start preparing for winter in a timely fashion. The chairman of the Association of Ukrainian Cities, Myroslav Pittsyk, doesn’t mince words when he says that preparations for the heating season fail successively, and the prospects for preparing for the winter will come with the same difficulties “Once again we are making a mistake not only because we are failing in our preparations for the winter season, but also because a norm has been included in the new version of the budget, which does not satisfy the cities because subventions will have to pass through oblast and raion state administrations. Thus, they will arrive in cities when it is too late.”
It remains unclear to the association why the norm was retained, considering its ineffectiveness. According to Pittsyk, “unfortunately none” of the subventions allotted from the state budget for housing and public utilities “have been financed,” even though the government allotted the money in July. Clearly, the chain that is intended to bring money straight to the city “is still at the development stage.”
The mayor of the city of Ukrainka, Pavlo Kozyriev, agrees. “In my opinion, an extremely misguided practice of subventions has emerged today: after all the money is collected throughout the country, they begin to distribute the funds from Kyiv. Thus, it is harder for small towns than for large or medium-sized ones because another element, the raion councils, has been added to the chain through which the subventions pass.”
Winter will come to unprepared or partially prepared cities. The data collected by the Association of Ukrainian Cities and confirmed by the Ministry of Housing and Public Utilities, are proof. In Ukraine 220,000 houses are supposed to be built by the fall- winter period of 2007-08. Both state and local budgets have allotted 733 million hryvnias for this purpose. “As of Sept. 1, practically 430 million, i.e., somewhat more than half, have been financed, but the rest of the money has not reached our cities. And these are programs for repairing roofs and elevators, tidying the landscaping near houses etc.,” Pittsyk says. As of today, “770 kilometers of heating networks were supposed to be repaired, but repairs have been done only on 425 kilometers.” City transport is not 100-percent ready because only 69 percent of the planned repairs of motor transport, 53 percent of streetcar rails, and 41 percent of snow-removal machines have been repaired.
The state of affairs in road financing is somewhat better: roads are 73 percent ready. A total of 3.65 million square meters of roads have been repaired.
The Association of Ukrainian Cities says that public utilities have increased their fees. “Since the beginning of the year, public utilities have consumed a total of 3,903 billion hryvnias’ worth of gas but have paid only 3,066 million. The outstanding amount is 836 million hryvnias,” Pittsyk underlines. According to his data, the financial-economic state of enterprises is as follows: branch enterprises sustained 1.16 billion hryvnias’ worth of losses during the first half of the year, 37.2 more than during the same period in 2006. “Many things have not been done because the local authorities did not receive the promised subventions from the government. Although the budgets by local self-government agencies were overfulfilled, it was thanks to the fact that they invested their own resources that we have managed to achieve the indices we have now.”
The mayor of Boryspil, Anatolii Fedorchuk, agrees with him. “Despite the fact that Boryspil’s budget was overfulfilled by 170 percent, the start of the heating season is at risk. Our residents pay for gas on time. The payments are over 100 percent; this is a good index, but our fees for this year are 700,000 hryvnias.” He underlined that 600,000 hryvnias of this amount are “not our fees, these are from the Ministry of Defense. A military unit and a military commissariat are located in our city. They are not paying us today. So at the moment we are the state’s hostages at the start of the heating season because there is a demand that the debt be forgiven 100 percent until the heating season begins. Now we have to take credits.” The mayor is outraged.
Subventions, or rather their absence, are another big problem for cities because “not a cent has reached cities on the subvention line.” Fedorchuk cites the following situation as an example. It is unclear when the results of the tender organized by the chief administration of the public utility of the Kyiv Oblast State Administration will be publicized. “We held a tender on July 12 to asphalt the roads, and we still do not have the results of this tender. The European Consulting Agency is not announcing the results, citing the lack of electric power in Kyiv,” the city’s mayor explains. He scoffs: “Imagine, Kyiv doesn’t have electricity!” A similar situation occurred at the Central Raion Hospital: the tender on upgrading the boiler house has already taken place, but no one knows when the results will be publicized.
“Today, even though there is money, we are incapable of managing it wisely. Because of the State Treasury and state purchases, road asphalting costing three million hryvnias and installing street lighting for 600,000 hryvnias have not been done. Money is on the accounts and we cannot use it,” the mayor of Boryspil admits.
Tender purchases are slowing down preparations for the winter no less than the problem of subventions. “We announced vegetable purchases for schools on Aug. 12, but the tender will take place on Oct.2. When are we supposed to buy potatoes?” Fedorchuk asks. Farmers are being asked to pay 12,375 hryvnias for a participant’s subject directory, and between 1,700 and 30,000 hryvnias have to be paid for expenses connected with signing an agreement. In view of this, it is simply unprofitable for small companies to apply for taking part in a tender because they get a relatively small order after paying out big money.
Kozyriev thinks that “when the Tender Chamber and all things connected with it come into play, it is practically impossible to carry out work and acquire money. Absolutely crucial matters for which there are absolutely real funds are still not carried through only because a procedure invented by someone practically blocks all the processes,” the mayor of Ukrainka says. “The law on state purchases should be changed. It acts as a brake.”
The Association of Ukrainian Cities adheres to the principle that “problems should be resolved where they occur.” In addition, money should not pass through oblast councils. “Ukrainka has obtained the right to implement an experimental ‘model-city.’ The government has allotted 15 million hryvnias for this project, which otherwise would be re-allotted or blocked,” Kozyriev concludes.
