Hybrid “renovation” of Donbass

How much money you need for the restoration of Donbass? A question like — “how much is a kilogram of food?”, because counting can be different and different. If only to restore the infrastructure, the amount, according to reports from international donors, will pull in $ 1.5 billion. And it is possible to calculate hard-to-explain “full revival of the economy of the region”, and then the amount will increase considerably. And even more, if you count “from lunch to the fence”. Therefore, Deputy Prime Minister Gennady Zubko calls $ 15 billion, as Donetsk Governor Pavlo zhebrivskyi — 20.

While government members believe the pre-war and unhurried pace make the decision, hundreds of millions of euros and dollars, billions of hryvnias are already being developed in the Donbas. Funds for the rehabilitation and development of infrastructure to help its residents come from a variety of sources — from state and local budgets, international donors and the humanitarian response Plan of the United Nations. Grants and non-repayable assistance, as well as loans that will need to be returned. In this single center accumulation of these funds, a single centre for the coordination of their use and control (as, in fact, a single plan of restoration of infrastructure of Donetsk and Lugansk regions) no.

Data on the amount of funding donor programs found on the website of the Ministry of the temporarily occupied territories and internally displaced persons (Minot), on the Open Aid Ukraine Ministry of economic development and trade, where there is information about current and already completed projects of international aid on the whole territory of Ukraine and in the regions. This year, the economy Ministry has registered about a dozen new projects in the Donetsk and Luhansk oblasts for a total amount of 20.15 million euros. In the government reports for the last two years also provides information about funds raised for the restoration of infrastructure of Donbass, about different assistance programmes for IDPs and affected residents of the region. In 2015, the government of Arseniy Yatsenyuk, according to the report, attracted about 1.3 billion euros.

Below — the largest of the involved amounts:

— 200 million euros to restore the infrastructure of Donbass and addressing the problems of internally displaced persons from the European investment Bank (loan program);

— 500 million euros for the financing of the state budget and of projects aimed at restoration and modernization of infrastructure in the East of Ukraine in the sphere of transport, energy, heating, energy efficiency, water supply, drainage, social infrastructure, rehabilitation and construction of housing — from the government of Germany (untied financial credit);

— 104,1 million dollars in support of population affected by the conflict in Ukraine (26 projects of international technical assistance from the governments of USA, Japan, Sweden, the EU and the UN);

— 242 million euros as humanitarian aid for the victims from the Eastern regions of Ukraine and internally displaced persons from the EU and its member States;

— 158,2 million dollars for the implementation of the humanitarian response Plan of the United Nations.

In 2016 the government of Arseniy Yatsenyuk and Volodymyr Groysman “to restore social stability, development, peace and social security” drew 126,8 million dollars. Donors and types of aid in the government’s report is not specified, however, the listed uses and amounts:

— restore social cohesion and build resilience — $ 33.7 million;

— protection of populations affected by the conflict, is 20.5 million dollars;

— psychosocial support for populations affected by the conflict

— 28,4 million dollars;

— restoration of public safety — 44,3 million dollars.

In addition, the humanitarian response Plan UN for 2016 donors have contributed of 97.8 million dollars, and the international Committee of the red cross has provided humanitarian assistance amounting to about 62 million dollars.Thus, in 2016 to rebuild the infrastructure and help people donors have made 286,6 million dollars. Thus, the amount raised by the government in 2015-2016, funds from foreign donors (1.3 billion euros and 286,6 million dollars) has already exceeded 1.5 billion dollars, in which General mission of the EU, UN and the world Bank assessed the estimated financial needs for implementation of the Program “Restoration and development of the world in the Eastern regions of Ukraine”.

These funds would be enough to Finance three components of the target program: infrastructure and social services; economic recovery and social stability; the development of peace and public security. To realize its needs in five areas (formula 2+3) — Donetsk, Luhansk and areas where he lived most of IDPs (Dnipropetrovsk, Kharkiv, Zaporizhzhya).

In September last year, the head Minot Vadim Chernysh, explaining the concept of this future state, but donor-funded programs, has announced important for its successful implementation measures: creation of multicrossover Fund the restoration of the Donbass, the approval of national targeted programs and starting an open online platform, which will accumulate information about all involved for the restoration of Donbass funds (donor and government), will monitor the progress of the projects, their executors and record the results. None of them to date not been implemented.

The state program is not approved. A Memorandum on the establishment of the trust Fund’s many partners, the government, the UN and the world Bank signed in October 2016, however, still operates, although needed to run his $ 2 million found them in equal parts was provided by the governments of Sweden and Canada. Not implemented until the end and the idea to create an online resource which, it was hoped the Minister would allow you to see a picture of the restoration of the Donbass, in General, to obtain information from all donors, recipients and performers and provide it to the society. And, most importantly, the Ministry for the occupied territories as a responsible executor of the state program would be to monitor the implementation of all projects.

The portal for economic and social restoration of the Donbass (the so-called resource, accumulating information on all projects) the Ministry promised to activate in the coming months: he is actually ready, has a large array of information — including images of the constructed objects. But so far to gather information about how and by whom funds are spent in the restoration of Donbas infrastructure under different programmes and from different sources, have to manually. And not only journalists. As evidenced by the first studies, the efforts are worth it.

The “extra” money

In July 2016 the budgets of Donetsk and Lugansk regions received about 3.8 billion hryvnia. What kind of money? It balances that were in the Treasury accounts of local governments of settlements, caught in the uncontrolled government of the territory of Donbass. In June 2016 the Verkhovna Rada of Ukraine introduced changes to the Budget code (subparagraph 4 of paragraph 24 of section VI “Final and transitional provisions”), which temporarily, until the return of these settlements under the control of Ukraine, the balances of local budgets will be credited to the special Fund of the regional budgets of Donetsk and Lugansk regions.

According to the law should be used to restore objects of social and transport infrastructure, housing, life support systems (including their contents) and socio-economic development of Donetsk and Lugansk regions. The lists of these facilities claim to be regional military-civil administration in coordination with the Verkhovna Rada Committee on budget. Next month, the Treasury has transferred the balances of local budgets: Donetsk region received of 2.84 billion hryvnias, in Luhansk — 1,029. Then head OVGA by its decree approved the List of objects and measures which have to go received the funds and they agreed with the parliamentary budget Committee. Donetsk scroll to the beginning of the year totaled 584 object, Luhansk — 151.

Since the enumeration of billions is already the tenth month, but, as evidenced by data obtained in Minot them, to put it mildly, not in a hurry to spend it. At the end of last week in the Donetsk region of funds a special Fund used only by 13.8% (cash expenses are 414,5 million UAH), Lugansk — 21% (of 216, 1 million hryvnia). That is, the lion’s share of money transferred to two of the frontline areas with a great need to restore social, transport infrastructure and housing is almost no traffic!

When such a disappointing picture appears at the end of last year, the Cabinet of Ministers (with the filing Minot) ordered to establish a Commission to review the effectiveness and target use of means of special Fund of the regional budgets. The Commission, which, in addition to specialists of ministries and departments, included staff of national police and security service, worked for almost two months. As reported ZN.UA members of the Commission, the result was the appointment of the audit and the number of criminal proceedings opened on the revealed facts of overestimate of cost of works and materials, non-work, which is reported as completed, and also on the grounds of malfeasance of regional and city officials, etc.

It is noteworthy that the conclusions of the interdepartmental Commission are not publicized, and the fact her work was interpreted by many as yet another escalation of the cold war between the Minister Vadym Chernysh and Chairman of the Donetsk ovga Paul Zhebrivsky. The reason for this confrontation is called and the clash of ambitions who’s a close confidant to the President, Governor and Minister, whose efforts in the Donbass start international donor programs; and fight for the remote controller of the flow of resources; and the competition of different management experiences. The public, of course, interested in the fact that this is a public competition officials served to improve the quality of their work is that resources (especially monetary and fiscal) was not spent on the “repair failure”, and every penny was on purpose and transparent.

So why 3.8 billion hryvnia turned out to be too tough for the authorities of the region, the needs for the restoration of which the members of the government and the Governor of the Donetsk region was announced at $ 15-20 billion? In the conclusions of the interdepartmental Commission, the response Minot informapon Center for investigative journalism, one of the reasons for the unused funds called undue centralization of control projects included in the list of objects in Donetsk region. What are we talking about? According to sources ZN.UA members of the Commission and mayors of the cities of Donbass — once on the ground formed a list of infrastructure in need of priority repair or reconstruction of Donetsk ovga received an order to replace some of the objects.

Among the recommended options for replacement were, for example, reconstruction of the Central squares of cities and towns (more on this below). Then there was the meeting where mayors are allegedly urged to make a decision on transfer of authority of the customer of works on lists of objects of the capital construction Department of Donetsk OVGA. And local councils a fan these decisions were taken. In two months, say members of the interdepartmental Commission, the Department of capital construction OVGA was able to spend 13 tenders: “the More they physically could not organize and conduct, because there are only 26 people. After that, the number of customers increased to five structural divisions of Donetsk OVGA”.

Employees of the departments, besides the usual duties fell almost 80% of orders (458 of 584 objects List). It is clear that will quickly and efficiently perform this additional work, the specialists of the departments OVGA could not, even if it worked 24/7/12. “It was not used the capabilities of local governments, the structure of which there are units capable of providing the functions of the customer on the ground, since they employ the appropriate personnel, experience and responsibility to the local community, which is especially important against the background of reform on decentralization of power. Such communities are capable, for example, of the community of Bakhmut, Kramatorsk, Mariupol, Slavyansk, Pokrovsk, etc.,” reads the Commission’s opinion, given in response Minot.

However, the part of the deputies of Kramatorsk city Council (and the city was allocated the largest amount of funds of the special Fund) does not agree with the transfer to the Department OVGA authority of the customer of works, initiated a petition to the court, demanding to cancel the decision of the Council as illegal. In the first instance won the case, but the appellate decision is reversed, and the Supreme administrative court left the decision unchanged. “These circumstances and the mass of decisions of local authorities may indicate a certain influence of the Donetsk ovga in their decision-making on transfer of powers of the customers”, — hinted at in Minuet the pressure on local councils from the regional administration.

And Pavel Zhebrivsky recognizes right — it was his decision. “We deliberately took the functions of the customer of works on this money to the capital construction Department OVGA. Unfortunately, the last 20 years in the Donetsk region, except for Donetsk, nothing was built. Management of capital construction in cities and districts actually disbanded, so this effective use of funds and proper directions, I approved the decision to determine the only customer of works, the regional Department of capital construction, the departments of primary industries, the Department of housing and highways, which is subject not to me, and Kiev.

In order to eliminate risks of corruption, was defined by the model: the design-estimate documentation (DED) orders the municipality (if he knows they won’t get money, he has no temptation to inflate the cost of the work), and the departments put orders ProZorro. That is, I divorced their functions. This meets the letter of the law, and I believe that my decision will lead to more efficient use of these funds”, — says Pavel Zhebrivsky. However, the figures — a stubborn thing, and they show that in the Luhansk region, where the OVGA has not closed on itself the authority of the customer, work on the implementation of infrastructure projects being much more intense: at the end of the government checking the use of funds of special Fund of 7% in the Donetsk region against 13.9 in Lugansk. In fact, observations of the interdepartmental Commission on holding tenders relate primarily to Donetsk ovga.

Pavel Zhebrivsky sees this as a manifestation of bias on the part Minot: say, problems in the areas are the same, and claims mostly to him. But the Commission included not only representatives of “hostile” ministries, the State audit service has checked the structural unit Donetsk ovga as managers of means of special Fund. After analyzing 194 purchasing procedures, the inspectors found violations in 85. According to the auditor, most of the funds — totaling nearly 456,5 million hryvnia – not used because of the need to Refine estimates, deficiencies in its design or because of the lack of a positive expert report; 113,9 million due to violations in the course of trading; 252,6 million — due to the fact that the workmen do not possess sufficient material resources, due to the emergence of litigation and the risks of entering into subcontracts, etc.

The Governor strongly disagrees with the accusation that OVGA, taking on the powers of local councils, simply “did not pull” such amount of work. Zhebrivskyi said that the use of funds of special Fund in the region has reached (at the end of last week) 17% (429 million) and every day will grow. “The construction industry is not a market where people went out and bought some things. For the implementation of the construction project is a minimum of six months to a year. Unfortunately, the Ministry which came with a check, not asking what the problems are in the area and how it can help, and came to look for a black cat in a dark room, where it was not. But in fact it is written correctly, is that the municipalities are poorly drafted and have to be redone. Another problem is the reluctance of large construction companies to work here, and I would really like to see a normal Kiev company that would come here to work,” — said the Governor. And to the remark that among the regularly receiving contracts companies have and Kiev, said: “But not the top ten.”

World palaces, war huts?

Familiarity with lists of objects in cities and regions offered by the local authorities but not approved by the OVGA, offering instead the most expensive, displays on the theory that the advantage provided to larger, though not critically necessary to the objects to which it would be possible to quickly master a large amount, and possibly make good money. Recall that in the Budget code directly to determine what needs needs to spend the money of the special Fund: for the restoration of social and transport infrastructure, housing, life support systems and socio-economic development of regions. Agree, the construction of the administrative building in Bahmut, over 37 million UAH or overhaul of the building of the Executive Committee in Mariupol for the 34.3 million, as well as the establishment of surveillance cameras in Ugledar for 16.6 million, it is difficult to refer to such needs.

Especially if to take into account the critical situation with water supply, provision of housing, provision of health services (specialized clinics with equipment and doctors remained in the occupied regional centers) and thousands of kilometers of broken war roads and streets. Even harder to understand the appearance in the List of an object such as the reconstruction of the sports complex with artificial ice in Kramatorsk over 54 million. The tender for these works already carried out — the winner was LLC “Construction company Krugerstraat”. It has repeatedly attracted media attention, and not just because of the enviable “good luck” on the tenders, which was easy to explain to the revolution of dignity. Co-owner of the construction company is the daughter of former Donetsk Governor, with time Regionrazvitiya Minister and people’s Deputy of regions, Anatoly Bliznyuk, Elena Bliznyuk. Ice complex will be built near the Park. Pushkin, the reconstruction of which this same company last year received from the city budget of 23 million.

“Nashi Groshi” remind that earlier the co-founder of the company was Maxim Efimov, then the General Director of PJSC “Energomashspetsstal” (EMSS), where a member of the Supervisory Board is Sergey Bliznyuk — son Anatoly Bliznyuk. 2014 Efimov — the people’s Deputy-a mazhoritarshchik, which joined the bloc of Petro Poroshenko. As they say, the stars aligned. At the ice Palace in Kramatorsk is the object of the twin the sum of: penny to penny, exactly 54 million UAH, reserved for the construction of the pool H2O Classic. For comparison, estimates of the so-called reference schools, according to the mayor of Slavyansk, is 40 million. Of course, it’s great that the residents of Kramatorsk would be a cool skating rink, and a modern swimming pool. But what an acute need to build such expensive objects at that time, as thousands of people have nowhere to live?

Paul zhebrivskyi said that the choice of these expensive objects were the local authorities. “Cities have had the financial resources, and they were determined, what features within these resources to build. This situation. Asking you if you want these objects? Need and this (the ice Palace. — approx. ed.),” says zhebrivskyi. The Governor criticizes the Commission for its observations on the construction of such facilities at the time, when people have no money to restore the property (in Slavyansk, for example, 1.5 million houses damaged). Said that the Ministry did not know the law. “The law forbids me to restore private housing, bans on the frontline to carry out construction works and to provide the money. No Marinka, Krasnogorovka, neither in, nor in other localities on the line of collision, I have no right to build. Housing, belonging to communal property, even where there is fire, is recovering. Let the Ministry will introduce a bill that would allow me to rebuild private housing. Today the restored houses in the town, and I, though in the budget the money is there, asking enterprises to purchase building materials because they do not have the right to use financial resources for private housing,” says zhebrivskyi.

The explanation is logical and based on the rule of law, but there is (not one) “but”. First, Avdeevka and opens the List of the settlements located along the frontline. Second, the law does not forbid to build temporary housing for residents of private houses damaged after shelling, or displaced. The restoration of buildings and housing in the settlements on the line of collision is contained in the lists of other programs — the state and donors. For example, in the humanitarian response of the UN in 2017 (Cluster housing) provide for the granting of urgent assistance to new IDPs and the population in risk areas and transitional solutions for vulnerable groups that can not provide for themselves or to repair damaged housing. In plans of partners Cluster housing — carrying out emergency repairs in isolated areas where active operations continue, and the list of such settlements on the line of collision, and on both sides. This year, the need for cluster housing identified in the range of 33.8 million dollars. It is possible there is no coordination.

And another important point. Pavel Zhebrivsky denies the information about the appointment on the results of the Commission’s new audit (“no audits are not carried out”) and opening of criminal proceedings. He says that criminal proceedings no — it was just “entering information in the Unified register of pre-trial investigation, and the suspicion no one communicated”. If this is true, then this is a very interesting situation because, first, what, then, are the consequences of testing of the interdepartmental Commission, who discovered a large number of violations? And secondly, criminal proceedings were opened on the grounds of malfeasance and actions of officials OVGA that directly manage billions of funds. One of them was opened on the grounds of a crime under article 364 of the UCU and concerned the conspiracy of the officers of the LLC “Krestraj-K” (one of the “lucky” Donetsk tenders Kyiv) Director of the Department of capital construction OVGA on the recognition of the winner in the tender for the overhaul of Konstantinovskaya OOSH in the amount of UAH 12 million and assignment of the funds “saved” due to the overestimation of the volume of work performed and use cheaper materials.

Two more criminal proceedings were opened on signs of the crime provided by article 366 of UCU, and also dealt with officials of the regional Department of capital construction, and also for abuse in the course of repair of schools. Violations of the acts on execution of works was signed, and work to be fully implemented. If criminal proceedings is not, as the Governor says, (and they were — they have rooms!), why or on whose behest are they closed?! 25% of projects, according to Zhebrivskyi, not even started to implement it, because the municipalities still have not developed proyektno-budget documentation, although at the insistence of some deputies it was allocated quite a large sum. “And this is a key issue because there are design institutes, the construction industry collapsed,” — said the head of the Donetsk OVGA.

And he says that he invited the head of the Commission to conduct at least one project to understand why this is so. Interesting idea! I would advise checking from Minot to accept the offer of Paul Zhebrivsky. Not literally, of course, because it is illegal, but to choose some of the construction projects for in-depth monitoring to track all the stages to find narrow and slippery places, to see the inside and based on the analysis to prepare recommendations, a draft government decision or changes to the legislation. And maybe statements to law enforcement. Today it is obvious: that the “renovation” of Donbass took place, in need of a professional and total social control, in particular the local communities.

The first step towards this should be the opening of information about all the projects and programmes that are being implemented in the Donetsk and Lugansk regions, and therefore access to the portal of the Ministry of the temporarily occupied territories should be opened as soon as possible.

This publication ZN.UA begins a series of articles about the restoration of Donbass and the implementation of programs and projects for the “development world” and assistance to IDPs across Ukraine, the monitoring of which intend to carry out several public organizations and media projects.