About a third of auctions in Prozorro.Sale system end by signing agreements

Since early 2024, 30.2% of the declared auctions have been held in the Prozorro.Sale system. Corresponding agreements have already been signed for 25.6% of them, and the rest are remaining at the stage of signing a deal.

The relevant statement was made by Prozorro.Sale JSC Board Chairman Serhii But in a commentary to Ukrinform.

“As of July 30, 2024, 30.2% of the declared auctions were held in the Prozorro.Sale system in 2024. These are completed auctions and those remaining at the stage of signing a deal. 25.6% of them were fully completed,” the report states.

In particular, the Ukrainian Deposit Guarantee Fund has held 3,068 auctions in the Prozorro.Sale system since the beginning of 2024. Only 212 of them were successful (6.9%).

The Ukrainian State Service for Geology and Mineral Resources carried out 187 auctions, and 63 of them ended by signing an agreement. Another seven auctions are remaining at the stage of signing a deal. The total share of successful auctions is 38.5%.

A total of 1,229 lease auctions and 656 privatization auctions were held in the Prozorro.Sale system by the Ukrainian State Property Fund. Of them, 726 lease auctions (59.1%) and 245 privatization auctions (37.3%) were successful (those with agreements already signed + those remaining at the stage of signing a deal).

The successful auction organizers included also Ukrzaliznytsia JSC. Since early 2024, the company has carried out 1,328 successful auctions for the lease of railway cars (59.3% of the total auctions held).

Ukrposhta JSC has the highest share of completed agreements. In particular, 64 out of 92 auctions announced by the company ended so, which is 69.6%. At the same time, only 3.5% of Ukrposhta’s lease auctions proved to be successful (49 out of 1,411 auctions ended by signing an agreement).

“The percentage of successful auctions is just one of the indicators that can be used to analyze the organizer’s efficiency, and it does not correspond to the percentage of sold assets. After all, for the sale or lease of a certain lot, you may need to carry out not one but three or even 27 auctions,” But noted.

In his words, it is important to take into account the condition of assets offered by the organizer, as well as their type.

“For example, the winning bidder in auctions for the sale of loans receivable offered by the Deposit Guarantee Fund gets the right to demand the repayment of the loan from the borrower. However, uncertainty about when the funds can be available affects the number of bidders who will compete for the lot, the price they will offer, and how many times are needed for the asset to get sold, which is reflected in the success rate of the auctions,” But explained.

A reminder that, since the Prozorro.Sale system was launched in 2020, about 35,000 auctions had been held for the lease of state-owned and municipal assets, generating up to UAH 200,000 for the auction organizers annually.