Exclusive: Coal deal showcases lack of transparency in Ukraine

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Exclusive: Coal deal showcases lack of transparency in Ukraine
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Ukrainian police are investigating two companies and a factory over a coal deal ...

NOVOVOLYNSK, Ukraine - Ukrainian police are investigating two companies and a factory over a coal deal which some anti-corruption campaigners say epitomizes the difficulties of doing business in the east European country.

State-run coal company Volynvuhillia ordered the Novovolynska-9 mine it oversees in Novovolynsk, northwestern Ukraine, to sell coal to privately held Ukrainskiy Natsionalniy Product , company documents show. A contract was agreed in December 2017 and sales began two months later. Energy ministry figures show wage arrears in state mines had reached 138.8 million hryvnias by Jan 1. Former Finance Minister Oleksandr Danylyuk told Reuters the arrears were largely caused by company officials spending money that should go to salaries on big purchases such as equipment because of the kickbacks that often go with such purchases.

Mykhailo Bondar, head of a parliamentary subcommittee on the coal industry, says Lvivska Vugilna Compania enrichment factory is being paid for a job it does not do because it lacks the technology needed. Yurkiv said the coal had previously gone directly to electricity generators without being enriched.

When Energy Minister Ihor Nasalyk tried to step in last May, his order that the deal with UNP be canceled was not acted on. Nasalyk did not respond when asked about his order not being carried out.

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