Legal? Safe? Wise? Low-cost Russian company to build nuclear reactors in Ukraine

by Jack Laurenson Ukraine.com staff
January 28, 2019
This article originally appeared in Kyiv Post

Photo from UNIAN

It’s not immediately clear if the state-owned power plant in Khmelnitskiy is in breach of Ukrainian, European Union or U.S. sanctions with this business arrangement to build the new reactors.

Škoda JS (reportedly a Russian owned company) has been chosen to build two new nuclear power plants in Ukraine.

Based in the Czech Republic, Škoda JS, is scheduled to start building the reactors at the Khmelnitskiy nuclear power plant, about 300 kilometers west of Kyiv. When completed, the reactors would double the plant’s electricity output.

Škoda JS is a subsidiary of Netherlands-registered OMZ BV, which appears to be a front for the Russian company United Machine Building Plant, owned by Russia’s state-owned Gazprombank. Ukraine has put sanctions on Gazprombank, but not Škoda JS, although the latter Czech-based company is reportedly under U.S. and European sanctions.

Journalists with RFE/RL reported that Škoda JS  “was chosen for this without an open tender” for this project, valued at more than Hr 70 billion, (around $2.5 billion). The Khmelnitsky nuclear power plant administration stated that Škoda JS’s low cost, significantly cheaper than other potential suppliers.

It’s not immediately clear if the state-owned power plant is in breach of Ukrainian, European Union or U.S. sanctions with this business arrangement. However, the National Anti-corruption Bureau of Ukraine, (NABU), is looking into offshore financial arrangements and possible, unlawful dealings with Nikolai Martynenko, a former Ukrainian member of parliament from the People’s Front party.

Despite this current controversial business plan for the Russian company to build the reactors, many locals are skeptical any construction will actually be realized by any company.“These past 30 years have been exactly the same. Each time: the French will build, then the Czechs, then Russia… Therefore, I do not believe in this venture,” one local resident told Ukrainian journalist Ekaterina Kraplyuk, who writes that one in seven jobs in the city are dependent on the plant.