Table of Contents
See previous part: How Russia prepared to seize Ukraine’s nuclear energy. Part 3: Exploiting War for Corporate Control
The Nuclear Repository: A Needle with a Thorny End
The nuclear industry is rich and diverse — there’s plenty of room for “maneuvers,” to say the least. Just take a look: tenders, billion-dollar budgets, a large number of subordinate companies and subcontractors, and a couple of stolen millions here and there — it’s like finding a needle in a haystack.
However, it seems that the Centralized Spent Fuel Storage Facility has become that needle, with a thorny end. After all, such all-encompassing greed concentrated in one place, significant for Ukraine, cannot go unnoticed.
The general contractor for the construction of the Centralized Spent Fuel Storage Facility until December 2020 was the company Ukrbudmontazh. Within two years of starting construction, the cost of the facility increased by 50% to nearly 1.4 billion UAH (38 million USD). However, even these funds were not enough to complete the construction.
Throughout 2020, the State Enterprise Energoatom attempted but failed to conduct tenders for the completion of the Centralized Spent Fuel Storage Facility construction. The tenders were canceled due to the “excessive appetites” of Energoatom officials. The requested delay compensation from Energoatom amounted to approximately 97.5 million UAH ( 2,6 million USD or 15% of the total tender amount of 655.81 million UAH — 17,8 million USD). However, no agreement could be reached with Ukrbudmontazh LLC, despite two planned tender disruptions and a complaint filed with the National Anti-Corruption Bureau (NABU). Ukrbudmontazh refused to pay.
The Mystery Contractor Without Credentials
And here, like a jack-in-the-box, an unknown company called BC KBR emerged. Even before the start of work, bypassing Prozorro and without announcing a tender procurement, Energoatom entered into a contract with them for 485 million UAH (13,2 million USD). Looking ahead, an author notes that during the period from December 2020 to April 2021, contracts were concluded with BC KBR LLC for an amount of 420 million UAH (11,4 million USD) and 1.2 billion UAH (33 million USD).
All these contracts were made in violation of the Ukrainian Law On Public Procurement, without conducting auctions (unjustifiably designated as classified documents). BC KBR LLC had no experience in similar contracts at the time of signing, nor did it possess the necessary permits (lacking a license for performing construction works of class СС3, lacking authorization for special works, access to the exclusion zone, etc.). However, it had a desire to make substantial profits in a short period, so it unjustifiably inflated the cost estimates for materials and equipment in the contract documentation by more than four times, and in some items, by more than six times!
Another know-how from the Kotin team was including in the contract work that had already been completed by previous subcontractors during the period of 2019-2020, such as the arrangement of temporary buildings and structures, construction and installation works for the reception building (main beams), installation and procurement of a telecommunications tower, procurement of the chemical water treatment system, and so on.
Prior to signing the contract, BC KBR LLC approached the State Enterprise Atomproektengineering requesting an advance payment of over 200 million UAH (5,4 million USD), and the current Minister of Energy (at that time, Vice President of Energoatom, German Galushchenko) approved this request two days before the contract signing.
Three Fake Openings: Presidential Photo-Ops for an Empty Shell
The funniest part of all this is that the Centralized Spent Fuel Storage Facility has been “officially opened for the camera” multiple times. First, in December 2020, then in May 2021, and later at the end of June 2021. In early August 2021, the President of Energoatom, Petro Kotin, assured that the facility would be completed and handed over in September.
The photos attached were taken on December 7, 2020, which was 15 days before President Volodymyr Zelenskyy’s visit to mark the commissioning of the Centralized Spent Fuel Storage Facility (the first “solemn” opening). Workers, brought there in full buses, were supposed to create the illusion that only the “finishing touches” were left to be done. They planned to cover exposed wires hanging from the ceiling, the unpaved courtyard, and rusty rails with decorations. Because appearance must go on.
But then it became clear that it wouldn’t be possible to squeeze in the president’s visit between the ongoing violations because the violations were becoming too glaring. They must have put in a lot of effort to make the head of state “forget” about the Centralized Spent Fuel Storage Facility for a while.
The phrase “stolen money” has become a meme and a symbol of complete chaos in the construction of a critically important facility for the country. “The money has gone, sold, and further along the text.”
https://www.youtube.com/watch?v=7Lm62_4wVH0
During this unfortunate meeting, representatives of private contractors and subcontractors who were involved in the utilization of state budget funds for the construction of the facility at the Chornobyl Nuclear Power Plant were present alongside Bozhko. Bozhko proposed to them to conceal corruption through fictitious cost estimates for payment under old contracts or to establish a non-public procurement with a new contractor.
Bozhko kept his word — a new tranche of 1.2 billion UAH (33 million USD) was found for BC KBR. After that, they attempted to “launch” the Centralized Spent Fuel Storage Facility again. However, the then-head of the State Nuclear Regulatory Inspectorate Hryhoriy Plachkov, refused to sign the readiness certificate for the facility’s operation due to numerous violations.
The money quickly ran out, and the Centralized Spent Fuel Storage Facility was not completed…
What went wrong again?
Let’s start with the most basic issue — the connection to the electrical grid. Currently, the Centralized Spent Fuel Storage Facility is connected through a temporary scheme (which is strictly prohibited when commissioning the facility), because the technical requirements provided by DTEK Kyivoblenergo were not fulfilled at all.
The contents of the contract signed with BC KBR LLC stated that it was for the completion of construction and installation works and did not include the supply of systems and equipment. However, the records indicate that the funds were immediately spent on the procurement of systems and equipment. Subsequently, numerous additions and increases to the contract were made, as the appetite for more grew. Works were duplicated, tripled, and the equipment that had already been purchased was repeatedly included in the list, creating a cycle.
How Billions Vanished into Inflated Contracts
Here’s how the prices for safety-related systems changed:
Physical protection system — before the contract with BC KBR LLC, equipment installation was approximately 70% complete, and around 75% had been mounted. After signing the contract with BC KBR LLC, the price for the works and equipment increased by more than 2.5 times.
Control and monitoring system — before the contract with BC KBR LLC, approximately 70% of the equipment had been supplied. After signing the contract with BC KBR LLC, the price for the works and equipment increased by more than 2 times. The installation and commissioning works are still ongoing.
Radiation control system — before the contract with BC KBR LLC, the equipment for the system had already been practically procured to about 70%, with 55% delivered. After signing the contract, the cost of the equipment increased by more than 1.8 times, and in some cases, more than 200 times (for example, a laptop, which had a market value of 60,000 UAH (1, 633 USD), was purchased for 22 million UAH — 599, 000 USD). Equipment was procured multiple times on paper, and in some cases, even three times.
Communication system — the equipment (Motorola company) that was previously approved in technical specifications and procurement documents at the work documentation stage does not fully match the equipment that was actually purchased (Chinese company MKT-Communications). The cost of the purchased equipment increased by more than 2 times.
As for the issuance of licenses for the Centralized Spent Fuel Storage Facility and the readiness certificate for the facility from the State Nuclear Regulatory Inspectorate and State Architectural and Construction Inspection of Ukraine, it was a topic that everyone was discussing.
Despite significant flaws, the Readiness Certificate for the building structures was obtained by Energoatom in August 2021, and practically the next day, the State Architectural and Construction Inspection issued the corresponding certificate, even though it would have taken 6-12 months to address the existing deficiencies. However, judging by the photos, nothing needed to be rectified. It was much easier to remove the head of State Architectural and Construction Inspection a few days before the certificate was signed.
The same fate befell the head of the State Nuclear Regulatory Inspectorate —persistent Plachkov was replaced by pocket-sized Korikov, who continues to sign any nonsense that Kotin presents to him.
With the funds spent on the construction of the Centralized Spent Fuel Storage Facility, we could have already organized an expedition to Mars, or at the very least, sent our representative to ensure oversight under Musk’s colonization plans.
But the head of Energoatom, Petro Kotin, in his traditional populist manner, now accuses Russia of everything…
And it’s true, the money for the construction was still stolen.
