You're reading: Combative Kolesnikov says Tymoshenko left Euro 2012 mess behind

An exclusive interview with Borys Kolesnikov, the hard-charging, combative face of President Viktor Yanukovych's administration.

Borys Kolesnikov is the hard-charging, combative face of President Viktor Yanukovych’s administration. He also has a big job to do – and quickly.

Kolesnikov is deputy prime minister in charge of overhauling the nation’s outdated infrastructure ahead of next year’s Euro 2012 soccer championship, which Ukraine co-hosts with Poland.

A multi-millionaire with business interests in confectionary and commercial real estate, he is a political heavyweight in the pro-presidential Party of Regions.

The 49-year old is from Donestsk Oblast, Yanukovych’s power base. Among Kolesnikov’s close friends and partners is billionaire Rinat Akhmetov, Ukraine’s richest man. He also serves as vice president of Akhmetov’s increasingly successful Shakhtar Donetsk soccer club.

Kolesnikov and Akhmetov supported Yanukovych’s candidacy in the fraudulent 2004 presidential elections, overturned by the Orange Revolution that vaulted ex-President Viktor Yushchenko to power.

All the roads on which we’re working on now had to, sooner or later, be worked on. Roads always need to be maintained and the same goes for roads in Europe. But roads in Europe are built with better quality and nobody even thinks of stealing building materials there.

Kolesnikov, then chairman of the Donetsk Oblast legislature, spent four months in pre-trial detention on suspicion of abuse of office, extortion and making a death threat. He was released in August 2005, after law enforcement cited a lack of evidence against him.

Kolesnikov suffered a heart attack late in January and recently underwent surgery. The Kyiv Post spoke with him on March 23, just a week after he was released from a hospital.

He bluntly defended the much-criticized preparations for Euro 2012, arguing that he is making right what the previous government of ex-Prime Minister Yulia Tymoshenko got wrong.

The defense extended to the government’s use of non-competitive bids for lucrative orders for much of the $20 billion project, $9 billion of which is taxpayer-funded, needed to prepare for the tournament. Critics have derided the practice as tantamount to theft. Here are excerpts:


Kyiv Post: Many people are criticizing the way the preparations for Euro 2012 have been held.


Borys Kolesnikov:
There’s an appropriate Russian proverb: “The greedy person pays twice.” We must take all these Soviet normative acts and toss them onto the street. We need to usher in new technologies.

Currently our president and the appropriate ministry are working on a new concept of controlling the governance of the construction of roads in the nation. One outcome of this is that (state-owned and operated) Ukravtodor won’t be in charge of designing roadwork in the country.

We’re going to work with foreign road experts, experts who can’t be bought, to whom one can’t give bribes and who can deliver on controlling the quality of roads in Ukraine.

All the roads on which we’re working on now had to, sooner or later, be worked on. Roads always need to be maintained and the same goes for roads in Europe.

But roads in Europe are built with better quality and nobody even thinks of stealing building materials there. If you’ve seen how roads are built in Spain or Germany, they use special materials to build the flattest of roads.

I could provide if not 1,000, then 100 more detailed examples of how much better roads get built in Europe.

Look, regarding the stadiums. In Lviv, this is the most modern project and it’s a brand new stadium. It will serve two Lviv soccer clubs for a very long time.

In addition, we built such an infrastructure network next to the stadium that you could build another city there. And should, God willing, we earn the right to host the 2022 Winter Olympics, then the opening and closing ceremonies will take place in the Lviv stadium.

Now about the Olympic Stadium in Kyiv. I’ve already said that this was a tragic mistake to reconstruct the old stadium at this (central) location.

However…besides the second tier concrete placed in 1968…nothing is left of the old stadium. Everything else including the circuit system and other infrastructure around the stadium is all brand new.

We are putting in the best Western technologies, from optical windows, the sewage, as well as a new electrical system from Siemens, all of which will have enough power that the city could use it to service new business or residential buildings in the area.


KP: But some critics say you’re building stuff that has nothing in common with soccer under the Euro 2012 umbrella…

BK: For example…?

KP: The helipad project in Kaniv…

BK: This project isn’t really connected to Euro 2012.

KP: But stuff is being built there using single bidders.

BK: Listen…just listen. Until this project, the previous government held bids, and also didn’t hold bids, and did stuff illegally because it did not have the legal foundation. What was the outcome of these bids?

Where is the tender mafia that was headed by Anton Yatsenko? [Editor’s note: A former member of ex-prime minister Yulia Tymoshenko’s faction in parliament, Yatsenko joined the pro-presidential Regions faction in March].

Holding tenders in Ukraine doesn’t ensure that everything will be fair.

KP: It at least increases chances of fairness.

BK: Zero. No guarantees. Things even get worse because of tenders [in Ukraine]. Do you know what a single-bidding procedure is? Do you understand what this means at all? It’s a five-day tender.

That is, you send an electronic proposal and then you can bid. An ordinary bidding process takes 45 days. Then you’ve court appeals by those who lost, which is an endless procedure.

To hold bids successfully you need robust domestic competition among bidders.

That is, you need at least 10-15 construction companies submitting bids. The same goes for road builders in a competitive atmosphere. You need influential and strong professional associations like they have in the U.S. and which are more powerful than the government.

Only then will you have a tender system. Theoretically, tenders get you a competitive price. Nevertheless, with or without a tender, the cost of construction also depends on the government’s expert assessment of projects.

Let me give you another example: project design for the Donbas Arena [built by Akhmetov for his Shakhtar Donetsk soccer team]. Tenders were used. The initial price tag was $250 million. Everything was finalized and then signed. The final price was $420 million.

Now regarding the Kaniv tourist infrastructure project, where the helicopter pad is being built. This is where Taras Shevchenko’s monument is. A helipad isn’t the only thing there. It even isn’t a helipad. This is actually an airport with 10 parking spots which will take in commercial flights from Boryspil International Airport.

But this is the smallest project there. We’ll have a brand new boat docking and bus station housed in one building so that it’ll be convenient for passengers. By next year, tourists will be able to visit Kaniv regularly on passenger boats. We also will allow all school children to have free excursions to Kaniv at least on these boats.

KP: Will the fast tram connecting Kyiv and Boryspil airport be built before Euro 2012?

BK: No one promised to build it before that and it wasn’t a UEFA [Union of European Football Associations] requirement. But it’s physically impossible to build this connection before Euro 2012. Second, there will be a fast train linking Kyiv’s train station with terminal D in Boryspil.

Poland, unlike Ukraine, first designed projects, assessed their value back in 2008 and started the process right. But Ukraine first started to build then started project design. I looked at the figures the previous government provided us from June 2009. They had the Olympic Stadium costing Hr 3 billion to build. I asked for documentation backing all the previous government’s figures. There wasn’t any.


KP: So how do you plan to counter what many call the “taxi racket” in Boryspil that charge sky high prices for a trip to Kyiv? They are the first people tourists encounter after going through immigration and customs at the airport.

BK: First off, the police don’t do anything to protect passengers from these private taxis. But action needs to be taken. We’ll have a new director at Boryspil airport and also new leadership at the internal ministry there. This is the subjective part.

The objective part relates to what you see in many large cities around the world. Right now, you cannot drive into the arrivals area of Terminal D if you don’t have a special computer chip from the taxi service that won a tender in Boryspil. So we’re working on this problem on the organizational and technical side.

We’ll have surveillance cameras installed which will monitor those who rudely approach passengers arriving.

KP: Will there be special buses operating in Boryspil to transport passengers to Kyiv?

BK: Absolutely, there’ll be specific buses, up to 50-70 taking passengers to Kyiv’s city center.

KP: There is a huge problem regarding access to information (about Euro 2012)…

BK: Yes there is a big problem. Not only with Euro 2012. But I don’t foresee any problems. Everyone authorized to work on Euro 2012 is accessible to the public.

But there are some (journalists) out there who are dishonest, who manipulate facts and switch things around and say that prices in Poland aren’t rising but here they are. The National Stadium in Warsaw will seat 20,000 fewer people than the Olympic Stadium yet it costs much more to build at $635 million.

Poland, unlike Ukraine, first designed projects, assessed their value back in 2008 and started the process right. But Ukraine first started to build then started project design. I looked at the figures the previous government provided us from June 2009.

They had the Olympic Stadium costing Hr 3 billion to build. I asked for documentation backing all the previous government’s figures. There wasn’t any.

KP: I understand Poland first did assessments, and with roads. They shortened the distances of road projects in order to involve more bidders. Bids came from China, Korea, Western Europe as well as from Polish firms. And within two years they managed to cut the price of one kilometer of road by 30 percent.

BK: [Handing over a bar graph made by Ukravtodor comparing the average price of building major roads between different countries showing that roadwork in Poland is more expensive.]

First, Ukraine isn’t building that many roads specifically for Euro 2012. Secondly, they started back in 2007 and 2008 when you could’ve invited bids from around the world and we could’ve done the same which should end with us winning the right to host the 2022 Winter Olympics.

Tenders take 45 days then you have the possibility of court challenges that will last 60 additional days. Right now we’re not doing normal work. We’re a fire brigade putting out fires.

When speaking of Lviv (Ukraine was on the verge of losing it as host city because of inaction of stadium construction), it would’ve been an embarrassment in front of the whole world.


KP: Do you call yourself a crisis manager?

BK: No, I don’t refer to myself that way. I’d like to say that I’m growing tired of all this. There is no other way out though. We have to finish the preparations and that’s all. For any large event, one must start preparing five years ahead of time.

Plus all the legislative hurdles, we need to simplify doing business in Ukraine to compete globally.

Tenders won’t bring in bids. Everyone will be bought. The price tag for every tender which is officially held cost millions of dollars in bribes and kickbacks.

Therefore, without competition no salary is high enough to hold a quality tender procedure. Plus the tax system allows for converting things into money which only fuels corruption, not prevents it.

KP: I have to ask this: Are you a shareholder of any offshore companies that have received jobs for Euro 2012?

BK:
I not only do not have shares in offshore companies that receive Euro 2012 orders but also Ukrainian ones. I’m not interested in this business field. I’m more interested in the food processing industry. I believe that any foreign investor working in the food industry in Ukraine will achieve success.

Kyiv Post staff writer Mark Rachkevych can be reached at [email protected]