United to Rebuild

Source: October issue of Commercial Property magazine

For over six months (since June), the European Business Association has been operating the Ukraine Recovery Committee . Currently, it brings together 24 companies from over 15 business sectors, including construction. The Committee’s focus is a collaboration with the National Recovery Council of Ukraine concerning the aftermath of the war, and the conditions for successful reconstruction were discussed by Victoria Kulykova, the Head of the Committee Department at the European Business Association.

Tell us how the Ukraine Recovery Committee at the European Business Association was formed.

So far, the Committee is represented by the following business sectors:

• Construction, engineering, and real estate management. These industries are represented by the development companies City Capital Group and “NEST,” as well as the shopping centre GORODOK Gallery.
• Industrial equipment and electronics.
• Auditing, taxation, accounting services, consulting, and legal services.
• Fuel and energy.
• Transportation and logistics.
• Distribution and wholesale trade.
• Banking services.
• Agriculture.
• IT and telecommunications.
• Automotive industry.
• Wood processing industry.
• Travel and tourism.
• Marketing.
• Education and training, event and conference organization, certification.

At the same time, the business interest in the matters overseen by the Committee is continually growing, and therefore, we expect the list of participating companies and the industries they represent to expand further.

What are the short-term and long-term tasks of the Committee?

The short-term and long-term objectives of the Committee are as follows:

Short-term goals:

• Developing a White Paper with proposals for Ukraine’s reconstruction: The Committee serves as a cross-industry integrating platform, aiming to consolidate proposals from various business sectors and directions into a unified package of suggestions for the country’s economic recovery.
• Conducting meetings with key government bodies, embassies, and international organizations to synchronize the vision for Ukraine’s recovery: These interactions aim to align the efforts and strategies of the private sector with those of the government and international bodies.
• Analyzing information from international conferences dedicated to Ukraine’s recovery and ensuring the participation of Committee representatives in such events: This involvement allows the Committee to stay informed about global approaches and best practices in post-war reconstruction.

The Committee’s priority activities are:

• Preparation of expert materials on the priority directions and ways of Ukraine’s reconstruction.
• Development of the B2B direction, including seeking potential partners within and outside Ukraine to establish new supply chains.
• Reconstruction of damaged infrastructure, especially social facilities, housing, and commercial real estate.
• Active participation in the development of a legislative framework for Ukraine’s reconstruction.
• Implementation of the best international standards, particularly in energy efficiency, and the development of new priority business directions in Ukraine.

At what stage is the work on the White Paper, and when do you plan to finish and present it? Can we have a sneak peek into the White Paper to see what it proposes?

The Committee has already completed its work on the White Paper for Ukraine’s recovery and has submitted it for the attention of government officials, parliament, and the President’s Administration in Ukraine. Currently, the translation of the document into English is underway as the Committee plans to promote the business community’s proposals and visions for the recovery processes not only within Ukraine but also internationally. Soon, a bilingual version of the document will be published on the Association’s website.

The White Paper contains proposals concerning taxation, customs, import, trade in alcoholic beverages, construction, logistics, infrastructure, energy, energy efficiency, agriculture, environmental issues, extractive industry, wood processing industry, food issues, technical regulations, consumer rights protection, permit system, intellectual property, healthcare, labour resources, pension reform, equal opportunities and diversity policy, financial services, and electronic payments.

For the development of the construction sector during and after the war, the Association’s experts have put forward several proposals. Specifically, they pertain to regulating the issue of providing compensation for property destroyed due to armed aggression of the Russian Federation. According to the Association’s opinion, to achieve this, it is necessary to adopt draft law No. 7198 in the second reading, which would include provisions to establish mechanisms for compensation not only for destroyed residential properties but also for non-residential properties (commercial properties).

Other proposals concern the development of mechanisms for providing war risk insurance; utilizing superficies for the reconstruction of residential and non-residential properties, social infrastructure, and other real estate; ensuring transparency and public access to urban planning documentation and registration-permit procedures; establishing conditions for technical readiness in the construction sector conformity assessment system; and implementing a construction waste management system.

It is also crucial to provide the maximum number of the population with shelters to protect them from dangerous impacts due to armed conflicts, as the current number of shelters is insufficient. There are frequent cases where shelters are closed or used for unintended purposes. Therefore, it is essential to conduct an inventory and audit of existing civil defence structures as a priority. Furthermore, expanding the stock of civil defence structures should be done by utilizing existing buildings and structures that can serve dual purposes. In the future, Ukraine should implement a new effective approach to territory planning and building construction, aimed at protecting the maximum number of civilians.

What are the further steps for implementing the White Paper into reality?

We plan to conduct separate meetings with relevant government authorities to have more in-depth discussions about specific proposals in various sectors for their further consideration.

The government is developing its Plan for the recovery of Ukraine. How will the work and proposals of your Committee correlate with the actions of the government and the government program?

The EBA’s experts participated in the working groups of the National Recovery Council, which developed comprehensive proposals for necessary reforms in Ukraine. However, not all of the Association’s proposals were incorporated into the Plan. Therefore, the Committee decided to gather all business proposals in a separate document and offer them for consideration by the government leadership and certain other institutions.

Under what conditions can the reconstruction of Ukraine be successful, and conversely, what could hinder the achievement of goals?

For the successful reconstruction of Ukraine, a strategic vision of the overall reconstruction processes is necessary, along with the active involvement of local communities and businesses to implement specific projects on the ground. Adequate financial resources are also crucial to realize ambitious plans, as the estimated cost of reconstruction announced during the 5th German-Ukrainian Conference in Berlin (held on October 24, 2022) amounts to $349 billion. However, the ongoing war and frequent military attacks pose significant challenges.

Nevertheless, communication with some international partners indicates that support exists. Chancellor Olaf Scholz of Germany delivered an important message during the Berlin event, stating that investments in Ukraine are investments in Europe’s future. More and more countries, including G7 nations, are willing to support Ukraine. By the end of 2022 or the beginning of 2023, a coordination platform for Ukraine’s reconstruction is expected to be established, as announced by Ursula von der Leyen, President of the European Commission, during the International Expert Conference on Ukraine’s Recovery, Reconstruction, and Modernization in Berlin.

From the Ukrainian side, transparency, openness, honesty, and intolerance of corruption in the reconstruction process are essential to maintain the trust and confidence of donors. Rebuilding trust is the most challenging aspect of this process and must be handled with the utmost care.