More than a year after Ukraine co-hosted the extravagant European soccer championship, some subcontractors say that a government-chosen private contractor collectively owes them about Hr 5 million, or roughly $600,000, for work performed.
Eight companies from Lviv and Ivano-Frankivsk oblasts that took part in building the runway at the Lviv airport say the general contractor failed to settle in full. To cover for the shortages, they have been forced to get bank loans and sell part of their assets, they said.
This payment scandal is the latest chapter in the long saga of corruption scandals, abuse of public money and ensuing court cases associated with Euro 2012. Ukraine spent billions of dollars to overhaul roads and airports and constructing stadiums that stand mostly idle now.
The Lviv airport, for example, only hosted 381,000 passengers in the first seven months of 2013, way below the projected capacity of 7.3 million passengers per year. The total cost of its construction was about $575 million.
To reconstruct the old airport’s runway, the Cabinet of Ministers in 2010, through a non-competitive, single-bid procedure, chose Donetska Budivelna Kompaniya LLC (Donetsk Construction Company) as the contractor, says businessman Ivan Bodnar, who runs Prykarpatbudtrans company, a transport firm that was subcontracted for the project.
Donetska Budivelna Kompaniya is a part of Donetsk-based financial and industrial group Altcom. It hired Bodnar and other entrepreneurs like Roman Demchyna and Mykhaylo Mykhaylskyy from Lviv Oblast to transport building materials and earth for landscaping to the airport and surrounding territory.
Altcom confirmed that it has failed to pay subcontractors, but insists that the reason is the government’s failure to pay for the project that was publicly financed.
Altcom’s spokeswoman Olena Vasina said her company was owed a lot more money than its subcontractors from western Ukraine, but did not specify how much. Radio Free Europe/Radio Liberty had reported that the government owed Altcom about Hr 120 million for the Lviv airport. The company plans to pay subcontractors after receiving this money, she said.
There are a few companies and individuals waiting in line to get their cash from Altcom and Donetska Budivelna Kompaniya, its subdivision. Demchyna says he is owed Hr 700,000, Budimex company, another contractor, claims a debt of about Hr 1.3 million, Mykhaylo Mykhaylskyy is owed Hr 755,000.
In total, the outstanding debt of the Donetsk-based firm is about Hr 5 million. The subcontractors say they believe there are others who are owed money, but do not provide any details.
Donetsk Mayor Oleksandr Lukyanchenko, defending Altcom, said the government owed the company about Hr 300 million in total, Novosti Donbass website wrote in August. By the time that the Kyiv Post went to print, the government Euro 2012 agency that was in charge of preparations for the football championship failed to respond to an inquiry why and if there were problems with government payments.
But even without the Euro 2012 cash, Altcom should be in good shape financially. According to Nashi Groshi, a public procurement watchdog, in 2009-2012 Altcom got about Hr 14 billion of public money by winning procurement tenders, mostly for Euro 2012 orders.
It won the fattest tenders when the Euro 2012 preparatory process was supervised by the then Deputy Prime Minister Borys Kolesnikov. Ukrainian media suggested that Kolesnikov had ties with Altcom, but he repeatedly denied all the allegations.
The subcontractors said the payment problems started closer to the end of construction. More than a year after they completed preparations for the continental championship that took place in June 2012, they are still waiting to get paid in full.
“We could not possibly think that after signing the acceptance certificate the company would forget to pay us,” Bodnar complains. “We worked in two shifts, and in the end we didn’t get what we made.”
The businessman says that Altcom paid in installments for a while, but the trickle of money dried up several months ago.
Bodnar says that his company has financial troubles because of the client’s failure to pay. This year Prykarpatbudtrans had to sell its eight cars to service loans and to get new loans to repay old ones. At the moment, the company is owed Hr 1.5 million. However, during the last 1.5 years the company had to pay about Hr 800,000 in interest on loans, he claims.
The businessmen said they sent eight letters to Donetska Budivelna Kompaniya asking for payment, but received no reply. Bondar says that he also visited Donetsk last autumn, but the company’s management wouldn’t find time to meet with him. The company promised some of the businessmen to pay them in installments by April, but failed to do so, according to Demchyna.
Kyiv Post staff writer Kateryna Kapliuk can be reached at [email protected].
