No Middlemen or Hassle: Why Businesses are Opting to Obtain Special Water Usage Permits Online

In Ukraine, the introduction of an online service for obtaining special water usage permits will help businesses avoid middlemen and bribe-seekers, while regional companies will be able to save hundreds of dollars on trips to administrative service centers. The service will also allow the government to keep track of those evading resource usage fees.

In March 2019, with the support of the USAID/UK aid project, Transparency and Accountability in Public Administration and Services/TAPAS, Ukraine’s State Agency for Water Resources (SAWR) and the former State Agency for eGovernance (now the Ministry of Digital Transformation) presented a new eService for obtaining and cancelling permits for special water usage.

Since the eService was launched on March 22, 2019, 4,122 special water usage permits have been issued[1]. Of all permit applicants to date, close to 5% have opted for the online submission route[2]. Among those choosing the new format are legal entities and individuals, private and public companies, and major corporations as well as small farms and utilities – all representing both major cities (with populations over 1 million) and small communities. Although the percentage of companies and individuals switching to the online service is still low, the figure will continue to rise as users learn about the wide range of advantages that the eService offers.

Under Ukrainian law, individuals and legal entities that use more than 5 cubic meters/day of water (e.g. for manufacturing, transportation, and agriculture) are required to obtain a permit for special water usage. Previously, this permit could only be obtained in person by making a visit to a local administrative services center (ASC), which opened the door for logistical issues and the risk of bribe-taking by public officials.  

Distance Is No Longer an Obstacle

Ukraine is home to some 30,000 population centers or administrative territorial units. Although their number has decreased in the last few years, there are still tens of thousands of these centers. Meanwhile, there are only around 700 ASCs for the entire country. Previously, for most local businesses and state institutions, obtaining a special water usage permit meant having to travel to a different population center. Such a trip can present a serious obstacle in a country with bad roads and a poor regional bus network. Obtaining a permit involves making at least two trips – one to submit the application and the other to collect the permit; this is the best-case scenario because it assumes that the applicant correctly assembled the complete package of documents for obtaining a permit the first time around.

In addition to the time involved in obtaining a permit in person, there are also financial costs to consider: while the permit itself is free, every trip costs money and residents of rural regions usually have low incomes. The launch of the eService for special water use offers a more affordable solution to the time and financial burdens placed on individuals and businesses that require the permit. At a minimum, individuals and businesses can save on trips to ASCs that may be located 100 km (approximately 62 miles) or even further away in the case of regional companies.

Throughout his career, accountant Anatoly Nykoliv has had to obtain special water usage permits on behalf of the various enterprises for which he has worked. Prior to the launch of the new eService, it was normal for Anatoly to travel to the Ternopil ASC two or three times before obtaining a permit (on one occasion, it took him five trips). Anatoly currently works at the Melnytsia-Podilska Territorial Center for Social Services and Rehabilitation, which is one of the first communal establishments in Ukraine to use the eService for obtaining a special water usage permit.

The Melnytsia-Podilska Territorial Center for Social Services and Rehabilitation provides social services to the elderly and people living with disabilities. The establishment has an in-patient facility that serves as a home for 30 elderly people (including those living with disabilities) on a 24/7 basis. The Center, which also funds a rehabilitation center for children living with disabilities, is the only establishment of its kind in the Borschivsk district of Ternopil. Situated in Melnytsia-Podilska, the Center serves not only 20 villages (pop.17,000) located in that township alone, but also the rest of the Borschivsk district (an additional 65,000 people). In order to fulfill its mandate of providing social services for the young and elderly, the Melnytsia-Podilska Territorial Center requires the use of 38 cubic meters of water/day. Given that its daily water usage exceeds 5 cubic meters/day, the Center must obtain a special water usage permit which has to be renewed every five years. In the spring of 2019, it was time for the Center to renew its permit, and Anatoly Nykoliv was presented with two options – to travel as usual to the Ternopil ASC and apply for the permit in person or apply online through the SAWR’s new eService.

The small rural township of Melnytsia-Podilska is located 135 km (84 miles) from Ternopil, which equates to a 2,5-hour journey by car or a 4 hour journey by bus. One trip by car to Ternopil and back will cost nearly UAH 700 ($28) or more than UAH 3,500 ($150) for five visits to the ASC which is 1.5 times the monthly minimum living wage in Ukraine. A bus ticket currently costs UAH 135 ($5.50) on average, or UAH 1,350 ($55) both ways for the five trips that Anatoly once had to make in order to obtain the permit. Even though taking the bus is much cheaper than buying gas and traveling by car, it still amounts to two-thirds of the monthly minimum living wage in Ukraine[3]. Meanwhile, the region of Ternopil is known to have one of the lowest levels of personal incomes in the country.

Thanks to the launch of the eService on special water usage, in June 2019, Anatoly Nykoliv did not have to go to the ASC and was able to save both time and money for the Center by obtaining the permit online[4]. Reflecting on his experience with the online service, Anatoly noted: “I am very satisfied. I will continue using the online service as needed. I recommend it.”

Off Limits to Mistakes and Bribe-Seekers

Individuals and companies can now submit an application, track its status and obtain a permit for special water use without leaving the comfort of their home or office. The processing time from start to finish takes about 20 minutes. The creation of the eService has helped with another issue that frequently crops up with paper-based forms: human error.

Prior to the launch of the eService, nearly 25% of paper-based applications were rejected due to mistakes that people made while filling out the paperwork[5]. When filling out an online form, applicants are assisted by interactive tips, glossaries, built-in maps, and automatic calculations, all of which help to significantly minimize the potential for errors. Even if a mistake is made, it can be rectified online quickly and easily.

Another advantage of the eService is the transparency of the process. Oleksandr Panchenko, Chief Engineer at the Olevske Heat Transmission Networks Rent Enterprise LLC in Zhytomyr oblast, used to prepare his paperwork for a special water use permit and submit it to the relevant authorities. However, in some cases, his application would fail to pass the verification process for unknown reasons. Now, however, when applicants enter their data into the electronic fields, they will receive an instant notification telling them if something has been entered incorrectly. The eService has made the process of obtaining a special water use permit completely transparent and users can check the status of their application online at any given time. Ukraine’s SAWR is required to approve or decline a permit request and, in the case of the latter, provide an explanation within 30 days of receiving an application. The online submission of applications eliminates contact with officials, thereby minimizing the risk of corruption in this process. Previously, individual entrepreneurs or those submitting application forms on behalf of their company would often have to pay several thousands to tens of thousands of hryvnias to corrupt officials in order to receive a permit [6].

[1] This figure is correct as of January 15, 2020

[2] State Agency for Water Resources of Ukraine: 4,122 permits for special water use issued in under a year

[3] What will living wages and pensions look like in 2020?

[4] The communal establishment of the Melnytsia-Podilska Village Council, ‘Melnytsia-Podilska Territorial Center for Social Services and Rehabilitation’ obtained a new special water usage permit on June 12, 2019.

[5] Data supplied by Ukraine’s State Agency for Water Resources