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#Ukrainian corruption in infrastructure? What results for #EU money?




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The European Union provides Ukraine with financial resources for reform and economic development. Ukraine is located at the crossroads of many transit corridors that connect Europe with other countries. The development of transit corridors for different means of transport is an important task for Ukrainian officials. The EU and its financial institutions generally provide Ukraine around 6 billion EUR in various programs for the development of infrastructure s projects.



EU assistance

Originally, some of these funds have not been used in Ukraine due to the fact that the EU wants to make sure that these funds will be used transparently, without the corruption component  .

In order to establish effective use of the funds provided, the Ukrainian government has developed a Comprehensive Plan of Action for the Implementation of the Lifecycle Management Strategy for Infrastructure Projects in Ukraine for 2020-2024 .


In December 2017, the European Union approved a new Strategic Assistance to Ukraine program for 2018-2020 ( Single Support Framework ), which was developed with regard to 3 key goals of Ukraine's support: strengthening public administration, strengthening the economy and strengthening society. The European Community supports Ukraine in its pursuit of reform and finances these projects.

The total amount of EU assistance to Ukraine during this period should be 430-530 million EUR. Funding will be provided on a “ more for more ” principle , ie there is a direct dependence on funding from the implementation of projects and implementation of the reforms agreed upon the program.

It is important for European investors to understand who and how the international assistance funds will be used for the purpose of the transport industry and transit corridors development.

Strategy of the reforms by the "new faces "

The operation of transit highways and the creation of hubs in Ukraine is provided by the Ministry of Infrastructure of Ukraine .This department is responsible for road, air, rail, sea and river routes.

It happens often so, that some good ideas are  used to cover formal use of resources or arbitrary decision implementation. Infrastructure Minister Vladislav Krykliy adheres the principle of staff  selection and appointment, based on the main criteria for him -  "new faces” . Between professionals and new people with an unknown level of expertise and training, preference is given to new people, and the level of their professionalism often does not match the level of positions and responsibilities hold by such appointees.

At the same time, the Minister of Infrastructure, who is the senior official in relation to many subordinated state-owned enterprises and subdivisions, is implementing a personnel policy that impedes the achievement of the European integration goals. About 60 heads of enterprises, subordinated to the Ministry, are in the status of acting, some structural units have no management at all.

Case of  " Delphi " tanker is indicative. This ship, under the flag of Moldova , lost the anchor in late November 2019. As a result, the tanker reached a shore near the city beach "Dolphin" in Odessa, which resulted in an spill of petroleum products and other harmful substances in the suburban water areas. Now the ship has already become a local attraction - against its background, people make pictures and selfies. It is not known, how the Ministry of Infrastructure plans to solve this problem.

Industry experts emphasize that ministry and many heads of its units do not have sufficient experience, but bear considerable responsibility for the development of Ukraine's transport infrastructure.

An example of successful business

In the transport sector Ukraine there are enterprises, which work on developing expansion of economic potential, such as state enterprise " Derzhhidrographia " ensure the provision of hydrographic and navigation services for safety of navigation in the sea area and inland waterways of Ukraine. The company maintains lighthouses and buoys, as well as other technical means which help to navigate the route for sea and river vessels.

In recent years, the team has modernized the electronic navigation system, using drones to digitize navigation maps. An important area of activity is the ordering of the navigation system and the safety of navigation on inland waterways. The company implements innovative solutions, which are being developed jointly with the National Academy of Sciences of Ukraine in order to increase the level of security and to increase the transit potential of the Ukrainian economy.

" Derzhhidrographia”  consistently protects national interests: it continues work to counteract aggression and security of sea navigation; at the request of the institution, the regional electronic map centers of the International Hydrographic Organization PRIMAR (Norway) and IC-ENC (United Kingdom) excluded Russian electronic navigational maps (ENC) of Ukrainian waters from its catalogs .

The institution is headed by an experienced professional Oleksandr Shchyptsov  , who managed the reorganization of the enterprise, whereby funds are invested in human capital development, staff trainings are carried out, equipment and vessels are updated.

The director of the Institute for Energy Research, analyst and political expert Dmitry Marunich in Facebook publicly emphasizes  that this enterprise has been able to implement a number of innovative projects that meet the best world models.

Despite this, the company and its management's were attacked by means of information campaign aimed at changing the company’s management. Former head of the institution Dmytro Padakin and Head of Maritime Transport Workers Unions of Ukraine Mykhailo Kireyev systematically fed false information to the Minister of Infrastructure , discredit the leadership of “Derzhhidrographia” and actual achievements of the enterprise. It seems that a group of individuals is interested in changing the leadership of the enterprise in its favor and establishing control over the sphere of strategic importance for the economy and security of Ukraine.

One can only hope that the Ministry of Infrastructure will properly assess the situation and make decisions solely in the interests of Ukraine.

Real problems of the industry

The Ministry of Infrastructure should pay attention to the real problems that most experts are aware of. For example, focus on the fact that the Maritime Administration of Ukraine, which is in charge for the accreditation of sailor training schools, conducts this accreditation by unclear criteria. Corruption is widespread in this area. One needs to pay shadow money to get a profile education, qualification certification, permits and admissions.

Experts and bloggers write about it , such as Ivan Niyaky , who gives details about corruption manifestations in the certification of Ukrainian sailors .

Specialists who seek to obtain a sailor’s passport, certifying qualifications, encounter several corrupt circles. All those involved in the industry are aware of these phenomena, but it seems that the Ministry and infrastructure is not aware of this.

The Ministry declares a high level of transparency in its operations, but no comments for searches that were held in the office of the state secretary of the Ministry Andriy Halaschuk by the State Bureau of Investigation and the National Police .

The European Union has previously supported the establishment of state secretaries positions in the ministries in Ukraine. The idea was that these officials should not be involved in the policy and quota principle of forming a government. But as it turned out, apolitical state secretaries may not always be anti-corruption ones.

Thus, we can conclude , that the introduction of new technologies in the transport sector of Ukraine depends on the trust of the European institutions in Ukraine. The financial resources earmarked by European partners for reforms in Ukraine's transport industry should be used to drive innovation and modern approaches to creating trans-European transport corridors and hubs in Ukraine. To this end, the Ukrainian authorities must demonstrate real steps in the fight against corruption and follow the best examples of activities in Ukraine and abroad.

Corrupt practices: raider seizure of State Hydrography

Despite the real achievements of the State Hydrographic Institution, the Ministry of Infrastructure of Ukraine sent to the Cabinet of Ministers of Ukraine on February 18 a Submission for approval by the Acting Head of the State Institution, Dmitry Padakin.  This is exactly the former head of the State Hydrography, who was fired in March 2019 and is a figure in criminal cases.

Experts state that is actually taking place in advance prepared raid capture of "State Hydrography" by the Minister of Infrastructure Vladislav Krykliy, Secretary of State of this Ministry Andriy Galuschuk persons.  This hobby was planned and is going against the economic interests of Ukraine, directed against industry experts.  The sole motive for Dmitry Padakin's appointment is to achieve the vested interests of a group of interested persons who heads the Ministry of Infrastructure and, using their official position, appoints their protégés to management positions.

Political expert Petro Oleschuk assessing the situation states in a Facebook audience that Dmitry Padakin does not make the impression of a "Noah's face" because he was already acting as a State Hydrography and in relation to him the Unified Register of Pre-trial Investigations has repeatedly submitted information on various corruption offenses.

The expert also points out that the central authorities of Ukraine and in particular the Ministry of Infrastructure have recently been caught up in corruption news.

There is a blatant and unconcealed violation of the procedures for appointing executives, there are no qualification checks of the candidate and no open competition is announced.

Attention should be paid to the personnel policy pursued by the Ministry of Infrastructure of the National Security and Defence Council and the Security Service of Ukraine, as it is an institution that provides national interests in the field of hydrography and navigation.  It is obvious that the human resources situation in the Ministry of Infrastructure undermines the confidence of the Ukrainian society in the Cabinet of Ministers and its anti-corruption policy, which shames it in the eyes of the international community.


Commission approves €500,000 Portuguese scheme to further support the passenger transport sector in Azores in the context of the coronavirus outbreak



The European Commission has approved a €500,000 Portuguese scheme to further support the passenger transport sector in the Region of the Azores in the context of the coronavirus outbreak. The measure was approved under the State Aid Temporary Framework. It follows another Portuguese scheme to support the passenger transport sector in Azores that the Commission approved on 4 June 2021 (SA.63010). Under the new scheme, the aid will take the form of direct grants. The measure will be open to collective passenger transport companies of all sizes active in the Azores. The purpose of the measure is to mitigate the sudden liquidity shortages that these companies are facing and to address losses incurred over 2021 due to the coronavirus outbreak and the restrictive measures that the government had to implement to limit the spread of the virus.

The Commission found that the Portuguese scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid (i) will not exceed €1.8 million per company; and (ii) will be granted no later than 31 December 2021. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions of the Temporary Framework. On this basis, the Commission approved the measure under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.64599 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.


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Organisation for Economic Co-operation and Development (OECD)

EU collaborates with other OECD countries to propose ban on export credits for coal-fired power projects



Organization for Economic Co-operation and Development (OECD) countries hold an extraordinary meeting today (15 September) and Thursday (16 September) to discuss a possible ban on export credits for international coal-fired power generation projects without measures compensation. Discussions will focus on a proposal presented by the EU and other countries (Canada, Republic of Korea, Norway, Switzerland, UK and US) earlier this month. The proposal supports the greening of the global economy and is an important step in aligning the activities of export credit agencies with the goals of the Paris Agreement.

Export credits are an important part of promoting international trade. As a participant in the OECD Arrangement on Officially Supported Export Credits, the EU plays a major role in efforts to ensure a level playing field at international level and to ensure the coherence of the common objective of combating climate change. The EU has pledged to end aid for export credits for coal without offsetting measures, and at the same time commits at the international level to a just transition.

In January 2021, the Council of the European Union called for the global phasing out of environmentally damaging fossil fuel subsidies on a clear timetable and for a resolute and just global transformation. towards climate neutrality, including the gradual phase-out of coal without compensatory measures in energy production and, as a first step, the immediate end of all funding for new coal infrastructure in third countries. In its February 2021 Trade Policy Review, the European Commission pledged to propose an immediate end to export credit support for the coal-fired electricity sector.


In June this year, G7 members also recognized that continued global investment in non-reduction coal-fired electricity generation was inconsistent with the goal of limiting global warming to 1.5 °C and pledged to end new direct government support for global coal-fired power generation internationally by the end of 2021, including through government funding.

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Week ahead: The state we’re in



The big set piece of this week will be European Commission President von der Leyen’s ‘State of the EU’ (SOTEU) address to the European Parliament in Strasbourg. It’s a conceit borrowed from the US, when the President of the United States addresses Congress at the start of each year laying out his (and it has always been a he to date) plans for the year ahead. 

I am always amazed by American self-confidence and almost indestructible belief that America is the greatest nation on earth. While thinking you’re just great must be an enjoyable state of mind, the parlous state of the US on so many levels at the moment makes me think that the excessively critical eye Europeans cast on their lot may be a healthier perspective. Still, sometimes it would be nice if we could acknowledge the many pros of the EU and be a bit more ‘European and proud’.

It’s hard to gauge how much interest SOTEU exerts outside those most engaged in the EU’s activities. As a rule Europeans, other than a small group of the most devout, don’t go around bumming about how just bloomin’ great the EU is, or generally being enthused about its direction. While we might have mused on the counterfactual, the UK has provided every EU citizen with a very stark look of “what if?” 


Looking at where the world, the EU looks like it is in a healthier state than most - this also has a literal meaning this year, we are probably the most vaccinated continent on earth, there is an ambitious plan to turbo charge our economy out of its pandemic slump and the continent has stuck its chin out and decided to do nothing short of lead the world on tackling climate change. I personally feel a great surge of hope from the fact that we appear to have collectively decided enough is enough with those within the EU who want to backslide on democratic values and the rule of law. 

Several proposals will be coming from the Commission this week: Vestager will be presenting the plan for ‘Europe’s Digital Decade’; Borrell will lay out the EU’s plans for links with the Indo-Pacific region; Jourova will outline the EU’s plan on protecting journalists; and Schinas will present the EU’s package on health emergency response and preparedness. 

It is, of course, a plenary session of the Parliament. Other than SOTEU, the humanitarian situation in Afghanistan and the EU’s relations with the Taliban government will be debated; media freedom and the rule of law in Poland, the European Health Union, the EU Blue Card for highly skilled migrants and LGBTIQ rights are all up for discussion.


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