Black Sea Fleet escapes with bankruptcy

13.09.2010 Sevastopol's court decided to start bankruptcy proceedings against Black Sea Fleet (BSF) Construction Department. This decision has become the logical completion of sequent events. Being the principal creditor of BSF Construction Department, Sevastopol superannuation fund made attempts to launch bankruptcy against the department. According to the fund, current debts of BSF Construction Department are UAH 11.23 mln, which is 57% of total indebtness to Sevastopol superannuation fund.

Staff of BSF Construction Department faced salary problems as early as 2008. Large-scale staff reductions of civilian employees started in 2009; some superannuation-aged military servicemen were also dismissed, others were transferred. Finally, Construction Department ceased to exist as defense ministry's organizational unit.

Coming bankruptcy is not the only scandal related to BSF Construction Department. Last year Sevastopol pensioner Alexander Dobrovolsky enchained himself to the entrance of Black Sea Fleet HQ trying to invite attention to problems of 200 shareholders who were left without their money. According to them, in 2005 BSF Construction Department kicked off building of four multistorey houses having collected money from future lodgers. Builders must have completed the objects by 2007, although the houses haven't been put in service so far.

Shareholders were told that the two houses had been 95% completed but the problem was "final investments". People had been waiting for those "investments" for two years and then started to hit the bricks. However, their protest actions had no results. According to an anonymous source in Black Sea Fleet, shareholders dealt not with real BSF Construction Department, but with same-named Ukrainian company. Obviously, with the beginning of bankruptcy proceedings the shareholders might wave goodbye not only to dreams of dwelling but hopes to return at least a part of invested money, too.

Sevastopol authorities bring to notice that apart of debts which will remain after bankruptcy of the constructional department, the city faces other problems related to BSF. "We do not put up with the situation around BSF debts. This year staff reductions at the fleet reached 12 %, so the city budget received fewer taxes… Another problem is 13th Ship Repair Plant which stays nearly idle", described the situation Valery Saratov, the Mayor of Sevastopol.

It is curious that only few months ago Crimean and Ukrainian authorities cherished great hopes in Russian-Ukrainian agreements on BSF deployment issues. Crimea expected serious investments into local economy; other regions believed in promises that gas-related agreements would save people from rate increases. "Speaking simply, results of these agreements will have positive effect on each Ukrainian's purse and give an opportunity to shoot forward industrial development, municipal housing economy and so forth", said the president Viktor Yanukovich after signing of the agreement.

"Given that the agreement implies Russia's serious investments into infrastructural assets located not only in Sevastopol but all over Crimea, the prolongation of BSF deployment will give Crimea a strong impulse to socioeconomic development of Crimean region and welfare improvement of local people", either promised or expressed hope Vladimir Konstantinov, speaker of Crimean parliament. As is known, in accordance with the intergovernmental agreement Russia must contribute to socioeconomic development of those populated areas where BSF military units are deployed.

But four months passed seem to be enough to become disappointed in the Russo-Ukrainian agreement not only for all Ukrainians faced gas rate increase but authorities of Sevastopol as well. The city mayor Valery Saratov said at the press conference that the city administration would appeal to Russian partners about the situation formed in the hero city of Sevastopol. "Our expectations related to the Kharkov agreements have not come true. We wanted more investments and orders for BSF assets. This has not happened. Black Sea Fleet facilities are in tight situation, and we don't put up with it", said Saratov.