In a month and a half to two months, 20 large kiosks selling "social" bread at a fixed price and other food products will appear in every district of Kyiv. The Kyiv City State Administration explains the need for the new small architectural forms as a concern for low-income residents. However, behind the scenes at City Hall, there are suspicions of something sinister: KV sources believe the authorities are simply seeking to legalize the new kiosk chain in the capital. Azarov's Kulinichi Corporation is suspected of being a contender for a monopoly.
The decision to announce a two-week tender for the placement of 200 pavilion-type temporary structures (TS) in Kyiv (20 for each district) was made at a meeting of the Kyiv City State Administration's Investment Commission on August 2, 28.08.2014. According to Ihor Nikonov, First Deputy Head of the Kyiv City State Administration, this requirement arose due to Kyivkhlib's decision to raise prices on its products.
Bread around the head
"The winner of the competition will be the bakery manufacturer that agrees to maintain prices for 'social' bread varieties (this product must make up half of the pavilions' inventory – KV) at the same level as Kyiv supermarket prices as of early August for three years. The second criterion is that the winner must offer to pay the largest share contributions to the city budget. Andriy Vavrysh (Deputy Head of the Kyiv City State Administration's Department of Urban Development and Architecture – KV) has already identified locations for these pavilions," Nikonov reported.
In this regard, the first deputy head of the Kyiv City State Administration asked the director of the Department of Economy and Investments Nikolai Povoroznik Announce the competition as soon as possible. Nikonov also noted that representatives from five bread producers who want to participate in the competition have already contacted him.
Only one member of the investment committee did not vote in favor of legalizing the new kiosk chain in the capital: city council member and former Kyiv mayor Oleksandr Omelchenko. He did not elaborate on his position, saying only that he held a "different opinion" on the matter.
What San Sanych could have kept silent about
As is well known, the capital's leadership declares that it is waging an uncompromising war against illegal armed forces. Meanwhile, Kyiv currently has 20,000-25,000 kiosks, and not a single owner has contributed to the city's coffers this year. This is because the City Council has yet to approve the 2014 Armed Forces Placement Procedure. And the relevant Kyiv City Council resolutions, drafted by Mr. Vavrysh, are met with hostility by entrepreneurs. Naturally, Kyiv's businessmen cannot trust someone who has deceived them for the past four years, and it's not difficult to understand their position.
Trail of “Kulinich”
Moreover, everyone remembers how, last December, under virtually the same plausible pretext as today, dozens of Kulinichi kiosks were installed in Kyiv—a corporation, according to numerous media reports, owned by Oleksiy Azarov, the Party of Regions member. The kiosks were installed during a moratorium on the installation of new small architectural forms in Kyiv. Incidentally, this moratorium has not been lifted to this day.
According to a KV source in the Kyiv City State Administration, the Azarovites have now reached an agreement with the municipal leadership to legalize a network of kiosks in Kyiv (likely not called "Kulinichi") by winning an investment competition.
"Azarov's business partners acted as negotiators: Volodymyr Mysyk, a member of parliament from the Party of Regions, and Valeriy Ishchenko, a member of parliament from UDAR. They had been constantly in Nikonov's office lately. This is how the story was concocted that the investor would maintain prices on socially acceptable bread varieties. However, behind the scenes, the fact that these would be large, fully-fledged stores with a wide selection of not only baked goods but also beverages would remain undisclosed. Thus, Azarov and Co. will receive the largest chain of small architectural forms in the city, legalized through an investment competition held by the mayor's office," a source in the Kyiv City State Administration told KV.
However, Igor Nikonov assured KV that these were all dirty insinuations, and the competition would be conducted in a completely transparent manner, in full compliance with the law and the interests of Kyiv residents.
Is it legal?
But how the authorities plan to legally install 200 new kiosks in Kyiv without an approved Procedure for the Placement of Armed Forces remains unclear. This is especially true given that the Kyiv District Administrative Court on August 18th invalidated and overturned Kyiv City State Administration Order No. 2251 of December 13, 2013, "On Approval of the Comprehensive Scheme for the Placement of Armed Forces in Kyiv." Essentially, due to Vavrysh's "pranks" in developing this scheme, budget funds have been wasted, and there is currently no official Comprehensive Scheme for the Placement of Kiosks in Kyiv. How can they announce an investment competition for the installation of new kiosks if the Kyiv City State Administration is only preparing to challenge the administrative court's decision in an appellate court? After all, any kind of armed force, including pavilions selling social bread, can be placed in Kyiv exclusively in accordance with the Comprehensive Scheme. The Kyiv City State Administration leadership has been insisting on this recently.
It's worth remembering that Kyiv currently has approximately 5,200 commercial storage facilities (CS) operating. Their owners have been operating them for many years with the approval of the Kyiv City Council and the Kyiv City State Administration, paying share fees for them in 2012 and 2013. Accordingly, the owners of these structures hold Certificates of Functional Purpose for CS from the Kyiv City State Administration, including for "food retail." With guarantees from the city government, they would likely be willing to fulfill the municipality's social contract. But for some reason, no one has thought to offer these people a place in the Comprehensive Scheme and a guarantee of uninterrupted operation for five years if they agree to sell socially acceptable bread varieties at a fixed price on 50% of their display cases for three years.
For some reason, the Kyiv City State Administration needed a single tender winner and 200 new kiosks. This raises the question: how does Vitali Klitschko's team's approach to resolving the small architectural forms issue differ from that of former Kyiv City State Administration head Oleksandr Popov, whose team, according to KV, "designed" all of the kiosk corruption schemes with the same Andriy Vavrysh?
Let's remember that Alexander Popov once tried to promote something similar with his "convenience stores." Back then, everything was also done under the plausible pretext of a "Home Store" enterprise. However, it later turned out that the authorities were simply setting up "their own" kiosks around the city to make a buck.
Corruption risk
The author of these lines has no doubt that the Kyiv City State Administration, if it so desired, would be able to hold an investment competition in which a pre-selected bidder is guaranteed to win. The new leadership of the Kyiv City State Administration asserts that there have been plenty of such precedents in Kyiv in recent years.
Ultimately, things could turn out quite bizarre. For example, the city government might deem it necessary to dismantle the food kiosks currently operating. But they won't, because their owners, tired of the authorities' lawlessness, will defend them with force; there are already plenty of precedents. And the investor, having installed another 200 kiosks in Kyiv, will soon begin violating the terms of the investment agreement with the Kyiv City State Administration for commercial gain (the agreement itself, as usual, will not be made public), and the mayor's office "will not be able to terminate" this agreement.
Again, they won't be able to terminate the agreement under any plausible pretext. For example, because the "investor's" lawyers allegedly managed to interpret certain clauses of the secret agreement with the municipality to their advantage and could easily prove the Kyiv City State Administration wrong in court and demand huge compensation from the impoverished city budget.
That's just the way it is in Kyiv, unfortunately.
Dmitry Markovsky, KyivVlast
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