The Scam Express

During Viktor Yanukovych’s presidency, Ukrainian corrupt officials acted openly, cynically, and with impunity, and the scale of their scams was off the charts. Both the empty Ukrainian budget and deceived Chinese partners fell victim to one of the most notorious scams called “The Air Express”.

In 2010, the Ukrainian government created the State Agency for Investment and National Project Management of Ukraine (Ukrnatsproject), headed by local politician Vladyslav Kaskiv. Ukrnatsproject’s main task was to ensure the implementation of strategically important projects to guarantee the modernization of key sectors of Ukraine’s economy.

In fact, Ukrnatsproject had to search for partners and attract investments for ambitious ideas that the state of Ukraine identified as a priority for its development. This impressive list included the construction of an LNG-terminal on Ukraine’s Black Sea coast to receive 10 billion m³ of liquefied gas, the creation of a “clean” wind and solar energy source to the capacity of 2000 MW, the construction of modern facilities to process solid household waste, a program of providing the population with quality drinking water, the implementation of the President’s Initiative to hold the 2022 Winter Olympics in the Carpathian mountains, etc.

A special place in this list was occupied by a project entitled “The Air Express”, the construction of a high-speed railway between Ukraine’s capital Kyiv and its main airport Boryspil. On June 20, 2011, during a visit to Ukraine by Hu Jintao, the Chairman of the People’s Republic of China, Ukrnatsproject signed a loan agreement to finance the implementation of the project with the Chinese Exim Bank.

A cheerful start to a dead end project. Source: Holos Ukrainy

The Chinese agreed to provide their Ukrainian partners with a $ 372 million loan. The terms of reference included a number of engineering and construction facilities, including the construction of a railway track, an aviation and railway facility at the Kyiv-Passenger station, several highway overpasses, a railway overpass and a transformer substation.

According to representatives of Ukrnatproject, the company China National Machinery Industry Complete Engineering Corporation was to act as general contractor. Journalists failed to find information about a company with this particular name. The closest was China National Machinery Industry Corporation (Sinomach) which was already represented on the Ukrainian market, and China National Complete Engineering Corporation (CMCTC) (http://en.cmcec.com).

In December 2011, a “silver crutch” was hammered at the starting point of the planned railway line. The Air Express was to be launched by the start of the Euro-2012 championship held in Ukraine and Poland. However, construction was constantly postponed due to doubts on the Chinese side.

Instead, the cost of the project gradually increased. On July 25, 2012 Ukrnatproject signed an agreement with China’s Sinosure Export Credit Insurance Corporation for $ 36.39 million in loan insurance (10% of the project cost).

In the end, Ukrnatproject received $ 50 million from the Chinese bank, which was basically stolen. The money disappeared together with the head of Ukrnatproject Vladyslav Kaskiv.

The head of Ukrnatspoject, Vladyslav Kaskiv. Source: Radio Liberty

In 2016, Kaskiv was included in the international wanted list. He was detained in Panama in September 2016. A local court set Kaskiv’s bail at $ 600,000. Panama refused to grant Kaskiv a political refugee status, after which he was extradited to Ukraine. Subsequently, Kaskiv was released on bail in the amount of UAH 160,000 ($ 6,400).

According to the prosecution, Kaskiv and his accomplices cost Ukraine UAH 7 billion 400 thousand. The case is currently pending before the High Anti Corruption Court of Ukraine.

The Chinese side received insurance payments.

The “Air Express” project was revitalized in 2016. In 2018, the state railway company Ukrzaliznytsya launched a railway express to Boryspil Airport.

 

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