Business

Rada imposes moratorium on seizure of Pivdenmash property and funds

Members of the Verkhovna Rada supported in the second reading the draft law No. 12271 on a moratorium on the seizure of property and funds of the state defense enterprise “Makarov Southern Machine-Building Plant” in Dnipro. This was reported by the co-chair of the European Solidarity faction Iryna Gerashchenko, according to [Kommersant]

“246 MPs voted in favor of the bill.

The bill also lifts the freeze on Pivdenmash’s funds. The moratorium will remain in effect until the end of martial law.

The explanatory note to the draft law states that the state-owned enterprise Production Association Yuzhnyi Makarov Machine-Building Plant, despite the destruction caused by regular rocket attacks and the damage caused, uses all budget allocations and funds received exclusively for the implementation of state defense contracts, but it is not allowed to pay off existing wage arrears from these revenues. And the only realistic way to seriously increase the quantity and improve the quality of domestic launch vehicles is to increase state support for programs aimed at increasing the main financial resource of the state enterprise.

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The draft law proposes to temporarily suspend enforcement actions and measures of enforcement of decisions (including seizure of property and funds) for the state enterprise “Production Association Yuzhny Machine-Building Plant named after A.M. Makarov” for the period of martial law.

This is not the first time the Parliament has tried to help Pivdenmash

In July 2020, the Verkhovna Rada of Ukraine, for example, adopted in the second reading and as a whole a law on the repayment of wage arrears of the state enterprise Production Association Yuzhny Machine-Building Plant named after A.M. Makarov in the amount of UAH 300 million, and also postponed the company’s debts to the budget. In particular, UAH 210 million was earmarked for repayment of wage arrears and related payments, and UAH 90 million for repayment of the tax debt on the unified social tax.

But the crisis at Pivdenmash started much earlier. While in 2012 Pivdenmash was among the world’s top five launch vehicle manufacturers, between 2012 and 2019, due to a lack of orders, the company halved its production volumes, which led to layoffs and debt accumulation.

As reported by [Kommersant], the day before, the Verkhovna Rada also extended the moratorium on bankruptcy of state-owned mines. According to the authors of the draft law, lifting the moratorium would lead to bankruptcy and further liquidation of mines, which would threaten the country’s energy security.

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