"Progresagro" and "Progres" by Olha Lazarenko received 38 Odesa tenders

"Progresagro" and "Progres" by Olha Lazarenko received 38 Odesa tenders

Since the beginning of 2022, over a thousand electronic auctions for the sale of the right to lease communal agricultural land have been successfully held in the Odesa region. Due to Russia’s full-scale invasion, the auctions were halted for nearly a year, but later, private enterprises were transferred 10.6 thousand hectares of arable land.

Statistics show that the Odesa region held a leading position in Ukraine for revenues from agricultural land leases through Prozorro auctions. The average rent price per hectare was approximately 10,000 hryvnias.

However, in over a hundred auctions, where the same companies repeatedly won, the rent price per hectare barely exceeded the minimum fee proposed by the village councils — 3-5 thousand UAH.

For example, the farming enterprise «Progress» and the farming enterprise «Progressagro» together won 38 auctions in the Odesa region. The enterprises are connected not only by similar names but also by a common owner. They belong to Olha Lazarenko, a deputy of the Balta City Council and the wife of the head of the Podilsk District State Administration. She also holds the position of director in both firms.

In almost all auctions, companies related to the deputy competed only among themselves. Their final bids generally exceeded the initial rent price by only 300-1500 hryvnias. Only in four out of the 38 auctions won by Lazarenko did other enterprises participate. As a result, in one auction, the lease price was increased from 49 to 180 thousand hryvnias. Overall, «Progress» and «Progressagro» leased 335 hectares of land in the Balta district for 7 years. The auctions were conducted by the Balta City Council, where Olha Lazarenko is a deputy.

It is important to note that auction organizers cannot restrict who participates in the auction, as participants can register through various platforms. However, village councils know which companies operate in or around their area and can encourage businesses to participate in auctions.

Last year, one of the largest organizers in terms of successful transactions on Prozorro.Sales was the Chohodary community in the Odesa region. Since 2022, this village council has successfully held 44 auctions and leased 603 hectares of arable land for 7 years. Of these, over 400 hectares were acquired by a company whose competitor in the auctions was an enterprise with the same director and owners.

This enterprise, "Raiz-agro," is part of the "Swiss Sustainable Agricultural Holding" (SSAH). In 28 auctions, its sole competitor was the company «Oberih 15», which is part of the same group. In these auctions, the rent price increased by only 300-2000 hryvnias from the initial value.

Overall, in 28 auctions, the community’s income increased from the minimum fee by 50.4 thousand hryvnias: from 1.35 to 1.4 million on over 400 hectares of arable land. Although rent increased to this amount in several auctions conducted by the Chohodary community, in which 4 companies participated, the community’s income was on average twice the listed price. If such a trend had been observed in the auctions with SSAH representatives, the income from them could have reached 2.7 million UAH.

Electronic auctions, unlike the old offline ones, are intended to bring significantly more profit to communities. They are transparent and open to different types of businesses, which ensures competition. However, companies create fictitious competition, reducing prices.

The verification of possible collusion among auction participants is possible after the auction and is conducted by the AMCU. This is explicitly recognized by antitrust legislation as a violation, specifically as «anticompetitive concerted practices aimed at distorting auction results». Companies can be held accountable for collusions dating back many years. This is accompanied by fines proportional to the final auction price. In the case of expensive lots, the fine can reach millions of hryvnias.