Russia’s ongoing war against Ukraine is becoming a tale of wreck and ruin, with heavy weapons and a scorched-earth policy of retreating Kremlin-backed militants.
Prime Minister Arseniy Yatseniuk has set an initial price tag for reconstruction at Hr 8.1 billion, or $700 million, but with more destruction almost daily in the war, the damages will grow higher and won’t be able to be counted until the fighting stops.
When the Russian-backed insurgents fled Sloviansk on July 5, they left a town bereft of running water, electricity and telecommunications, in addition to dozens of damaged residential, government and commercial buildings. Heavy fighting in nearby Mykolayivka left one of the region’s five thermo-electric power plants damaged. Rail lines have been wrecked, roads torn up and bridges blown up to hinder the Ukrainian army’s pursuit.
And with insurgents still occupying a dozen cities and many more towns in densely populated and heavily industrialized areas in Donetsk and Luhansk oblasts, their forces are dug in for a long fight.
The state railway giant Ukrzaliznytsia reports that in the past three weeks alone, 22 explosions have taken place along rail lines in Donetsk and Luhansk oblasts, including seven destroyed bridges, causing Hr 230 million worth of damage.
The national road agency, Ukravtodor, is claiming Hr 0.5 billion worth of damage to dozens of kilometers of roads, bridges and a viaduct. Some of the damage was caused by heavy weapons used by the Ukrainian army.
On July 16, Infrastructure Minister Maksym Burbak announced a preliminary damage figure of Hr 1 billion in ruined roads, railways, bridges, and airports.
The longest of the destroyed bridges – 303 linear meters across the Donets River near Yampil – will cost an estimated Hr 75 million to replace, according to Ukravtodor.
The preliminary sums needed just to repair the housing stock of newly liberated Sloviansk, which had a pre-war population of 140,000, is Hr 1.5 billion, according to Mykola Chechetkin, deputy director of the Emergency Situations Ministry. And then there are expenses related to utilities, schools and government offices. Thirty-four apartment blocks were damaged, 11 seriously, Chechetkin reported.
The most densely populated territory has yet to be liberated. About four million of Donetsk and Luhansk oblasts’ 6.6 million residents are still living in the war zone.
The Ukrainian government sent in repair crews to restore essential services after the liberation of Sloviansk and other cities. So far, the government has spent Hr 0.5 billion to restore 60 percent of the local electricity grid, reported Energy and Coal Industry Minister Electricity Department deputy director Borys Sorkin on July 16.
Privately owned infrastructure, such as the relay towers of major telecom providers and some energy assets, are on their own. MTS-Ukraine, for example, estimates the cost of repairing damage to its network caused by the fighting at Hr 2.5 million.
One of the most complicated rebuilding tasks concerns the energy sector. The Donbas region has more energy resources than anywhere else in the country, including more than 100 coal mines that produce 70 percent of the nation’s coal, and five thermal energy stations, two of which remain in enemy hands. Power lines, transformers, transfer stations, boilers, a whole range of fixed assets need to be repaired or replaced.
Volodymyr Boyenko, legal support director of the electricity and heat generator Donbasenergo, says that the repair program for the Slovyansk thermal energy system will cost Hr 400 million.
Ukraine’s largest energy holding DTEK, owned by billionaire Rinat Akhmetov, announced on July 10 that the cost of restoring the company’s electrical equipment and networks is Hr 35 million.
Donbasenergo reports that the coal mines in the war zone are only working at around half of capacity, making losses tremendous for the nation as a whole.
Where to find the money is a big question. Deputy Prime Minister Vladimir Groisman told international donors in Brussels on July 8 that the most recent International Monetary Fund bailout loan of $18 billion would not be enough. He also said that Ukraine would ask donors for helping restore the infrastructure in Donetsk and Luhansk and would need something like a Marshall Plan, a reference to the reconstruction plan by Western allies to rebuild Germany after World War II.
President Petro Poroshenko’s representative in the Donbas, Iryna Herashchenko, reported on July 9 that the European Union is ready to provide €1.5 billion to rebuild damaged infrastructure.
The U.S. might get involved as well. On July 10, U.S. Vice President Joe Biden spoke with Poroshenko about America providing aid for reconstruction, according to the White House.
While the government will assume responsibility for rebuilding infrastructure, the question remains about who will pay for damaged homes.
According to lawyer Andriy Kot of Antika Law Firm, insurance companies are out because almost no Ukrainians insure their property. The government also has “no clear obligations” to compensate, Kot said. He expects the creation of a special fund to finance rebuilding of residential areas, perhaps with money raised by donations.
Kyiv Post business journalist Evan Ostryzniuk can be reached at [email protected].
