Archive for December, 2016

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Щасливого Нового Pоку – С Hовым Годом – Happy New Year 2017

December 31, 2016

A few wishes and words of thanks as 2016 draws to an end.

Firstly to all the readers, a humble thank you for spending a few moments to read the prose and ramblings as you do in such numbers.  Your interest in Ukraine and Odessa is very welcome, even if what you read here is not always particularly interesting.

Secondly, for all the Ukrainian friends and acquaintances of the blog, with 2017 likely to be the hardest and most difficult year Ukraine has thus far experienced both domestically and abroad, sincere wishes of of courage, fortitude, determination and of clear-eyed vision to each and every one of you.

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Happy New Year, Щасливого Нового Pоку, С Hовым Годом!

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Odessa Port Side shuts down

December 30, 2016

Having twice failed to privatise the Odessa Port Side plant during 2016, and with debts mounting to creditors such as Naftogaz, the decision has been taken to temporarily, or perhaps better stated indefinitely, close the plant down with effect from 30th December.

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Valery Gorbatko, the plant Director since 1986 has resigned – which for any eventual buyer or State operational reshuffle/efficiency/transparency policy for the plant is no bad thing.  Accepting that resignation promptly would be a wise move.

From now the cost to the State will be dramatically reduced to those of maintenance and salaries – minor costs in comparison to running the plant with a (currently) low global demand for product and high gas demands to produce it.

It remains an open question as to when or even if a buyer (or long term leaser) will be found for Odessa Port Side.

Some 2017 national budgetary discipline implemented before 2016 has ended?

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New Media Rules – ATO (Donbas) wef 01/01/17

December 29, 2016

For those few journalists that still attempt to cover the war in eastern Ukraine and the continuing almost daily death toll, be advised that with effect from 1st January 2017, new rules apply:

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“Since January 1, 2017, a new procedure of work for media representatives covering the ATO in the east of Ukraine will be implemented.

According to this procedure, media accredited to the Security Service of Ukraine will receive two types of press cards such as first and second level accreditation.

Second level accreditation press card (blue) allows working within the ATO area, except for forward positions of the Armed Forces of Ukraine. The procedure of reception of this press card is the same.

Meanwhile, the first level accreditation press card (pink, with number 1) allows working within the ATO area and allows working directly at the conflict line (at forward platoon strongpoints, company defence positions).

Media must undergo three day training at the Ministry of Defence of Ukraine (National Defence Ivan Chernyakhovskyi University — two days of theory, as well as at the 169th Training Centre of Land Forces of the Armed Forces of Ukraine in Desna, Chernihiv oblast (one-day practical training) to receive the press card of first level accreditation.

Foreign media accredited to the Security Service of Ukraine will receive first level accreditation press card only after obligatory one-day briefing!

More than 250 persons are undergoing training and will receive first level accreditation press cards this December. Considering the popularity of the training, three-day training will be conducted in January 2017, please, follow our updates.

Please note, a new procedure of visiting the ATO area is implemented as required by the Order of the First Deputy Director of the Anti-Terrorism Centre at the Security Service of Ukraine (Director of the Anti-Terrorism Operation in Donetsk and Luhansk oblasts) of 19.01.2016 No. 45 ‘On procedure of media admission to military facilities in the Anti-Terrorism Operation area in Donetsk and Luhansk oblasts’ (Annex 4, Order of First Deputy Director of the Anti-Terrorism Centre at the Security Service of Ukraine (Director of the Anti-Terrorism Operation) of 27.10.2016 No. 555).

If you have questions don’t hesitate to contact us +38 (067) 223 16 43; (044) 245 44 01″

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Odessa – Write your own headline (It would be funny if it weren’t so sad)

December 28, 2016

In local news a headline appeared that simply demanded further reading.  It read “In Odessa region a school toilet was inaugurated:  A ribbon cutting and dancing”.

It has to be said that your author’s parents always took a very dim view of what they termed “toilet humour”, which in their definition had little to do with funny toilets or anecdotes about ablutions and the physical activities that occur within, but rather humour that was more than a little “off colour” or “beyond the pale”.

However, erudite as the readership of this blog is, there will be those that will create their own headlines for this event, and others that will find the entire event “off colour”.

One of the rural schools in Rozdilna Rayon (Odessa Oblast) quite literally had a ribbon cutting event to open a toilet at the school!

The grand toilet opening (Photo courtesy of Dumskaya)

The grand toilet opening (Photo courtesy of Dumskaya)

Perhaps it is right that toilets in a school are a reason to be celebrated – particularly if there have been none prior.  A reader may ponder just how many student hours have been saved in the absence of “Please Miss, can I go to the toilet?” if there is no toilet to go to.

Nevertheless, most readers would expect that a nation that can provide electricity, heating, teachers and an education at a school in rural Ukraine, to also be able to provide ablutions.  Surely toilets in a school are more of an expectation than something to celebrate?

It has to be said that the blog gets invitations to various events, many of which are nothing more than the official opening of an official envelope, an hour or so of polite chit-chat and perhaps a few nibbles and away.

Not once has an invitation arrived to attend the opening of a school toilet.  Clearly the blog sits upon the wrong distribution/invitation lists for such events.  However, over the past decade or more in Odessa, there is no recollection of a ribbon cutting ceremony for a school toilet.

New school toilets (Photo courtesy of Dumskaya)

New school toilets (Photo courtesy of Dumskaya)

Readers, ask ye not where are the doors, for no answer can be given.  Perhaps the juvenile sensitivities of rural Ukrainian pupils are far less than those of the juvenile sensitivities of its urban school children.  All things considered, perhaps this is a such a step to modernity (and sanitation) compared to what existed before.  A reader may well ask what existed before.  Perhaps the children were simply defecating in the school playground for the amusement of lost tourists passing by?

(Photo courtesy of Dumskaya)

(Photo courtesy of Dumskaya)

How many local politicians and dignitaries actually get invited, and turn up, and take part in ribbon cutting ceremonies for school toilets?  Obviously Felix Segal the current Chairman of the District Council decided it was a worthy photo op – as did several other officials.

With such a major blessing being bestowed upon the school, a reader is now wondering where the dancing girls are.  Fear not, some female students indeed put on a dance to celebrate they can now, albeit unladylike owing to the toilet design being little more than a wipe clean hole in the floor, go to the toilet.

(Photo courtesy of Dumskaya)

(Photo courtesy of Dumskaya)

What school principle has their teenage females dancing for officials to celebrate the opening of a school toilet – something which the school should have.

How to interpret this entire event?

To be angry and dismayed that school toilets are now ribbon cutting PR events for local politicians?  Undoubtedly.  That school principles have their girls dance in gratitude for such retro-Soviet privacy-less ablutions?  Certainly.

Yet mindful of a father that forever proclaimed “sarcasm is the lowest form of wit” it is still rather difficult not to arrive at numerous sarcastic headlines.

“Pupils who couldn’t give a sh*t before, now do!”

“Ukraine takes another step toward Europe – toilets opened in schools with due pomp and ceremony!”

“Ukraine leaps ahead of Europe with the ultimate socially  liberal “no privacy” toilets for school kids!”

“Environmentally friendly Ukraine bans natural and man-made doors on school toilets”

“Scandal at Ukrainian rural school – pupils resort to wiping their arse with ribbon due to toilet paper shortage” (there’s none in the photos).

Naturally when the costs of the toilets becomes known and the inevitable budget plundering scandal rears its inevitable head, the toilet humour headlines will not end there.

In the meantime, a reader is left to make their choice of dismay that school toilets have become ribbon cutting events with dancing girls (pupils), or whether in the festive period to engage in their own headline writing for this incredibly bizarre PR event.

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Civil Service reform – 12 months later, sabotage?

December 27, 2016

One year ago, the blog lauded the passing into statute of a new civil service law, a law that addressed two significant historical issues – “…..the Ukrainian civil service has frequently appeared as a source of disillusionment and frustration.  The reasons for this have been many, but primarily relate to two distinct causes – the first legislatively, and the second functionally (as has oft been stated here…..”.

That entry however contained a caveat – “It now falls to civil society and the diplomatic corps to defend this law from politically sabotaging “amendments”, but it also now falls of the Europeans that stated they would fund the civil service reform to do so effectively not only financially, but with no small amount of leadership and determination when it comes to making the law work as it is intended.”

So where are we at 1 year later?

This entry will not concentrate upon the usual failures associated with Ukrainian policy, be that policy good, bad, or counterproductive – the usual failures of implementation.

It is sufficient to say that implementation is at the very least problematic, and also that the processes employed to deliver results/civil service appointments have been far from transparent nor the standards consistent when carrying out the basic legislative requirements of civil service appointment.

(Let us not dare speak of the seamless functioning of an effective national nervous system – which any civil service actually is.)

Shoddy, less than transparent and inconsistent implementation and internal processes aside, that such really rather good legislation has survived 12 months without sabotage is in itself worthy of note.  Those hardened souls that have several times had to scramble to man the ramparts to beat back attempts at sabotaging this statute have managed to do so – thus far.

Those battlements will have to be robustly manned once again in 2017, for sabotage is once more at the gates.

MP Artur Gerasimov has submitted Draft Bill 4370-1 which would effectively destroy much of the right-minded text within the current statute.  His proposed amendments would critically undermine the a-political and professional civil service the current legislation provides statutory framework for.

Not good when institutional independence, structure and processes have to be robust enough to repel political shenanigans if Ukraine is to move forward with a fully functioning State nervous system.

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Who then (and perhaps what) is Artur Gerasimov, that would seek to undo one of the very few laws of real quality that the Verkhonvna Rada has managed to pass (and that came into effect from 1st May 2016)?

Mr Gerasimov is a parliamentarian from the presidential party.  Indeed he is a recognised “presidential representative” within the Verkhovna Rada.  Ergo that the President is unaware of Draft Law 4370-1 being submitted by his Verkhovna Rada envoy is somewhat unlikely.  The question is whether Mr Gerasimov submits it (deniably) on behalf of The Bankova and by extension President Poroshenko – or not.

If not, then who does he submit such a toxic Draft Bill for?

Without providing an unnecessary curriculum vitae and full personal history, a brief outline of the last few years is sufficient to paint a picture of this legislative assassin.

Skimming over his various scandals mostly contained within the Donbas, it is sufficient to state that he is closely associated with Sergei Shakhov a dubious “businessman” (read organised crime) from Luhansk.  Mr Shakhov in turn is closely associated with former Prosecutor General Viktor Pshonka, part of “The Family” that formed the elite of the former Yanukovych regime.

Indeed Mr Gerasimov stood for election to the Verkhovna Rada in a single mandate seat ably supported by the shadowy team of Sergei Shakhov.  Part of that team was Igor Bezler and his organised thuggery – yes the Igor Bezler of Donbas warlord and “separatist” infamy.  That is not to imply Mr Gerasimov has any (overt) separatist tendencies.  Mr Bezler’s participation in the election campaign of Artur Gerasimov clearly occurred long before the current events within the Donbas.  Nevertheless Mr Bezler and team were employed for the purposes of intimidation and voter bribery.

The outcome however was that Mr Gerasimov came second in the single mandate vote for his constituency and therefore did not reach the Verkhovna Rada (and lobby for/defend the interests of Mr Shakhov and others in his orbit).

During that failed 2012 election campaign, Mr Gerasimov did not hide the fact that he was in the orbit of Petro Poroshenko.

A reader will not be surprised therefore that Mr Gerasimov eventually made it to the Verkhovna Rada in 2014, not by winning a single mandate seat, but via the plain sailing of proportional representation and the party list of President Poroshenko’s party.

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Indeed it appears Mr Gerasimov and President Poroshenko go way back – although specifically how and why remains somewhat opaque.  Nevertheless as President Poroshenko puts loyalty ahead of ability, for him to tap Mr Gerasimov as the presidential representative within the Verkhovna Rada in May 2016, there is some form of personal bond and/or understanding.

Whatever the case, unsubstantiated rumour has it that Mr Gerasimov was selling candidacy for single mandate seats, as well as for local governance, for the presidential party during the elections having been given a party list spot and the Donetsk region to “administer” for the presidential party electioneering.  (Maxim Efimov is apparently one such successful buyer and two stories broke in local media in two locations by candidates allegedly wronged.)

Also closely associated with Mr Gerasimov is MP Oleg Nedavoy.  Mr Nedavoy is inextricably and undeniably linked to the wanted and much loathed Yuri Ivanyushchenko, a close ally of former President Viktor Yanukovych.

There is perhaps no need to continue and sufficient has been written for a read to draw their own conclusions about the character and morality of Mr Gerasimov.

From this glossary however, it is difficult to see who benefits (the most) from Mr Gerasimov’s Draft Bill 4370-1 if not The Bankova, or those most trusted by the President to (deniably) misuse the system the “right way” – Messrs Granovsky, Kononenko and Berezenko.

If this draft Bill passes through the Verkhovna Rada then toxic executive political interference will once again legitimately sully and/or mortally wound the internal workings of the civil service.  The President will then either sign it into law if the cacophony of shrieks and screams from European “friends” and Ukrainian civil society prove not to be loud and rude enough, or he can veto it and the issue can be internally spun as a false flag for external consumption and “proof” of an unwavering trudge toward European normative.

If the Europeans and Ukrainian civil society have any sense however, the maximum efforts will be made to have this Draft Bill withdrawn, or smothered by the relevant Verkhovna Rada committee before it ever gets as far as a vote.  A large diplomatic stick should be wielded now – proactively.

Still, regular readers all knew that quality legislation would sooner or later be subjected to attempts at sabotage – it always is in Ukraine.  That’s why 1 year ago the blog warned that would be the case.

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Treading on the toes of Angels – Odessa machinations

December 26, 2016

The name Alexander Angert also know as Angel to use his mafia name, has appeared in this blog numerous times (a reader may use the search facility if particularly interested).  How could it not?  His links with Mayor Trukhanov and Alexander Zhukov (father of Daria, the current Mrs Roman Abramovich) among others of notoriety and the numerous joint and associated business enterprises that do well out of City Hall and Ukraine more broadly, demand that every now and again his name is mentioned.

Indeed Mr Angert was mentioned so often by Yuri Lutsenko when he was Minister of Interior in the Tymoshenko government it would be difficult to have seen him as anything other than a personal nemesis.  (A reader may ponder why he no longer mentions it now he is Prosecutor General).  Misha Saakashvili as Governor was also not adverse to throwing Mr Angert’s name about when it came to the organised criminality in Odessa.

Mr Angert no longer lives in Odessa – but he does visit when the situation is serious enough to demand he personal participation in a “negotiation”.  His last know place of abode (for many years) is London.  Indeed if asking the personal assistant of Mr Zhukov who also lives in London, messages can apparently reach Mr Angert through that channel.  (It seems that via this route Leonid Minin can be reached in Rome too).

The full extent of Mr Angert’s (business) interests is very difficult to gauge.  In some cases his control is “unofficial”.  Others there are clearly cut outs who are known associates.  There are overtly known long term business partners like Igor Uchitel.  There are even one or two business where Mr Angert’s name actually appears.  Thus quite where all the metaphorical and literal bodies are buried is unknown – but there are definitely both metaphorical and literal bodies buried.

Perhaps the best way to identify the assets controlled by Mr Angert are those in Odessa that were left alone by Viktor Yanukovych and “The Family” from 2010 to 2014.  Former President Yanukovych did indeed meet with Mr Angert in Odessa and whatever was said between them seemingly saved Mr Angert’s interests from the attentions of “The Family” – or perhaps saved “The Family” from a slighted and vengeful “Angel”.

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Of the businesses that are transparently associated with Mr Angert, one is Odessagaz.  It is co-owned by Messrs Angert and Uchitel and has been for decades.  Neither oligarchs such as Firtash or Kolomoisky and not former President Yanukovych have ever made an attempt upon Odessagaz, nor interfered as they have with other regional and national gas companies.

Clearly tangling with those behind Odessagaz was not worth the blood and treasure – even for such odious, nefarious and powerful men.

Any regular reader is well aware of the frequent mention of the business appetites (by hook but mostly crook) of Igor Kononenko, President Poroshenko’s long term friend, occasional business partner and parliamentary “leg breaker”.  He is, to be blunt, as bad as they come when it comes to scams, schemes, and coercion.  His current appetites and methodology as to feeding them have hardly gone unnoticed – neither has the completely absent desire of President Poroshenko to rein them in.

It would appear however that Mr Kononenko is about to go not only where angels and oligarchs fear to tread, but indeed is about to stand on Angel’s toes.

Mr Angert, or more precisely Odessagaz, for many, many years has been trying to bring about the insolvency of Odessa CHP (thermal power plant).  Bankruptcy petitions have been made and various internal nefarious financial acts have been “encouraged” of the employees within Odessa CHP by Odessagaz (Mr Angert).  The net result was to engineer the bankruptcy of Odessa CHP beholding of large debts to Odessagaz who would then take Odessa CHP as debt settlement.

Recently however, that plan has quickly been undone via the purchasing of a significant quantity of Odessa CHP debts by Energomerezha.  This company is controlled by the brothers Surkis who are in turn puppets of Igor Kononenko.  In buying up those debts Energomerezha has therefore taken control of Odessa CHP financials that can either prevent Odessa CHP bankruptcy or assume the role of leading creditor thus undoing the plans of Odessagaz (Mr Angert).

In short when Energomerezha decides to allow Odessa CHP to go bankrupt at a time of its chosing it would be the largest creditor with a claim to taking control of the asset as settlement.  Thus that can be expected when all the ducks are lined up to insure the loser would be Odessagaz – and by extension Mr Angert.

(In the meantime as usual there is a scam whereby an agreement has been reached between Odessa CHP and Energomerezha that enables Energomerezha (read the brothers Surkis and Igor Kononenko) to clear UAH 1000 in profit for every thousand cubic meters of gas).

Quite how this situation will play out remains to be seen when even the appetites of Yanukovych, Kolomoisky and Firtash left the machinations of Angel well alone in Odessa.

Perhaps Messrs Kononenko and Angert will come to an agreement amicably.

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Or perhaps there will be made an offer than cannot be refused.

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Odessa investment projects – Berezyne – Besarabyazka rail reconstruction

December 25, 2016

Immediately prior to the festive season getting under way, the blog was invited to the Odessa Regional Administration by a friend who is head of the Investment and Tourism Department, Roman Kozlovskyi.

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He and his team can be found on the 6th (top) floor within the rabbit warren that is the Odessa Regional Administration building.  (Thus any investor that enters this labyrinth is effectively at his mercy when it comes to actually finding their way out again.)

The result was a commitment by the blog to highlight some of the best opportunities for investment from a particularly long list.  It will also bring to the attention of certain project initiators some of the worst project offerings.  Some projects should be pushed as they are good projects for all concerned.  Others should be pushed into the rubbish bin of wishful but financially retarded thinking.

As such, ad hoc, entries will appear over the coming weeks relating to the good, the bad (and some ugly) investment projects within the Odessa Oblast

This entry highlights an investment project that seems viable.

In 1999 the rail connection between Berezyne and Besarabyazka was dismantled for reasons that would seem politically rather unclear, if criminally somewhat more understandable.

The 1999 dismantling of this section of railway thus pushed goods moving between Moldova to and from the ports of Odessa via rail to go through the Kremlin sponsored enclave and smuggling haven of Transnistria, an area that falls beyond the direct control of Government Moldova.

As such the reconstruction of the Berezyne – Besarabyazka rail link would provide a goods rail link avoiding Transnistria entirely.

Accordingly any investor could be assured both Governments of Ukraine and Moldova would be very much in favour of using this reconstructed route for commodities such as coal, fertilizers, oil, black metals and iron ore.  Indeed, reading between the lines, it is almost assuredly the case that such commodities would be immediately rerouted once the new track is in place.

Such assurances would naturally bring about numerous obvious methods for generating a return on capital employed for any investor – whichever method is ultimately agreed with the Odessa Regional Administration (there is certainly a degree of flexibility to accommodate any investor within the ORA).

It is hardly a difficult task to monitor the track usage and tonnage transported when only Ukrzaliznytsia and Calea Feratadin Moldova (both State owned rail entities) will use the track.

As is often the case, investors see most risk in the construction phase of any project.  Indeed for really large investments such as PFI schemes it is common practice to refinance a project after the construction phase is completed and that risk is thus removed.

Thus to some basic numbers – for that is what counts for any investor.  (For a full and detailed numbers breakdown a reader/investor is invited to contact Roman Kozlovskyi via the following email:  rkozlovskyi@odessa.gov.ua or the blog can provide his mobile number more privately.)

Clearly there will not be much environmental impact in the reconstruction of a preexisting rail line.  Most of what is required is already there by way of ground works and utilities.  Thus the laying of 21.5 kilometers (20 in Ukraine and 1.5 in Moldova) of track and whatever ground work is required is not an infrastructure project haunted by unknown and unseen technical issues.  The Odessa Regional Administration figures suggest 9 months to complete the project with a team of 30.

The investment sought is UAH 398256930, or about $15.4 million (exchange rate depending).  Hardly a large sum, and in fact perhaps far too small for some investors to consider.  Nevertheless, such is the low risk nature of this infrastructure project and the obvious methodologies provide that return on investment will be fairly swift and attractive, it therefore falls into the category of a good project for consideration.

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