We call on public utility companies to draw clear invoices

Natural Monopolies: market barriers/abuse Kharkiv region

Subject of complaint: Kryvbasvodokanal Municipal enterprise, (Kryvbasvodokanal)
Complaint in brief: Freshteks-Ukraine Subsidiary Enterprise from Kryvyi Rih dealing with processing and coloring textile materials turned to the Council. According to the Complainant, Kryvbasvodokanal overstated it the payment for additional wastewater volumes disposal formed from precipitation and snowmelt.
The Complainant is a commercial consumer of Kryvbasvodokanal centralized water supply and sewage services. These services are provided under the contract and the relevant procedure approved by municipial council. Legislation provides the cases in which consumers have to pay for services not only from the centralized waste water disposal but from additional volumes of waste water formed from precipitation. For example, this rule works when the company owns a land plot or a building, precipitates from which is diverted to the municipal water pipeline.
Kryvbasvodokanal charged the complainant a fee for additional waste water disposal services, the amount of which varied from a few hryvnias to several thousands a month. At the same time, the regulation provides that the cost of services should be calculated based on the amount of precipitation in a particular month. That is, the larger the amount of precipitation, the bigger the amount should be in the invoice. However, as noted by the Complainant, the amounts due from Kryvbasvodokanal were not always correlated with the amount of precipitation in a given month.
The Complainant, disagreeing with the existing practice, appealed to the Council and asked for a transparent mechanism for charging payment for this category of waste water disposal.
Actions taken: The Council asked the National Commission for State Regulation of Energy and Public Utilities (NKREKP) and the Ministry of Regional Development, Construction and Housing (MinRegion) in writing to express their opinion. In addition, the Council’s investigator repeatedly discussed the complaint with the said institutions. According to the NKREKP position, no violations of licensing conditions for provision of related services in Kryvbasvodokanal actions were found. However, according to MinRegion, legislation in this area was outdated and needed to be improved. In fact, imperfection of current legislation in this area allows services abuse by suppliers when calculating the cost value. Based on the collected information in the course of investigation the investigator came to the conclusion that this situation may be treated as violation of legislation on protection of economic competition, and recommended the Complainant to lodge the application with the Antimonopoly Committee of Ukraine (AMCU). The enterprise sent a corresponding complaint, the Council provided its position as well. Based on the filed complaint, the Antimonopoly Committee began collecting information on this issue.
Result achieved: After a fairly long correspondence with the AMCU the case on possible violation of the legislation on the protection of economic competition by Kryvbasvodokanal started to be considered. The Council hopes that consideration of this case by AMCU will facilitate a resolution of a systemic problem of water disposal from precipitation. This issue is topical not only for Kryvyi Rih but also for the rest of Ukraine’s cities.

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