Business Update – Feb. 10: 4G, Honcharuk rebuilds infrastructure, taxpayers finance startups

Prime Minister Oleksiy Honcharuk starts the so-called Great Construction program. The program aims to modernize infrastructure in Ukraine by building or renovating major facilities in all regions of the country, according to the Cabinet of Ministers. “We are starting massive construction projects and major repairs of schools, kindergartens, emergency departments in hospitals, stadiums and roads […]

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Prime Minister Oleksiy Honcharuk starts the so-called Great Construction program. The program aims to modernize infrastructure in Ukraine by building or renovating major facilities in all regions of the country, according to the Cabinet of Ministers. “We are starting massive construction projects and major repairs of schools, kindergartens, emergency departments in hospitals, stadiums and roads all over the country,” Honcharuk said. The program will officially start on March 1, and the government has promised to provide local administrations with resources, whereas the local authorities will have to coordinate the process.

Prime Minister Honcharuk suggests creating a cabinet post in charge of economic and investment issues. “In the next couple of weeks, we will present a person who will reinforce our pro-investment pool in the government,” Honcharuk told Ukrainska Pravda. Honcharuk wouldn’t disclose the exact title of the position nor possible candidates for it. He dismissed rumors that the government is considering development mogul Ihor Nikonov, former Finance Minister Viktor Pynzenyk and former director general of Zaporizhstal Rostyslav Shurma for the job.

Honcharuk discusses free trade, investments and simplifying visa regime with Canada. During a meeting with Canadian Ambassador to Ukraine Larisa Galadza, Honcharuk said that the most pressing issue of our bilateral relations is the extension of the free trade agreement in the field of services and investment. Honcharuk and Galadza also talked about easing visa regime for Ukrainian tourists in Canada and starting a youth mobility program to ramp up student exchange programs between the countries. Honcharuk also asked Canada to support its businesses with more investment into the local economy.   

Economy Minister Tymofiy Mylovanov introduces an anticrisis package worth $816 million to parliament’s special committee. “Our main proposal is to consider the possibility of broader financing… for programs and areas to develop transport infrastructure, financial support programs, sectoral production programs, the development of the military industrial complex,” Mylovanov wrote on Facebook. The economy minister said that Ukraine needs $50 million in investment. He also named the three primary challenges for Ukrainian manufacturing: old means of production, reorienting the export markets, and the European Union’s introduction of a carbon border tax, which would tax imports that do not meet the EU’s ecological standards.

Mobile operator Intertelecom buys 4G license for over $7.4 million. The company will be the fourth carrier in Ukraine allowed to provide the high-speed mobile internet, or 4G, after Ukraine’s giants Kyivstar, Vodafone Ukraine and lifecell. Intertelecom now has a month to pay the money, Liga.Tech reports. The licence will work until 2030 and will allow the carrier to provide 4G across the whole country.

State-financed Ukrainian Startup Fund grants $77,000 to eight startups to support the development of their ideas. These local startups – AeroDrone, GeoDesign.info, BIOC, FieldBI, Pravoman, Framiore, Pytag, BioBin – work on improving agriculture, business and even on creating bioplastic, according to UNIAN.  These grants are part of a new $18-million government funding program to support Ukrainian tech entrepreneurs. The fund launched operations on Dec. 2, 2019. Since then, over 1,000 startups have submitted applications for grants, but only these eight companies have won them.

Naftogaz may file new lawsuits against Russia’s Gazprom to gain more market preferences and return stolen Crimean assets. The Ukrainian state-owned oil and gas company is considering an option to appeal to EU anti-monopoly authorities, as well as initiate new arbitration proceedings against Gazprom in Zurich or Stockholm as means to weaken Gazprom’s hold on the energy market, Executive Director Yuriy Vitrenko wrote on Facebook. Ukraine, for example, cannot transit non-Russian and non-Gazprom gas through its pipelines on the Russian border. So the company is seeking ways to change that, Vitrenko said. Naftogaz also aims to receive compensation for assets it lost after Russia annexed Crimea in 2014. On Dec. 27, Naftogaz received $2.9 billion from Gazprom. The Russian state-owned energy giant was obliged to pay Naftogaz that amount due to a February 2018 ruling in Stockholm arbitration court.

ATM producer Euronet beats tax agency in court. The company’s Ukrainian affiliate Euronet Ukraine won a Hr 64 million ($2.6 million) case against the Kyiv State Fiscal Service. The company took the agency to court after it demanded what Euronet Ukraine felt was too much corporate profit tax. One year later, the court agreed. “The Kyiv District Administrative Court cancelled the tax assessments worth Hr 64 million,” Euronet’s law firm, Integrites wrote in a press release. The court also stated that Euronet Ukraine “had not violated tax legislation and kept accounting and tax records accurately.”  Euronet manufactures, services and installs ATMs in Ukraine and 46 other countries where it operates.

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