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THE RICH PAY FOR THE POOR
For wealthy Kiev residents paying utility bills would not be as onerous as for any ordinary pensioner living in the capital.
Wasn't fulfilled due to the lack of adequate regulatory framework at the state level

It must be confessed that we live in a country where people have different prosperity: one earns a million a day, while the other earns a few thousand hryvnias per year.

What my idea was… I wanted to implement a project according to which in Kiev – the city which is home to at least 20% of very rich people – this very category of citizens incurred the bulk of expenses in terms of payment for utility services through differentiation of rates – for the rich they had to be high, while for the poor they had to be as low as possible.

For wealthy Kiev residents paying utility services would not be as onerous as for any ordinary pensioner living in the capital. Because it is obvious that the wealthy residents of Kiev spend in restaurants in a single night more money than any old man or woman receives a month as a pension.

In the future, I wanted to release from the payment for public services the Kievans to which such item of expenditure is extremely onerous, and there were about 650-700 thousand Kievans like that at the time.

In the first phase, it was planned to differentiate the rates for ordinary consumers and for prosperous companies and businesses with high profit – banks, casinos and restaurants.

In general, I knew that the increase in rates was a very tough sell. And that no one, even those who believed me and supported my initiatives, would cheer that. I wasn’t looking for the cheers. And all my detractors knew well at that point in time that utility rates in Kiev had to be increased.

The purpose of increasing the utility rates was primarily the desire to restore the housing and utilities sector of the capital, so that the houses and the yards on each street could offer big-city conveniences, so that the entrances were renovated, household garbage removed, elevators working, night streets illuminated. But the idea was to do it not at the expense of the Kievans, who after having paid utility bills were supposed to afford water and bread, but at the expense of the rich people and prosperous firms, for which the utility rates increase would not mean the hand-to-mouth existence and the inability to buy the vital medicine…

On October 30, 2008, a decision to increase utility rates was made at the Kiev City Council Session. On my own initiative, the deputies voted for the decision according to which the utility rates for ordinary people would remain unchanged, while for very profitable businesses they would increase 5-10 fold.

After that, I signed the relevant Order that primarily regulated the 1.08-9.5-fold increase in the utility rates for legal entities, but later it was revoked by the President of Ukraine on November 20, 2008.

On November 27, 2008, the Order of the Head of the Kiev City State Administration on increase in utility services for legal entities was signed again, which was revoked on January 12, 2009 by Presidential Decree again.

In 2009, the Order of the Head of the Kiev City State Administration on the 8.55-fold increase in utility rates for 9 categories of businesses since January 16 was drawn up and signed again, as an alternative to the previously established 9.5-fold increase for 11 categories of businesses since December 1.

This order provided for the rates increase for casinos and gambling establishments, nightclubs and strip clubs; bars in entertainment establishments; offices of political parties; exchanges, pawn shops and real estate agencies; gun shops, antique shops, jewelry shops; mobile carriers; exchange shops; appraisers.

Thus, the list of legal entities for which the utility rates were raised, was reduced from 11 to 9; car dealerships and 3-, 4- and 5-star hotels were excluded from it.

All tariffs for 9 types of legal entities were increased 8.55-fold: for heating – by 40.65 hryvnias to 46.03 hryvnias per 1 sq. m. of heated area in the heating season, for hot water supply and sewerage – by 125.13 hryvnias to 141.7 hryvnias per cubic metre, for cold water supply and sewerage – by 33.98 hryvnias to 38.48 hryvnias per cubic metre.

Accordingly, the Kiev City State Administration declared null and void the Order of November 27 on 9.5-fold increase in utility rates for 11 categories of legal entities, revoked by the President of Ukraine Viktor Yushchenko.

However, the new order was subsequently revoked as well.

In the end, I can say that during 2007-2009 I wanted to make the utility rates socially fair and introduce more than 10 different utility rates for different categories of consumers, primarily in order to gradually decrease the expenses for housing and public utilities for disadvantaged social groups, while steadily increasing the quality of services.

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