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State monopolies delay issuing permits without offering reasons

03.12.2015

Subject of Complaint: Kharkivvodokanal, a municipal water supply and sewage utility

Complaint in brief: On June 25, 2015, the BOC received a complaint from an enterprise stating that Kharkivvodokanal’s utilization permits department had failed to approve their water management permit without giving a clear reason why. The Complainant was told to request permit preparation services from a secondary company whose prices were much higher than the market average. The Complainant also stated that it was being pressured to hire consultants who were connected to the Kharkivvodokanal permits department. Meanwhile, the Complainant was also fined for not meeting waste water standards, despite having lab analysis results that showed otherwise.

Action taken: The Complainant supplied the BOC with numerous documents supporting its claims. The BOC investigator reviewed the case and determined that the municipal utility was violating competition laws and abusing its power. However, Kharkivvodokanal refused to answer questions over the telephone, so the investigator wrote a letter asking the company for an explanation and requesting it to cease its malfeasance. The letter was not given a proper response. The BOC followed up with an inquiry with the Kharkiv Territorial Department of the Antimonopoly Committee of Ukraine asking them to investigate the case.

Result achieved: The AMC Department informed the BOC investigator that it had indeed found evidence that Kharkivvodokanal was in violation of market competition rules. Still, the utility failed to properly respond to the BOC’s recommendations. Finally, the BOC recommended that the Complainant file suit against Kharkivvodokanal. The BOC will publish systemic reports with recommendations on regulating behavior of state monopolies in QIV of 2015.