Under the umbrella of Ukrekoresursy, a consortium of waste recycling companies is being prepared for creation, with subsequent corporatization and privatization within five years. At current prices, the association's revenue could reach UAH 1 billion.
Ara Safaryan
The inconspicuous state-owned enterprise "Ukrekoresursy," which Ara Safaryan took over as its head in April of this year, continues to successfully churn out millions out of thin air. The company receives approximately 100 million hryvnias annually for its illusory packaging recycling services. The curator of the established waste recycling system is rumored to be a former minister from Prime Minister Arseniy Yatsenyuk's inner circle. It was he who allegedly promoted Ara Safaryan to the top management of "Ukrekoresursy." Before his rise to prominence, he managed one of the projects at this state-owned company, funded by "green" investments from Japan, provided through the Kyoto Protocol emissions trading program. Before joining the state-owned enterprise, Ara Karenovich spent several years heading the small private company "Eurofoods," which specialized in the packaging of bulk products.
The unofficial curator of Ukrekoresursy also established a relationship with Oleksandr Lymar, who heads the state-owned enterprise's supervisory board and the industry association for packaging recycling.
The former minister successfully lobbied the government for the state-owned company's interests for quite some time. The attempt to uncover whose interests the state-owned enterprise was annually siphoning hundreds of millions from private companies has already cost several Cabinet members their jobs. For example, the government turned a blind eye to the "telegram" sent to the Prosecutor General's Office by Mikhail Brodsky, head of the State Committee on Entrepreneurship, requesting an investigation into the company's activities. However, the entrepreneurs' advocate quickly regretted his curiosity. In any case, Brodsky himself attributes his dismissal to his excessive interest in the state-owned enterprise's activities—after appealing to the Prosecutor General's Office, he was dismissed under the pretext of downsizing the State Committee on Entrepreneurship.
Former Economy Minister Pavlo Sheremeta also attempted to eliminate the existing system of fictitious packaging recycling. However, this only resulted in further headaches for him and indirectly led to his resignation. According to Sheremeta, the unsinkability of the "garbage" state company was due to the fact that the funds it collected were used to covertly finance the election campaigns of one political party. Evil tongues claim that the former minister's accusations were directed at Prime Minister Arseniy Yatsenyuk's People's Front.
According to former Economy Minister Pavel Sheremeta, the unsinkability of the “garbage” state company is connected
with the fact that the funds it collected were used for shadow financing of the election programs of one of the political parties
Even after the elections, the position of Ukrekoresursy's management (as well as the company itself) appears quite secure. The company reports directly to the Cabinet of Ministers, still headed by Arseniy Yatsenyuk. Another of its "guardians," a former minister, recently secured a position on the parliamentary committee on European integration. This will allow him to continue overseeing the company. The coalition agreement stipulates that Ukraine intends to adhere specifically to EU directives in the areas of environmental protection and waste recycling. And while the relevant parliamentary committee is working on adapting them to Ukrainian realities, the virtual waste recyclers can rest assured.
In the near future, the management of Ukrekoresursy plans to truly expand its operations. During a recent press conference, Ara Safaryan and Oleksandr Lymar announced their intention to create a consortium of as many waste recycling companies in the country as possible under the auspices of their state-owned enterprise, with subsequent corporatization and privatization within five years. At current prices, the revenue of such a consortium is expected to reach UAH 1 billion.
Even now, the position of Ukrekoresursy is enviable. According to joint order No. 789/414/709 of the Ministry of Economy, the Ministry of Ecology, and the State Customs Service of Ukraine dated July 30, 2009, all importers of packaged goods are required to pay this state-owned enterprise a special fee—a mandatory payment for the future recycling of imported containers. This fee was introduced under the pretext of introducing European practices in Ukraine. However, it is disconcerting that the state-owned enterprise Ukrekoresursy, which receives this money, is not actually involved in packaging recycling. Moreover, our fee rates are much higher than in some European countries. For example, the fee for glass container recycling (150 UAH per ton) in Ukraine is almost three times higher than in Poland.
Although importers have been paying bribes to the state enterprise for almost five years, the company has yet to launch a single packaging recycling line. There is also no system for collecting used containers. Feeble attempts to establish this activity were made by the company's previous, "Donetsk" management (previously, the state enterprise "Ukrekoresursy" was headed by Dmitry Radionov, a protégé of the son of former Prosecutor General Pshonka). But nothing has progressed beyond purchasing equipment, which cost almost 140 million hryvnias. Even earlier, the company leased several dozen garbage trucks worth approximately 40 million hryvnias. As a result, both the equipment and machinery remain idle.
Importers are forced to create their own recycling and processing systems. For example, they sort and send glass containers and cardboard for recycling. However, this still doesn't exempt them from paying a border fee to Ukrekoresursy. This situation reaches the point of absurdity: according to the UkrPEK association, no more than 4% of all used packaging is recycled in the country. Meanwhile, domestic companies that manufacture cardboard packaging from waste are experiencing a shortage of raw materials and are sourcing them from abroad. For example, with a production capacity of 1,2 million tons, only 0,8 tons is covered by waste paper collected in Ukraine. According to the Ukrainian Recycling Association, the rest is purchased from Russia and Belarus. The fee for imported raw materials last year amounted to approximately $50 million.
Ukrekoresursy earns 100 million hryvnias annually
The state-owned enterprise "Ukrekoresursy," headed by Ara Safaryan, receives approximately 100 million hryvnias annually for its illusory packaging recycling services. Inspectors from the State Environmental Inspectorate collect funds from importers at the border for the state-owned enterprise. According to their data, importers transferred 120 million hryvnias for packaging recycling in 2012, 99 million hryvnias in 2013, and approximately 42 million hryvnias in the first six months of 2014. The decline in revenue this year is attributed to reduced fees due to the annexation of Crimea and the fighting in Donbas. However, the company's revenue could increase tenfold over the next five years. If a consortium of waste recycling companies is created and subsequently privatized, the association's revenue could reach 1 billion hryvnias.
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