THE VOLGOGRAD REGION IS OPTIMIZING OPERATIONS OF UNITARY ENTERPRISES ON COMPETITIVE MARKETS

Reduction of the number of such companies takes place in accord with the National Competition Development Plan

There are 323 unitary enterprises in the Volgograd region, of which 43 are already at the stage of liquidation and 41 are being reorganized. According to Volgograd regional authorities, optimization of public and municipal companies will help form equal conditions for private companies on competitive markets. The Volgograd region also undertakes efforts to decrease the share of entities with state participation.

More details in an interview of Galina Bykodorova who chairs the Committee of the Volgograd region on Economic Policy and Development.

- In 2019 FAS and the Volgograd region signed an Agreement on Cooperation in the field of competition, based on which a relevant Action Plan was adopted. How successful it is? What have been the most important measures?

2019-2022 Road Map for developing competition in the Volgograd region was devised and approved with direct involvement of FAS and Volgograd OFAS. The latter has provided assistance in introducing antimonopoly compliance in the work of Volgograd regional authorities and local self-government bodies.  Working meetings and workshops were organized jointly with Volgograd OFAS on developing regional markets and implementing antimonopoly compliance.

Head of Volgograd OFAS joined the Coordination Council for Competition Support that targets controversial issues and gives recommendations on improving collaboration.

Information on the efforts undertaken to support competition is published in a special thematic section on the official web-site of the Committee of the Volgograd region on Economic Policy and Development (the portal of Volgograd Governor and Regional Authority).

The most important measures include approving a list of markets for intensive competition development in the Volgograd region in view of the recently approved Competition Development Standard. Changes are put to the list of the approved key targets for competition development in the Volgograd region in line with the federal norms. 2019–2022 municipal road maps for competition development are mainstreamed оды and agreements are concluded for pursuing the Competition Development Standard in municipalities of the Volgograd region.

- How did you manage to decrease presence of public and municipal unitary enterprises? What effects, in your opinion, will their reorganization give?

In our region there are 323 unitary enterprises (out of 31 515 commercial entities), of which 43 are already at the stage of liquidation and 41 are being reorganized.

The consequences of unitary enterprises can include barriers for establishing and operating private companies on competitive markets, as they are automatically put in unequal conditions when a public (municipal) enterprise is present on such markets, absence of market control over corporate operations, which frequently results in their inefficiency.

- What markets are included in the regional Competition Development Road Map?

Systemic measures are constructed to develop competition in the region till 2022 and the measures to achieve the key competition targets on the 33 priority markets.

The Road Map cover such socially important markets for the region as: education, children’s leisure and heath improvement, social services, pharmaceuticals retail, heating supply, the electric power sector, passenger transportation, and telecommunications services, and include other significant sectors for the Volgograd region – agriculture, light industry, residential housing construction.

In terms of business development, priority is given to the following markets: vehicle repair, ceremonial services, oil products, timber processing and woodware production, extracting common mineral resources in local subsoil sites, cadastre and land-planning works, laboratory research for the purposes of issuing veterinary documents.

- At what state is implementation of antimonopoly compliance in the work of the regional authorities and municipalities? What are the results achieved by Volgograd in terms of decreasing antimonopoly violations by the authorities?

The system for observing the antimonopoly standards has been introduced by all Volgograd regional authorities and local self-government bodies so far.

Regarding the trends in violations of the antimonopoly law by the authorities and local self-government bodies in the Volgograd region:

There is a 24.5% growth in 2018 compared to 2017 (from 42 to 52). In H1 2019 a 20% reduction is already achieved in comparison with H1 2018 (from 14 to 11).

In January 2016 the amendments to the Competition Law came into force on expanding the institution of warnings considerably, in particular, to elements of antimonopoly offences in the actions undertaken by the authorities.

Now antimonopoly cases against the authorities passing anticompetitive acts or exercising anticompetitive actions can be opened only if the latter fail to execute warnings issued by the antimonopoly body.

It has led to a sharp decline of the recognized facts of antimonopoly violations. For example, 21 cases were investigated in 2016, while 40 warnings were issued.

Most warnings are executed by the authorities within the deadline and without appeals (29 out of 40 warnings were executed in 2016, 24 out of 31 in 2017 and 34 out of 46 in 2018).

At the same time, antimonopoly violations committed by the authorities still take a considerable share of antimonopoly cases.

For instance, 55% of all antimonopoly violations in 2018 were committed by the authorities; and the bulk of them (87%) – by local–self-government bodies. The most widespread violations still concern the rights for municipal property, particularly, public utility infrastructure.

- Experiences of which regions in the filed of competition development you find useful and valuable to scale up in Volgograd?

Since in 2019 we were given the powers on approving and control over investment programmes in the electric power industry, we will look into using the Tatarstan experience on establishing and engaging public control mechanisms over natural monopolies.

Another interesting regional practice is a Moscow program concerning private educational facilities, particularly, leasing practices.