On November 30, Ukrzaliznytsia launched a train service between Kyiv and Boryspil International Airport. The Kyiv Boryspil Express train seemed to be a very convenient means of transportation for Kyiv residents and visitors, but in reality it did not meet expectations. Travel delays, breakdowns, and detected embezzlement of budget funds - VoiceUA investigated what is wrong with the Boryspil Express.
We have been stealing since 2011
So, eight years ago, the Kyiv authorities announced the idea of creating a new transportation interchange called the Air Express. It was then that Ukraine agreed with China to raise $372 million for the construction of a railroad between Boryspil Airport and Kyiv under state guarantees. However, big problems began at this initial stage: the terms of the project were not agreed upon, and the Export-Import Bank of China did not allocate the money.
In July 2012, the State Investment Agency announced that the construction of the Air Express would begin in four months, in October 2012, and would be completed by the end of 2014. No money was allocated for the project.
In 2013, things seemed to be moving forward. The Export-Import Bank of China allocated the first tranche of $52 million to Ukraine, which was to be used for design, land acquisition, and preparatory work. But experts predicted back then that the project would not pay off - according to analysts, no more than 30% passengers of the total passenger flow would get to Boryspil with the help of the Air Express.
In 2014, the project faced its first difficulties and scandals. At the beginning of the year, the head of the State Investment Project was replaced by Serhiy Yevtushenko, who said that the Air Express project was too expensive and needed to be reduced in price by at least 20%. In addition, then-Minister of Infrastructure Maksym Burbak said in an interview with Focus magazine that funds for the project had disappeared.
"The Chinese side allocated a loan back in 2012. Ukraine is gradually repaying it, but is not building anything. Meanwhile, someone has already used $50 million of the loan somewhere. "The Air Express was overseen by Vladyslav Kaskiv's State Investment Project. This agency is currently undergoing reorganization, during which the expediency of using the funds will be checked. Including the funds raised for the construction of the Air Express," the minister said at the time.
In 2015, the project was threatened with closure. The Revolution of Dignity and the ATO led to a drop in passenger traffic at Boryspil Airport, and the then head of the Ministry of Infrastructure, Andriy Pyvovarsky, announced that the Air Express was not needed and began negotiations with China to redirect the reserved money to other projects. In October of the same year, the State Financial Service published the results of an audit that showed that tens of millions of hryvnias of Chinese credit had actually burned or disappeared into the accounts of dubious financial institutions.
In 2016, the National Anti-Corruption Bureau took up the case of embezzlement of funds allocated for the construction of the Air Express, which involved the theft of more than UAH 81 million. In 2017, NABU detectives completed the investigation, and the media reported that the Kyiv Prosecutor's Office had succeeded in recovering over UAH 94 million in loan funds, including interest, from a commercial entity in favor of the Ministry of Infrastructure and the Air Express State Enterprise.
How the "express" was hardened
At the end of 2017, the Ministry of Infrastructure began attempts to reformat the format of the scandalous project. In an interview with the media, Deputy Minister of Infrastructure Viktor Dovgan said that the Air Express could be closed, as the loan servicing for the project costs Ukraine $2 million per month.
"This is a communication project (Air Express - Ed.) for which a Chinese loan of $372 million was allocated. $50 million was spent. As a result, there is neither an express nor dollars," Dovgan said at the time.
At that time, experts did not understand why an express train to Boryspil was needed.
"It takes literally 8-10 minutes by car to get from Boryspil Square to the airport. Everyone drives like that. So is it worth spending money on an expensive project that costs tens of millions of dollars that will never pay off," Oleksandr Serhienko, director of the Urban Institute, told GolosUA.
The same opinion was shared by former Deputy Minister of Infrastructure Oleksandr Kava.
"It will not be in demand among passengers, and it is absolutely incorrect to implement it at the expense of Ukrzaliznytsia in the current situation, when the railroad does not have enough money for locomotives and cars. This is a project aimed at PR for individuals rather than positive for citizens and solving any problems, since there is currently no problem with the connection to Boryspil Airport," the expert stated.
However, the project was not closed, but reformatted. In March 2018, the acting head of Ukrzaliznytsia, Yevhen Kravtsov, wrote on his Facebook page that the organization he controlled had received permission to develop a project for a new express train.
Experts supported the decision of the Ministry of Infrastructure.
"From the very beginning, the Air Express project was not a project, but a 'project'. We know who was involved in it and how it ended. In addition, the Chinese gave money on their own terms. That is, they give a loan and "eat" it themselves. They hire their own workers, engineers, and designers-that is, they give this money to themselves, but we will have to pay for it. Therefore, it is absolutely the right decision to close this project and reconsider it from the very beginning," Serhiyenko said.
So, in 2018, work on the Kyiv Boryspil Express, as the project was called, was in full swing. While early projects envisaged up to 2 years to build a railway line, the Boryspil Express was built in six months and opened with a bang in November. Obviously, such a rush and total economy led to terrible embarrassments - on the second day, the Boryspil Express broke down in the field, and airplane passengers were forced to run through snowdrifts with their suitcases. Then such collapses happened at least 4 times.
Experts remind us that our government buys used vehicles that are not designed for our cold weather.
"Ukrzaliznytsia has been going crazy lately. To begin with, they messed up with the Boryspil Express. The cars there are old, venerable, and the spare parts are old... It turned out that they saved a lot of money: 50 million was spent on some kind of insurance... but it's like with Hyundai - these trains are not designed for our road network. By and large, these are suburban trains, not interregional trains," Vyacheslav Konovalov, a transport expert and representative of the EuroPatrol public campaign, told GolosUA.
Where is the money, Ukrzaliznytsia?
But the breakdown of the express train in an open field was just the beginning. The real scandal began at the end of January, when the media learned that there was a criminal investigation into the misappropriation and embezzlement of a large sum of public funds by officials and businessmen during the construction of the Kyiv Boryspil International Airport Express.
According to the court, the embezzlement case has been under investigation since December 4, 2018. During the pre-trial investigation of the criminal proceedings, it was established that during 2018, Rilaid LLC repeatedly won public procurement of the Southwestern Railway branch of PJSC Ukrzaliznytsia for the construction project "Organization of railway passenger service Kyiv - Boryspil International Airport" for a total amount of UAH 20,444,582.
On January 17, the Pechersk District Court of Kyiv granted the police access to a number of important documents to establish the circumstances of the criminal offense and the persons involved in the crime. The investigation is currently ongoing.
Experts agree that the amount of theft is much higher, and the perpetrators will go unpunished.
"The police are investigating the embezzlement of 20 million during the construction of the Boryspil Express. I think the figure will be much higher. It costs several million dollars to build a kilometer of road. During the construction, prices were clearly inflated. Initially, they said that $300 million for such a project was a super overkill. The new team took a sober approach to the project, but still, the price of building the Boryspil Express was inadequately high. There will be a long trial, but most likely, the debt will be written off, and all those responsible will leave office unpunished," Konovalov said.
Viktor Medvid, head of William Invest, a consulting company, recalled that the contractor chosen by Southwestern Railway received much more than UAH 20 million.
"The contractor chosen to perform the work has no clients other than Southwestern Railways. In fact, this company was created for the purpose of performing this operation. It was registered in 2016, in 2017, as I understand it, it was bought, the founders were changed, and in 2018, the amount of 35.8 million hryvnias was transferred to it. Naturally, the company had no experience in doing business before that, it had just received a license and was immediately entrusted with such important tenders. There is an assumption that this scheme was developed by people from the railroad and it is possible that they created this company to implement criminal schemes," the expert said.
Analysts also emphasize that the case may be simply hushed up, as it was after the 2014 scandal with the embezzlement of $50 million from the Chinese tranche, as the money was never returned to the state treasury.
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