The state of the Ukrainian Railways is critical, the rolling stock is not enough, and locomotives because of the deterioration and congestion are burning almost every day. A diagnosis of railway tracks has put the Prime Minister of Ukraine Oleksiy Goncharuk, although such is the status of the entire domestic infrastructure. To rectify the situation, the government plans at the expense of loans of international financial institutions, which have traditionally put specific conditions for the continuation of the collaboration. So what exactly Western banks help Kiev and whether without them can not do?
External control as it is
It seemed to outperform the former Minister of infrastructure Volodymyr Omelyan in subservience to international financial institutions is impossible, but his successor Vladislav Crickley succeeded. The current leadership of the Ministry refers to the EBRD poduzetnistva than the previous one, and plans to give into the hands of European bankers literally everything: Railways, highways, airports, sea and river harbour.
In the past year, the EBRD in Ukraine had 169 active projects with a portfolio of €3.6 billion Without his participation there was not any significant event in the life of the national infrastructure (construction of a nuclear burial ground in Chernobyl, the discovery of the “famous” Beskid tunnel, electrification of the railway branches of the Dolinskaya-Nikolayev-Kolosovka, etc.). For “cooperation” with Kiev, the Bank even set up a special Strategy for 2018-2023 years, where he set himself credit for “achieving parity in gas prices for consumers and import prices in 2016,” energy reform, privatization of state property and other “wonderful” things. And rightly so, the community should know its heroes.
Naturally, for such devotion to the master is not just approvingly patted the natives on the shoulder. “We will continue to support the Ministry of Infrastructure, You personally, Mr. Minister, and Your team in the implementation of such important shifts in transport and infrastructure,” he praised last fall V. Omelyan Vice-President of the EBRD Alan Pius. In the strategy of the bankers indicated that the main priority of their activities in Ukraine will increase tariffs, large-scale privatization of state-owned enterprises, banks, land for sale, as well as breaking up state monopolies.
V. Crickley decided to go ahead of its predecessor. For a start, he was promoted to Deputy Minister for European integration (Yes, there is such a position in the Ministry of Infrastructure) Alexander Kletino. Previously she headed here, “the Office of support of reforms” (Reforms Ukraine Architecture), a sort of eye of big brother, the oversight of the European Union and the EBRD to every Ukrainian Ministry. The structure ensures that the wards on the ground did everything right and a millimeter did not deviate from the specified line of Brussels. On the results of its work, the Office reports including publicly, that allows all those interested to trace the biomechanics of external governance to a specific example. If not for a sensational scandal with audioproducts deputies “public Servants”, the next step in the career of Clytini could become a Minister.
On Crickley actively taken up by the unfinished projects V. Omelyan, in the first concession of sea ports of Kherson and Olbia, and declared that “we together with our international partners [owners of the Bank] are preparing a new concession projects in the ports of the Black sea, Odessa, Izmail, Berdyansk, Mariupol. Train station – Dnepr, Kharkiv, Vinnytsia, Khmelnytsky, Nikolaev, Chop. Study the best option for concession of regional airports”.
On 25 October the Minister informed the representatives of the international expert group Egis International in the adopted and planned for adoption by the Verkhovna Rada laws in the transport sector, which would “greatly increase the list of our joint projects.” All right, ward needs not only to write recommendations of their fathers, patrons to the legislation entrusted to him by the country, but also to control them, and most importantly implementation on native soil.
“We don’t stop”, the Minister said, the next stage is to work not through local warlords, and directly with the executors of the lower level. “We are holding talks with the EBRD and want to take loans and local authorities”, – said V. Crickley in an interview on 6 December.
EBRD responsible for those who tamed
Yes, it is loans, not investments. Although, judging by the official announcement on the website of the Ministry of Infrastructure and programming documents, there is a feeling that a certain group of foreigners philanthropists donated helps Ukraine solely for the love of the spirit of the Revolution of Dignity. What exactly is the help of international organizations in building a domestic infrastructure?
First, they give the money. As a rule, neither the Bank nor many other international financial institutions do not carry out direct investments and, accordingly, do not bear the relevant risks. Invested in the capital of enterprises or facilities, the Bank rarely, only a small amount (from 2 million to 100 million), and only “if there is a prospect of sufficient profits from such investment.”
The EBRD loan issues in foreign currency, at interest “on the basis of current market rates,” which, given the political and other risks, “added margin, the value of which is known only to the customer” and the Bank. Maturities from 1 to 15 years. The maximum amount of funding — up to 35% of the project cost, but more often it is a much smaller proportion, which is often not fundamentally affect the final decision on the project.
Also, the Bank charges a variety of fees and commissions. This is a Commission for the examination of the project, for the opening of credit for the development of the scheme of the transaction, for syndication (equity in financing), the obligation (paid from appropriated but not selected loan amount), for the conversion of the loan or foreign currency exchange, as well as for early repayment and cancellation of the credit and, if necessary, and charges for late payment.
As an example of the collaboration between EBRD and Ukraine to bring its September agreement with Ukrzaliznytsia (UZ) for the modernization of national railway infrastructure by $100 million Sounds nice, but de facto we are talking about the redemption of the 17% previously placed on the stock exchange Euronext Eurobonds of state monopoly 7,929 at the rate of% per annum. At first glance, the EBRD acts as the usual credit organization, but it is only at first glance.
The BONDS and the EBRD signed a framework agreement on a loan for $100 million, cfts.org.ua
The second component of cooperation with the Bank and similar international entities is that they don’t just give money under percent (7,929% per annum in foreign currency with minimal risk — this is a great income for the West Bank), but also put forward their own conditions for their use. In the case of TIES “received from the placement will be used for the reconstruction of priority railway lines, mainly those who belong to the TRANS-European transport networks”, – said a senior adviser for external relations EBRD Anton Usov.
That is, the Europeans give Kiev the money in the debt to ensure that their infrastructure network TEN-T not ran into a dead end on the Eastern border. Funds will be used to purchase materials, “in addition, we commit ourselves also to upgrade the dispatch and communication”, explained the Chairman of the Board of UZ Evgeny Kravtsov. Unlike a commercial loan in the fact that the conditions of competition for the selection of suppliers of these materials and devices also prescribes the EBRD. By an amazing coincidence often turns out that they are European firms.
It turns out that Ukraine takes credit for exceptional for European banks conditions, building needs the European transport infrastructure, thus providing the European industry with orders for high-tech products.
Separate the specifics of the international “philanthropists” is the requirements of the financed project their exaggerated criteria of gender equality and impact on the environment and other highlights, which conducted a special study (for example, environmental audit), which does not pay the Bank and the borrower.
These numerous consultations, research, study and there is a third whale of cooperation with EBRD, which expressly prescribes that he shall reimburse the actual cost of paying the “services of technical consultants, freelance lawyers” and travel costs (tickets, food, etc.). Through cooperation with Ukraine actually lives not only the army of foreign bureaucrats and their aboriginal wards, but the crowd hang out around the international financial institutions, “experts”. In the end, the whole gang should cease to build itself from the gray cardinals and bear full responsibility for performed over the population of Ukraine experiment. EBRD responsible for those who tamed.
Nikolai Korin about