Kukhta: localization in procurement will lead to a $900 million loss

Кухта: локализация в закупках приведет к $900 млн потерь

The embodiment of bill No. 3739, which provides benefits to local producers with the passage of tenders, will lead to the loss of the economy at the level of $ 900 million

This was stated by Pavlo Kukhta, former acting Minister of economic development, trade and agriculture, head of political Affairs of the Kyiv school of Economics, in the program “On the money” with Alexander Mordacai on the TV channel “Espreso”.

“When we talk about this localization, we understand that it has a downside. That is, it will be easier to win tenders for our local producers. But if they now lose their market (don’t give the price or the quality that you want), it would fall on the budget of state, local, and state companies in the form of additional costs. That is, they will be able to purchase a less trite for the same money, ” said Kuchta.

He explained that “in the end, the money will be taken out of the pockets of ordinary Ukrainians” – he will be forced to pay more taxes or receive less public services in education, medicine.

“When we considered the damage to the economy estimated this total effect minus for the public sector, plus for the manufacturers, it turned out that it lost about half a percent of GDP. In numbers, this year is about 900 million dollars”, – said the expert.

The Verkhovna Rada supported at first reading draft law No. 3739, providing preferences to domestic engineering. The document obliges to have a local component in certain types of machines purchased by the state or local authorities.

The international organization Transparency International called on the Cabinet to refrain from implementing non-price criteria in procurement. The organization noted that such an initiative violates the international obligations according to which Ukraine should not give preference to any participants in the public procurement and ensure a “level playing field” in procurement for both foreign and domestic companies.

The Verkhovna Rada