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28 November, 2011  ▪  Serhii Korobchuk

The Engorges of Billions

Soaring costs and still too few hotels in Donetsk

Markian Lyubkivsky, Tournament Director in Ukraine, has decided to remind the boys from Donetsk of the obvious shortcomings in Euro 2012 preparations. “Accommodation for target groups is the biggest problem in Donetsk today,” he says. “UEFA requires more than 5,500 hotel rooms compared to the currently available 1,600.”

Donetsk’s shortage of hotels apparently stems from the reasoning that building such facilities for football fans, who will only come to town for a few weeks is too risky, even with government support. One discouraging example is the five-star Donbas Palace, one of Rinat Akhmetov’s favorite toys, where lighted windows are a rarity. In 2009, only 23% of the hotel rooms were filled.

Meanwhile, local authorities were forced to take eight hotels out of the championship program, according to Serhiy Repin, Head of Donetsk Council Special Department for Euro 2012. Work has come to a halt on the almost finished second phase of the Central hotel complex. According to official information from Donetsk Mayor, Oleksandr Lukianchenko, the owners have overestimated their resources and gone broke. But rumor has it, that the family of one-time MP Anatoliy Bohatyrenko who allegedly controls the Central, expected – and for good reason - to make a pretty penny out of the enormous tranches from the public budget, which were supposedly promised to it, but ended up with nothing.  

Management Assets Company (MACO) owned by Oleksandr Yanukovych, the President’s son, recently presented a construction project on the basis of the Druzhba hotel in Donetsk. Initially, following a good upgrade, this was supposed to be a cozy five-storey hotel for football fans. At least, that was the purpose for which the government supported MAKO in purchasing the facility. Now, Mr. Yanukovych Jr.’s firm has razed the building to the ground and announced its intent to construct a high-rise VIP office and residential complex, despite furious protests from neighboring communities. What’s more, the deadline for opening the facility is at least a year after the championship.

SOARING COSTS

Another problem Donetsk must deal with six months before the championship is transportation. The new airport, a key facility in the chain, is growing at a rapid rate. And so is its cost. The Cabinet of Ministers has already donated extra cash for construction several times over this year alone, thus swelling total public spending on the transportation complex to UAH 6.15bn from the initial UAH 1.19bn. This sets a record of sorts, costing twice as much as the official cost of Donbas Arena, the key Euro 2012 facility in Donetsk that Mr. Akhmetov built at his own expense. 

UEFA requires the future Euro 2012 passenger terminal capacity to cater for more than 3,000 passengers per hour. No one is prepared to predict how such capacities will be used once the short championship comes to an end. Moreover, MPs and top officials who now account for a lion’s share of routine passengers at the Donetsk airport have splurged another UAH 307mn on a separate VIP terminal for their own use.

The enormous amount of capital currently being invested in the airport and other football facilities in Donetsk go almost exclusively to Altcom construction corporation. Independent experts insistently link it to Borys Kolesnikov, Vice Premier for Euro 2012 Preparations. According to public sources, this year alone, the corporation received contracts from the government worth UAH 2.94bn.

Oleksandr Lukianchenko, the Mayor of Donetsk, claims that the city executive committee has already spent UAH 482mn of public funds on infrastructure, not counting the airport and is expecting to receive an additional amount of more than UAH 2bn in the near future. The most exotic purchases include five mobile toilets worth UAH 3.9mn and World War II tanks to decorate the museum grounds next to Donbas Arena. However, the lion’s share of the funding will be spent on roads.

Currently, the only streets of good quality are a few central avenues. The asphalt on the rest looks like a military obstacle course. This surprises no one, since in the last few years, the efforts of local authorities and relevant budget funding have all gone to build a road to relieve traffic congestion around Mr. Akhmetov’s private stadium. In the fall, it was named after the 75th anniversary of the Donetsk-based and Akhmetov-sponsored Shakhtar football club. This in itself is a paradox, as there are no actual houses under this address, since the highway cuts through a park, ruining the flood plain of the River Kalmius. This earned the omnipresent Altcom another UAH 250mn. The second stage of roadworks, due before Euro 2012 was estimated at UAH 279.79mn by the Capital Construction Department of the Donetsk City Council. The Cabinet of Ministers has just provided another UAH 500mn to complete the construction of a ringroad around the city. Take a guess as to who the subcontractor will be…


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