The Treasury blocked almost 1 billion hryvnias for Lviv: transport and construction at risk

In Lviv, delays in treasury payments have caused problems paying municipal workers' salaries, running transportation, and constructing infrastructure projects.

Hundreds of millions blocked The mayor of Lviv, Andriy Sadovyi, told the outlet that as of 28 October the State Treasury had not executed a 4231 payment for the Lviv community totaling 901,7 million hryvnias. Of that amount, 554,1 million hryvnias are development budget funds. According to him, the problem is not a lack of money in the local budget but an inability to use it on time. "The city has the money. It sits in accounts, but the Treasury does not process payments. First of all, this affects the people who carry out work for the city," Sadovyi says. Utilities, transport, and construction at risk Delays are already affecting municipal workers. The mayor of Lviv reported that municipal service workers and street cleaners are beginning to resign due to unpaid wages. To continue operating and avoid disruptions, enterprises are forced to accumulate debts and take loans. Problems executing payments could also affect Lviv’s public transport. As Sadovyi noted, due to lack of settlements there is a risk of reducing the number of buses and trams on routes. Read also: An expert assessed the consequences of the government blocking communities’ money in treasury accounts In addition, delays complicate the implementation of large construction projects that need to meet technological timelines. Among the projects now at risk is the new overpass at the intersection of Shevchenko and Kovch streets. What Lviv expects from the government The mayor of Lviv agrees that in wartime defense funding is a priority. However, he says, communities must also fulfill their obligations to residents, maintain critical infrastructure, and prepare for winter. "We understand the complexity of the situation in the country and the need to finance defense. At the same time, communities also have their obligations — maintaining critical infrastructure, paying salaries, supporting the military, carrying out repairs, and preparing for winter," emphasized Andriy Sadovyi. Lviv expects a clear and predictable mechanism from the government and the Ministry of Finance for conducting treasury payments. This would allow communities to plan expenditures, pay contractors on time, and maintain uninterrupted operation of city services. What is happening with community payments It is worth noting that the situation in Lviv is part of a broader problem. According to the Association of Ukrainian Cities (AUC), delays in payments from local budgets’ own accounts have affected communities in all regions of the country. The total volume of unexecuted treasury payments, AUC estimates, is about 20 billion hryvnias. The government explains the delays by a shortage of funds in the single treasury account and the need to prioritize defense funding.

Due to temporary cash gaps, the State Treasury is applying a payment prioritization, which results in capital expenditures and some civilian expenses being postponed. At the same time, this situation creates risks for critical infrastructure ahead of winter.