Yet, despite moving up 28 spots compared to the previous year, Ukraine remains in 112th place among 189 nations in ease of doing business. This is nothing to brag about. The new report shows the damage inflicted by the government’s staging of non-competitive privatizations, in which key assets are awarded to close allies of those in power.
As the new report shows, Ukraine for the third consecutive year worsened its rating in the category of speed and cost of getting electricity. In this area, the country ranked 172nd, making it one of the world’s toughest places to get power. The number of days it takes is almost double compared to other European and Central Asian countries; the longer the time, presumably, the greater the need for bribes.
It appears that Ukraine only scored better than Romania, Azerbaijan and Tajikistan, as well as a number of poor and war-torn African and Asian nations. The World Bank’s ranking is based on data from Kyiv, where for almost two years the electricity supply has been controlled by Ukraine’s richest man, Rinat Akhmetov.
In late 2011, Akhmetov got Kyivenergo for what analysts said was a bargain price: $56 million for a 25 percent stake that brought the group’s interest up to 71 percent. During the bidding, Akhmetov encountered minimal competition from companies affiliated with Ukrainian billionaire Igor Kolomoisky and others who quickly dropped out.
Ironically, in a February 2012 interview with the Kyiv Post, DTEK’s CEO Maxim Timchenko, named improving Ukraine’s ranking in providing electricity as one of his “top priorities” after the Akhmetov firm obtained Kyivenergo. He said a client should be able to be connected in “no more than 10 days.”
According to the recent Doing Business report, published more than 18 months later, getting all the necessary approvals from Kyivenergo takes 150 days. In light of this, Akhmetov’s recent speech calling for new rules of the game to make business life easier, sounds like empty blabber.
If DTEK’s sole shareholder Akhmetov really means this, he should start by quickly and comfortably serve businesspeople and investors waiting for the Kyivenergo approvals.
