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"Despite the change in power in Ukraine's capital city, one of the main financial drains from the municipal budget remains the same, an independent audit has shown.
Kyiv's metro has kept a contract with Kharkiv-based Alfa Pay Terminal, a murky firm set to make millions of dollars over the next decade by setting up a new fare card system for public transport. Critics say this is money that could easily have gone to the city budget instead.
Representatives of Alfa Pay Terminal refused to be interviewed for this story.
The original contract with Alfa Pay Terminal was made during the administration of former President Viktor Yanukovych. The company was the only bidder for this contract in the April 2013 competition, raising speculation that the contract was fixed.
The company pledged to invest $1.5 million into a new ticketing system for the Kyiv metro in return for 8.47 percent of the metro's gross revenues for the next 10 years, according to Public Audit, a non-government watchdog that examined the deal recently.
Even if the current low metro prices of Hr 2 per ride remain in place, Alfa Pay Terminal is set to make about $4.7 million per year – a handsome return on their investment.
If the metro fares are doubled per trip as planned, the firm’s profit will increase to $9 million per year. In the next 10 years, Alfa Pay Terminal can expect to earn between $45 million and nearly $93 million per year, the Public Audit report said.
The company will be making money despite the fact that the metro itself remains loss-making, draining millions of hryvnias from the municipal budget annually. Although the metro is used by nearly a million people per day, each ride is heavily subsidized.
Moreover, authors of the research said that the city metro would easily be able to raise $1.5 million without external investment and paying a good chunk of their income to a third, private party. “It would be more advisable for the city to keep this money at the municipal enterprise,” the auditors said.
There’s little known about Alfa Pay Terminal's real beneficiaries.
Mykhailo Leonov, who calls himself an “authorized representative” of Alfa Pay Terminal, told the Kyiv Post in October 2013 that he wasn’t allowed to disclose the owners of the firm. He, however, insisted that there had been more than one bidder for the contract with the city, and his company won fairly and squarely.
Public Audit said that Alfa Pay Terminal is an offshore-registered business. This company has already won a lucrative contract for electronic payments in Kharkiv metro. “Its promoter and curator in Kyiv was Yevhen Vodolazov from Kharkiv,” who was a head of Department of Transport Infrastructure of Kyiv state administration until recently, the report said."
And, the Ukraine National Guard is looking good.
Ukrainian National Guard troops are protesting outside the presidential administration office in Kiev as they demand demobilization. They are refusing to return to their barracks outside the capital.
About 200 soldiers have surrounded the building claiming they have served six months longer than their contracts stipulated.
Soldiers are chanting, “Demobilization!” and, “All for one and one for all.”
They say they are not going to leave until authorities answer their questions, key amongst them being when they will be able to return home.
Members of the presidential administration, however, have demanded that the soldiers immediately return to their military barracks.
“Soldiers, come on, return to [your] military units, we’ll figure this out there,” one of the officials told the protesters, according to TASS."
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There's a war going on and soldiers want to go home.
