No Ban On Officials’ Cars Worth More than 1.5m Roubles

September 11, 2013
A. Makhonin / Vedomosti

Alexei Navalny, the opposition candidate for Moscow’s mayor who was just beaten in Sunday’s election (according to official results) had proposed a hard limit on the cost of cars purchased for public officials. The Minister for Open Government, Mikhail Abyzov, then said that he also wanted to impose a limit on the costs of these cars. However, as The Interpreter’s Managing Editor James Miller noted in July, this and several other moves towards transparency appeared to be efforts to co-opt the platform of the opposition candidate.

Now, with the election officially over, the government has rejected the Navalny initiative. Among the members of the working group who rejected the measure is none other than the Minister for Open Government, Mikhail Abyzov. – Ed.

There will be no ban for officials to purchase cars exceeding 1.5 million roubles.

The government has rejected an initiative by Navalny, that got 100,000 votes calling it a populist move that can increase government spending.

Today the government working group [1. The participants of the government expert working group: Mikhail Abyzov, the Minister for “Open Government”(team leader), Deputy Minister of Finance, Economic Development, Industry and Trade, Regional Development, Duma deputies Sergei Zhelezniak, Yaroslav Nilovand Robert Schlegel,president of the “Public Opinion” Foundation”Alexander Oslon, chairman of NGO “Business Solidarity” Yana Yakovleva and others.] first discussed the initiative that got around 100 000 Internet votes on the “Russian public initiative” (ROA) website. This an initiative by Alexei Navalny, who proposed to limit the value of cars purchased by government agencies and state-owned companies to 1.5 million roubles. Exceptions, such as for buying a car for ceremonial purposes, are possible only by a special government decision. Navalny proposed amendments to the law on public procurement, the federal contracting system (FCS) and the law on procurement by state-owned companies.

The “Russian public initiative” is a project of President Vladimir Putin. During his election campaign he promised that the State Duma would discuss the initiatives that had gotten 100,000 votes on the Internet. Later, once he became President, he signed the a decree on RPI, and specified that the initiative has to be first reviewed by the government expert group, then the government itself and only then by the State Duma.

The Law on public procurement will not become effective starting January, and the law of the FCS replacing it provides for some ways to save money, says Kirill Stepanov, the Director of the Ministry of Economic Development FCS Department: the government will mandate standards for procurement, including the cost of cars. The law on procurement by state-owned companies sets out the requirements for openness and transparency of these purchases, but not requirements regarding purchasing of goods and services. “We see discord between the objectives of the law and attempts to set out [in it] requirements for any product,” explained Stepanov.

Government procurement is one of the few ways to support automakers not prohibited by the WTO, reminded Gleb Nikitin, the first Deputy Minister of Industry and Trade. The Ministry is also opposed to the legislative limit of the cost of purchased cars both for officials and top managers.

Legislators Robert Schlegel and Yaroslav Nilov right away suggested to submit the initiatives to the State Duma. There is an alternative draft law prepared by the All-Russian Popular Front (OPF), recalled Nilov. OPF proposes to prohibit use of official cars of value exceeding 3 million roubles by public officials officials. According to Nilov, MPs will decide which of the bills is better, but the restrictions are definitely needed.

To submit and idea to the State Duma means to bury it, replied Yana Yakovleva, the chairman of the NGO “Business Solidarity”. The public wants to limit expenditure on public officials, and it is not just about cars, Yakovlev said: “In the Prosecutor General’s Office there are heated Japanese toilet seats with a remote control and owner manual consisting of 16 points. Why do they need such toilets?” We need tools that would limit excessive spending on government orders, such as catalogs of purchased goods and services with approximate prices.

The proposal by Navalny may increase budgetary spending, warned Mikhail Abyzov, the Minister for Open Government. 80% of the vehicles procured by the state are purchased for mid-level officials, and their value does not exceed 700 000 – 800 000 roubles. If you set the bar at 1.5 million rubles, they will start buying cars at the highest possible price, said the minister.

This initiative is pure populism, but it reflects the public mood, argues the HSE Rector Yaroslav Kuzminov: “The state must respect people’s opinion.” Kouzminov suggested to halve the costs of transportation services provided to civil servants and to monetize these costs. An official gets the money and decides for himself whether to look for a car with a driver, hire only the driver and to use his own car, or just use a taxi. In this way you can achieve budgetary savings and increase the allowances for civil servants by about a factor of 2. Free transportation should be reserved only for high-ranking civil servants, but they must be required to disclose the cost of maintaining their personal vehicles. “If car maintenance costs amount to 15 million roubles a year, it is not normal,” said Kuzminov.

The cost of purchased vehicles should be governed by government and agencies regulations, not by the law, summed up Abyzov: “It is not something to be regulated by the law.” Experts’ opinions will be reflected in a report that will be presented to the government. They may be taken into consideration in the process of drafting of procurement regulations that must be adopted before the new year. According to Abyzov, the value of a car purchased for a mid-level official, must not exceed 1.1 million roubles. What should be the price of cars to top-level officials, Abyzov couldn’t tell. This should be decided by the government or heads of departments themselves based on their own needs, but the costs should be made public, he said.