Hennadii Zubko, Vice Prime Minister – Minister of Regional Development, Construction, Housing and Communal Services, spoke about the decentralisation process and additional opportunities for amalgamated hromadas.

Author: Dmytro Synyak

In December, it has been three years since Hennadii Zubko has become the Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine. He has something to tell: most experts, including international ones, call the reform of the decentralisation of power, introduced by MinRegion, one of the most successful of the Ukrainian Government. Hennadii Zubko readily tells of everything he has managed to do and does not hide what has not succeeded. After all, in his opinion, the changes that concern the decentralisation of power are irreversible. Thus, all problems will be solved sooner or later.

We had our talk in the large meeting room at MinRegion. It has not changed at all over a year: the same icons of Saint George Victory Bringer and All Saints, the same unusual abstract paintings by the Donetsk artist Roman Minin. One of them is called “The Plan of Escape from the Donetsk Oblast”. It was presented to Mr Zubko by the artist in 2012, two years before the war, and now it seems to be a prophetic one. This picture seemed to add persuasion to the words of the minister, reminding what happens when the most urgent reforms are delayed.

Will roads and “road money” be transferred to hromadas?

This year, according to the Cabinet’s order, local roads will be transferred to the balance of the Oblast State Administrations. Will the AHs benefit from it?

“Previously, in case of bad weather conditions and some kind of road problems, everyone pointed to the Government and complained about the lack of money, machinery or professional competence. But over the past year, local budgets have received UAH 192 billion of their own revenues, without even an account of interbudgetary transfers. For the first time in the history of Ukraine, the volume of local budgets amounted to 50% of the state budget. Consequently, the money was received by local self-government bodies. Now let’s talk about the powers. For example, MinRegion is now setting a task for the local authorities to form a single educational space. First of all, it concerns establishing hub schools, reformatting primary schools and provision of them with school buses. Important tasks include the creation of safety centres and availability of an outpatient network. And then the question arises: how long will it take to get from point A to point B? The state of roads is different everywhere. Sometimes the settlements nearby have de facto no transport connection.”

Can this drawback be eliminated with the creation of the State Road Fund?

“Earlier, when Ukravtodor (Ukraine's state road service) compiled a road repair plan, the roads of local importance were not included therein. All efforts of Ukravtodor were applied to the trunk routes. However, in November 2016, the Verkhovna Rada adopted the law on creation of the State Road Fund of Ukraine, that should receive the funds from fuel excise duties, special duties and fines for violations such as exceeding the cargo weight limit. And from January this year, the Fund will finally start its work, having accumulated about UAH 44 billion. Of these, 35% are envisaged for local roads and 20% will be allocated to communal roads. Previously, the state did not have the right to repair the roads that pass through settlements, and the local authorities did not have the funds. Therefore, sometimes they have not been repaired for over twenty years.”

What will the situation be like now? Who will make the plan for repairs of these roads? Will hromadas influence the formation of this plan?

“First of all, it is necessary to repair the roads that are included in the plans of the hospital districts and hub schools. High-quality roads should connect peripheral settlements with administrative centres of AHs. And Ukravtodor is no more responsible for the maintenance and operation of the roads, but hromadas themselves.”

What will happen to rayon road services?

“They will now be subordinate to the oblast administrations. If we talk about machinery, there is often nothing to transfer. However, there are people who know what needs to be repaired and who are able to do this work.”

Hromadas often have a problem with the roads of rayon, oblast and national importance: these roads must, in fact, be repaired, by exactly rayon, oblast, and the state, though they frequently do not do this. How can this problem be solved?

“This problem has recently acutely emerged in the Shumska hromada, one of the largest in Ukraine. It has the money, but cannot repair the roads. This year, the issue has been resolved – the hromada will take the rayon road service on its balance – with the appropriate funds and area of its ​​responsibility. This process will take several months, but it is important that it already takes place at the oblast level. This is an example of how you can negotiate with the oblast authorities to cofinance road repairs.”

What part of the total cost of road repairs should be covered by hromada?

“In my opinion, it is better to define it on a competitive basis. Hromadas should compete for it with their projects. They will be able to compete with each other both by cost per square metre of the repaired road, and by quality.

This also applies to cofinancing. In accordance with the law, hromada must pay at least 10% of the total cost of repairs, but it is possible that one or another hromada will be willing to pay 15% or 25%. Thus, let the oblast administration choose the best offer. Last year, a third of projects (about 3.5 thousand) financed from the State Fund for Regional Development and through the subvention for the development of AHs were related to the renovation of communal roads and their lighting, despite the fact that there are no compensations for the payment of electricity used for lighting roads. Hromadas already understand that the issue of high-quality illuminated roads concerns people’s safety.”

If the local authorities do not trust the rayon road service, or if the rayon road service has long been destroyed, will any other road repair structures be allowed to be hired?

“Yes, it will. No one will demand from hromadas to keep the rayon road services not able to perform their duties. Government needs high-quality roads properly operated, repaired and maintained rather than road services. This requires market competition. Let’s imagine that oblast plans to allocate UAH 600 million a year to repair the roads. In this case, any specialised organisation can prepare a competitive offer and win the tender. No one will interfere its decisions on equipment it needs or instruct it whether to rent or purchase machinery. The state has neither to buy nor maintain machinery for the construction of roads. The machinery should belong to private structures.”

Will rayon state administrations be cancelled?

What will happen this year to the rayons fully covered by AHs? Will they still have rayon councils and rayon administrations? What will they do?

“Yes, we have a problem with duplication of functions, especially in the rayons covered by one hromada. There are seven such hromadas now. There are rayons covered by several AHs. Thus, the functions of executive committees of hromadas and Rayon State Administrations are duplicated. In order to solve this problem, we have identified a list of functions and positions that should remain at the rayon level. These include, for example, the management of social protection, financial management, management of the economy, etc. Rayon State Administration is the body that should coordinate the actions of hromadas, including those concerning the road economy. If the road is being repaired, the repair work must be done in a complex way, and not in parts, i.e. only to the boundary of this or that AH, as the probability of partial repairs under the existing conditions is, unfortunately, high. By the way, both rayon council and rayon administration will be able to attract investments for the repair of local roads. The RSA should inform the hromada about the state programmes – for example, those on livestock farming support and agricultural machinery upgrading. Please, note that the RSA will not distribute funds, but coordinate the work of hromadas. And the duplication of functions is removed by the decision of the Cabinet of Ministers.”

What functions of rayon state administrations should be taken over by amalgamated hromadas in order not to conflict with the RSA?

“First of all, they relate to sports, culture, education, primary healthcare, agro-industrial development, etc., as hromadas know better which enterprises, located on their territory, need one or another state assistance. Rayon’s coordination of this issue only intensifies the mess. Sometimes I’m blamed for allegedly destroying culture, contributing to the closure of the rayon departments of culture. I would like to ask people who make such accusations: why is culture still present, for example, in large hromadas? Local government is everywhere, and it successfully manages the development of culture.

And what should we do with rayon councils: they also have a deputy corps and a rather large structure?

“In the rayons fully covered by AHs, rayon councils are aware that they have lost their powers. We want to propose to the Verkhovna Rada to consolidate several districts. This will in some way overcome the problem of duplication of functions, save public money, and ensure the work load of the current rayon administrations and councils.

Abolition of the rayon level is not foreseen by the administrative-territorial reform. This requires amendments to the Constitution, which is a rather problematic issue. Instead, it is possible to adjust the number of rayons by the Verkhovna Rada’s decisions. At the next session, we would like to propose to the Parliament to bring the boundaries of the rayons closer to the hospital districts. For example, now the issue of the hromada formed of settlements located in three rayons of the Odesa Oblast, is being solved. What rayon administrations of this or that rayon should have a relation to this hromada, and what should not?”

Can the rayons’ issue be resolved this year?

“It needs to be resolved, as administrative expenses for rayon with several AHs as well as rayon councils and rayon administrations sometimes exceed the cost of infrastructure development in these rayons. In other words, most of the rayon’s funds are consumed by administrative expenses. It cannot be so. Therefore, we have created several effective instruments by adopting the law on voluntary accession, which allowed hromadas to consolidate. Now we are waiting for the adoption of draft law No 6466 in the second reading, which will enable the establishment of AHs by cities of oblast significance.”

Who will control the lawfulness of AH decisions: prefects or Oblast State Administration?

The Institute for the control of AH decision is still not implemented, and this threatens the national interests of Ukraine. When will this problem be solved?

“There is another problem associated with this all-permissiveness: no one monitors the lawfulness of local self-government decisions and observance of the rights and freedoms of citizens on the ground. The prosecutor's office was deprived of the general supervision, and the institute of prefects did not appear. We are trying to put control over the decisions of local authorities to the oblast administrations, but the Association of Ukrainian Cities opposed this initiative. The negotiations with the Association are currently continuing ...”

… instead, no one controls the decision of the local authorities.

“The Government proposed a very mild option: so that if the decision of the local self-government body is not in line with the legislation or is contrary to the Constitution, the head of the Oblast State Administration could restrain it and apply to the court. For example, in the neighbouring Poland, the voivode not only restrains the decision but cancels it, and then the community can sue his actions, if it does not agree to them.”

What are the consequences of such uncontrollability in practice? Can we talk about any real damage?

“Yes, we can, as local self-government bodies often do not fulfill their responsibilities. For example, Shepetivka, Smila and Slavutych were late with launching this heating season. In fact, they have the funds and laws that oblige them to do it on time. Though people were freezing, planned revenues for gas were not received, gas volumes are not used. This is a violation of article 365 of the Criminal Code – i.e. excess of power. What to do in this case? Who should apply to the court?”

The head of the oblast administration can easily do this.

“Yes, he can, but in a manual mode. He is not obliged to apply to court. And we need to create a system. Last year, several oblast councils decided to move to direct interbudgetary relations with the Government. This is pure and simple federalisation. Thus, such things need to be carefully tracked. The Council of Europe constantly emphasises the problem of the lack of state supervision over decisions of local self-government bodies. I think many people in the Association of Cities have changed their minds about the incapacity of oblast administrations. Therefore, I am convinced we will be able to agree.”

How long will amalgamation of hromadas be voluntary?

Experts and heads of AHs are convinced that the principle of voluntariness in the establishment of capable hromadas has exhausted itself, and we must switch to forced amalgamation. How long can we wait until a hypothetical head of the village council, who is at the same time the owner of an illegal quarry, gives up the money he receives, and agrees to amalgamation with the neighbouring villages?

“We are now on the path, reinforcing the motives of hromadas to voluntary amalgamation. We allowed to join existing hromadas without elections. Soon we will allow to amalgamate with cities of oblast significance. We have strengthened financial base: for example, the State Road Fund will work on the development of the AH infrastructure.

The next “candy” is the land outside settlements. Draft law No 7363, as well as the Governmental draft law No 7118 on the transfer of land powers, are another motivator that should encourage hromadas to amalgamate. We have the opportunity to attract international donor funds. That is, the instruments of influence on hromadas are not exhausted. When we see that they do not work, we will investigate the situation in non-amalgamated hromadas. If we see that there is simply a lack of responsible leaders, we will make administrative decisions. By the way, we have recently identified, together with the oblast state administrations, the centres of future hromadas that have not yet been established, and included them into the perspective plans to avoid tug war.”

It can be said that in the autumn of 2017, the reform of decentralisation of power began to hang up at the parliamentary level. MPs failed part of legislative initiatives, and most of them were not even included in the agenda. Why does the parliamentary majority, whose leaders advocate for decentralisation, and sometimes even express an admiration for the reform, pay little attention to it?

“We are in a constructive dialogue process with the parliament, and with the public organisations on this. And I'm convinced we will find a compromise.”