Tymoshenko Helps a Tycoon Bag a Hr. 900M Contract

Q: What does it take to cancel an open bid and instead choose a certain company as the lead contractor?

A: The Tymoshenko Cabinet.

In yet another must-read article, Ukrayinska Pravda's Mustafa Nayem continues exploring the unstoppable wheeling and dealing in the world of Ukrainian government.

As part of preparing Lviv Airport for Euro 2012, the government initially planned to award a Hr. 900M/$118M modernization contract in an open bid. To organize the bid, Transport Minister Yosyp Vinsky sent a directive to Lviv Airport Director Oleksandr Zahreva in late January.



Four companies applied.

However, on March 17, Minister Vinsky issued another directive. This time, he ordered Lviv Airport to cancel the open bid, citing orders from PM Tymoshenko.



That’s despite the fact that reversing the course put Vinsky and Tymoshenko in violation of a host of Cabinet regulations, Nayem reports.

Guess who emerged as the lead contractor? Azovintex, a company owned by Serhiy Taruta, one of the richest men in Ukraine’s rust belt and one of the two men who serve as Tymoshenko’s allies in a region otherwise controlled by the Party of Regions.

Taruta’s partner, Vitaliy Haiduk, has been a prominent figure in the Tymoshenko Cabinet, leading a staff of advisers. He reportedly owns a plant in Hungary and, last year, had a hand in a controversial decision that set sub-domestic rates for Ukraine’s electricity exports.

Such conflicts of interests raise no eyebrows from Tymoshenko and Yushchenko, except in theatrics and in rivalry. At a recent Cabinet meeting, Tymoshenko raised the roof on Defense Minister Yuriy Yekhanurov, amid allegations of fraud in the army’s food supply contracts and land management. She demanded that Yushchenko fire him. (The Defense Minister reports directly to the President. The President's response? You're the one who's corrupt.)

Both Tymoshenko and Yushchenko came to power during the Orange Revolution, after promising to separate business from government. Once in power, they soon ended up separating themselves from their promises.

They may not be aware of it, but their selective ethical compasses bode well for companies like Azovintex.

By the time Azovintex won the Lviv Airport contract, it had already won business government-wise. In November 2008, a Turkish contractor lost the Lviv Stadium contract to Azovintex, after lobbying by Economy Minister Bohdan Danylyshyn and Vice Premier Ivan Vasyunyk, the article says.

Asked about Azovintex, Lviv Mayor Andriy Sadovyi praised the contractor and said that the open bid procedure would have taken too long.

In neighboring Poland, which co-hosts Euro 2012, the public can’t wait to get corrupt officials fired or jailed. Not so in Ukraine.

In a country where the Prime Minister ducks questions about her husband’s sources of income and the President taps people like this to run his staff, it’s “business as usual.”

Sources:
http://pravda.com.ua/news/2009/5/14/94667.htm
http://www.epravda.com.ua/publications/48904259a7aaa/

Davos Is Not Donbas, or Viktor Ya’s Dirty Little Secret

Guess who's leading the Ukrainian delegation to the World Economic Forum in Davos. You got it. It's Viktor Yanukovych, the incredible “Proffessor [sic] of Economics!” That’s what his handwritten presidential candidate application told us in 2004. Wait a minute, didn’t it also state a certain degree of proficiency in English? Sure it did. Should we therefore assume his American spin doctors put that precious information on his badge? Well, they most certainly chose not to, for fear it would make Borat pale by comparison.

To look sexy at this annual carnival that brings together business and political elites from all over the globe, Proffessor (with a double "F") masquerades himself as the head of the freshly-minted investment council. Hey, Bill Gates, Warren Buffet, and the rest of you guys out there, you better pay attention. Our man Yanukovych here means business. As a student of Kuchma, he has a way with numbers you can’t imagine. Lakshmi Mittal, a colleague of yours, paid $4.8 bn for a steel mill that our man knew just how to sell for a mere $800 mn. You get the idea.

Viktor Pinchuk of Interpipe, a renowned Westernizer, philanthropist, Kuchma’s son-in-law and, by the way, former co-owner of that steel mill, will hold a lunch-conference titled "Where Is Ukraine Heading?” Among those who plan to attend are Latvian President Vaira Vike-Freiberga, former Polish President Aleksander Kwaśniewski, financier George Soros, chairman of Russia's Vneshtorgbank Andrey Kostin, and Ukrainian American astronaut Heidemarie Stefanyshyn-Piper.

So where is Ukraine heading? Yanukovych will probably trot out the same old lines about Ukraine destined to be a bridge — the bridge — between Europe and Russia, the latter, of course, being the neighbor everybody would love to have. (Lukashenka would beg to differ on that one.) And if Freud dropped by, he’d point out that the title of the conference clearly addresses the West’s repressed concern that, with Proffessor at the helm, Ukraine is going straight to hell.

OK, let's not overanalyze our humble leaders.The Ukrainian delegation includes Economy Minister Volodymyr Makukha, commodity kings Rinat Akhmetov of SCM, Serhiy Taruta of ISD, and Ihor Kolomoisky of Pryvat. The “old man” (Yushchenko), a no show at Davos, is represented by Arseniy Yatsenyuk, deputy chief of the Secretariat.

Of course, Yanukovych will go to great lengths eroticizing that 7 percent GDP growth rate for 2006. In fact, he’ll tell you any shit you want to hear. But there’s something he will avoid any discussion of. And here’s what it is: As of today, Ukraine remains one of the poorest countries on the continent, period. Ukraine ranks a dismal 125th out of the 161 countries surveyed in the 2006 Index of Economic Freedom.

With most of the profits from our retarded industry being sucked out to offshore banks, a sizable stream of investments comes from EU migrant workers who send remittances to their families back in Ukraine.

Whether you like it or not, sex tourism could become Ukraine’s next killer app. After all, it’s slightly more humane than the sex slave trade and could provide an additional source of income for local law enforcement.

That about wraps up our economic learnings of Davos for make benefit glorious region of Donbas. Proffessors of all banana republics, go hunting!