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8 February, 2011  ▪  Yurii Nikolov

Agriculture minister’s markets

Over a billion hryvnias in government investments to be poured into wholesale agricultural markets will go to companies close to Agriculture Minister Mykola Prysiazhniuk

The plan to set up wholesale agricultural markets across Ukraine has never been in the spotlight. Well, it should. The government plans to attract nearly four billion hryvnias to this project of which 1.2 billion will come from the government budget. The fist installment of this tasty bit of the state budget became available in late 2010 and went to Lviv and Kyiv.

On 7 October 2010, the Ministry of Agriculture issued order No. 625 granting the status of a wholesale market to the Stolychny agricultural market in Kyiv. At the same time, the ministry denied this status to two companies which have been trying to obtain it since the time Yulia Tymoshenko was the premier.  The program in question was launched around the same time, too.

On 12 October, the government allotted 50 mn from the Stabilization Fund which were split in greatly unequal shares between the Stolychny market (4 mn) and the Shuvar market in Lviv (46 mn).

The Ukrainian Week has learned what this money had to be used for. In Lviv, the existing market had to be expanded; land plots had to be purchased, approaches made and communications installed. Additionally, 50 percent of the cost of required equipment had to be compensated. The owner of Shuvar is a noted local businessman, Roman Fedyshyn.

In Kyiv, the funding had to be channeled into the preparation of budget documents for the construction of a market.

On 22 December, Agriculture Minister Mykola Prysiazhniuk solemnly opened the construction project located by the bypass road near Kyiv. The first section of market is scheduled to open in the summer of 2011.

Theoretically, new wholesale agricultural markets are a good thing in that they are a platform where any producer can sell his products without running up against the usual problems.

However, the current practices in the Ministry of the Agriculture arouse suspicions. The Ukrainian Week has decided to check who is going to control the new markets. We have looked into who the founders of the Stolychny market are.

There are two of them: Vidrada-Bud Ltd., a construction company, and Agricultural Marketing Center Ltd., with the authorized capital of 33,200 hryvnias and 65,000 hryvnias, respectively.

The latter company is especially interesting. It was founded by the Shuvar center mentioned above and Viktor Ponomarenko who, it turns out, is linked to Minister Prysiazhniuk.

Mr. Ponomarenko is, among other things, a co-founder of New Investment Technology Ltd. This company set up, together with Inga Vershynina and Austrian-based Wellmind Invest GmbH, the Southern Grain Company of Ukraine.

Ms. Vershynina came to the fore several years ago when she became an MP with the BYuT faction, later switching to the coalition of the Party of Regions, communists and socialists which put her in the office of the CEO of the state-owned Khlib Ukrainy (Bread of Ukraine) company.

The Austrian company is even more interesting. Wellmind Invest GmbH has been reported in the press as the co-founder of Monolitinvest — together with Olena Stavytska and Mr. Prysiazhniuk himself.

Thus, Mr. Ponomarenko, a market player, is one Austrian company away from Mr. Prysiazhniuk. This company often comes up as a founder of companies related to the Yenakievo-Donetsk business circles from which Mr. Prysiazhniuk emerged.

Of course, it cannot be said that the minister is a direct beneficiary of his own decision to get Stolychny Ltd. involved and let it spend a billion hryvnias of government money. However, this situation points to an intriguing trend. The biggest contracts in the agricultural sector, such as for sugar supply (worth nearly a billion hryvnias) and the scandalous story with grain exports, have been granted to companies linked, in one way or another, to Mr. Prysiazhniuk’s business partners. What a trend…

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