Victor Yushchenko has told members of the Security and Defense Council of Ukraine that the so-called housing and communal sector in Ukraine (municipal housing and utilities infrastructure) was in “profound crisis” and posed a threat to national security, according to the President`s press-office.

“The technical state of major assets of communal companies is critical; the efficiency of technological processes in the sector is still low; it is traditionally unprofitable and the process to liberalize utility tariffs is very politicized,” he said.

The President believes the major cause of low profitability of the system is its inefficient management.

“In fact, the state is a monopolistic owner of services. It limits options which business people can offer more efficiently,” he said, adding it was necessary to introduce market mechanisms and encourage private investment in the sector. 

Mr. Yushchenko complained that the companies often violated consumer rights.

“The unsatisfactory state of the sector and the inefficiency of government policies in this area result in emergencies, including technological catastrophes,” he said, expressing confidence that further delays “will inevitably cause ruination.”

The President believes it is incumbent on all branches of government to institute reforms in the sector.

“We must have a common concept to reform the sector. We must find common positions which can help all levels of government to develop a plan to resolve the crisis,” he said, urging them to have the “political will to make courageous and proper economic decisions.”

Mr. Yushchenko thinks the government should renew the system by developing competition and modern forms of self-management and self-organization, setting fair utility tariffs and adopting measures aimed at reducing their cost, improving the protection of those who cannot afford to pay higher utility bills.

He said deputies, ministers and the President earned enough money to pay high prices and demanded that poor people not pay more than 20% of their income for utilities. He said we must not “protect the rich with lower prices.”