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State Treason in “Energoatom”. Or is it in the Security Service of Ukraine? – Investigation

The Security Service of Ukraine (SSU) is arguing that the Russians have recruited top-managers of “Energoatom” for subversive activities in Ukrainian energy system. What’s the damage? Well, 300 million EUR worth of tenders for shell companies with Russian goods, which are being lobbied by the SSU guys.

Some stories don’t make an easy reading, yet they are the ones showing what is really going on in the country. There are dozens of such stories, even hundreds of them, smaller or bigger ones. They have one thing in common: while catchy slogans are being shouted from platforms and TVs all over the country, money is being made discretely and unobtrusively behind the closed doors of the authorities.

Here is one such story of undercover deals.

The Security Service of Ukraine has been investigating the criminal proceeding against top-managers of “Energoatom”, who have been accused of state treason, subversive activity, breaking the rules of nuclear safety code, abuse of authority and documents forgery after the 2014 events.

Since August 2015 those accused in the proceeding are facing from 10 to 15 years in prison along with the confiscation of property. The deal is that “Energoatom” does not want to buy Russian goods at inflated prices, while the SSU believe that they jeopardize the state safety.

Surprisingly, this state treason and subversive activity case of nuclear top-managers, recruited by the Russians, never resulted in any arrests. Which is definitely unusual for the war times.

Which might point to the following:

  • (a)“Energoatom” top managers are not recruited by the Russians for subversive activity, after all;
  • (b) agents, working for the SSU, are so incompetent, that in over two years they haven’t been able to at least take to court the state treason case;
  • (c) the SSU themselves are so corrupt and recruited by the Russians that they are trying to make the nuclear company embezzle the state funds to benefit Russian providers of spare parts at inflated prices.

At the end of the text, we will provide our own answer to this dilemma. In the meanwhile, the official events of the case are the ones stated in one of the decision of investigating judge of Zaporizhia Zhovtnevyi court I.O. Smolka of February 13, 2017, that “Nashi Groshi” team has at their disposal (in the open part of the court state registry this part is missing from the criminal proceeding No. 12015080160000982).

All events of the proceeding concern repairs at Zaporizhia Nuclear Power Plant of backup diesel power generators. This nuclear plant, like practically any other in Ukraine, having been constructed in the soviet times, has been using RDES ASD-5600 diesel generators (produced by the plant “Russkiy Dizel”, Leningrad, now “Dizel-Energo”, St. Petersburg).

78Г

These machines are actually enormous diesel engines, connected to large-apartment-sized power generators. They are designed to be able to turn on quickly in case of emergency such as earthquake, so that ten seconds after the emergency the power supply would be renewed for continuous work of the pumps that supply water to cool the nuclear reactor. Even though nuclear power plant itself produces power, its work depends on external power supply. Fukushima disaster illustrated the fact that unreliable work of coolers during tsunami and earthquake caused the grave problems, which did not need to be so drastic, if the power had not been cut off at the Japanese station.

In the Soviet times, diesel generators of that kind were produced solely at the Leningrad plant, which is now called “Dizel-Energo”. They were destined for power plants as well as for ships. Actually, these nuclear power plant generators worked very little in the entire history of their existence. The reason is that luckily, we had very few such emergencies, when they had to work as designed. Practically, for decades, these diesel generators have been functioning the following way: mostly turned off and rarely turned on for check-ups. Which means that after 30 years of such induced coma stand-by regime such diesel generator requires repair with changing some of the spare parts – lining, tubes, and lubricants.

The way the Security Service of Ukraine see it

According to the SSU, the criminal organization of nuclear top-managers deliberately sabotaged repairs of diesel generators in 2013-2016. Which subsequently led to emergency down-time for two energy blocks of Zaporizhia Nuclear Power Plant in 2016. In total, the actions of this criminal organization caused 3 billion UAH of damages, according to the investigation.

The materials of the case state that all of it started when Volodymyr Pyshnyi, vice president of State enterprise “Energoatom”, in Russia in June of 2014, “was given the assignment from the Russian Federation representative to harm economical safety of Ukraine via actions aimed at weakening its energy independence in the on-going armed conflict”.

In order to carry out the order, Pyshnyi, having previously conspired with Oleksandr Shavlakov, first vice-president of “Energoatom”, during his business trip to “Dizel-Energo” in St. Petersburg, where he went to sign agreements for equipment supply to do capital repairs of RDES standby generators “made no agreement with industry association “Dizel-Energo” Closed JSC” for no reason”, “consequently, the RDES was not repaired in timely fashion”.

The court ruling states that Pyshnyi and Shavlakov further realized their criminal intent via influencing decisions of the tender committee member of Zaporizhia NPP to cancel for formal reasons results of the tender for supplying equipment and providing services for diesel generator repair. Such actions caused emergency downtimes for Zaporizhia NPP energy blocks.

Meanwhile Pyshnyi developed a scheme to give the task of Zaporizhia NPP diesel generator repair to a firm controlled by him. Thus, Pyshnyi and Shavlakov influenced the tender committee, which led to “Motortiekh” LLC, controlled by Pyshnyi, winning the tender for supplying equipment for Zaporizhia NPP diesel generators repair.

Even though, note the SSU investigators, paragraph of State Enterprise “National Nuclear Energy Generating Company “Energoatom” order No.413 of 18 May 2015 stipulates that solely companies manufacturing such products must supply the equipment. Thus, the SSU states that Russian “Diesel-Energo” is the only place to buy the equipment.

At the same time, the investigation points to the fact that according to paragraph 6.1.7 of NNEGC Standards 026:2012, repairs at Zaporizhia NPP should be carried out by repairing personnel of the NPP. Instead, it was “Motortiekh” that did the repairs. Also, the SSU investigators noted that the firm did not carry out the repairs in full, or even not at all, which led to two energy blocks downtime.

Moreover, in order to finance these works, Pyshnyi and Shavlakov helped to include the new item into the tariff argumentation, further approved by the National Commission for State Regulation of Energy and Public Utilities. It was 150 thousand USD worth of the repair works as a cost for one diesel capital repair. Even though, as reminded by investigation, the NPP workers should be the ones doing repairs. According to the SSU investigators, in 2014-2016, via the abovementioned illegal actions, 1.8 million USD was included to the tariff to finance 12 capital repair of RDES diesel generators of Zaporizhia NPP.

Besides the already mentioned Pyshnyi and Shavlakov, according to the investigation, there were other members of that criminal organization, namely advisor to NNEGC’s president H.H. Balakan, NNEGC’s repairs director V.V. Urbanskyi, general director of Zaporizhia NPP division V.O. Tyshchenko, first deputy general director and head engineer F.M. Krasnohorov, and head of legal department of Zaporizhia NPP division A.O. Lokhmatov.

Thus, as the SSU see it, criminal organization consisting of “Energoatom” and Zaporizhia NPP top managers, carrying out the order of some obscure person from Russia, in the wartime, committed a number of illegal actions which led to the following:

  • Deliberate sabotage of Zaporizhia NPP diesel-generator repairs in 2013-2016 (resulting from unreasonable change of schedules, terms of diesel generator capital repairs, unreasonable repeated change of positions when selecting service provider and spare parts for capital repairs);
  • “Energoatom” failed to receive 3 billion UAH from power generation as a result of emergency downtimes of energy block No.1 (during 149 days) and No. 2 (132 days) of Zaporizhia NPP in 2016;
  • Raised tariff for electric power resulting from repeated inclusion of costs of the Zaporizhia NPP diesels capital repairs to the tariff structure. According to the SSU, a total of 1.8 million USD was unreasonably included in the tariff in 2014-2016;
  • The state incurred the loss of over 270 million UAH because of illegal use of the money not for what it was meant to in 2014-2016.

The way “Nashi Groshi” sees it

Here is our answer to the question asked in the beginning: why, in two years of investigation, the SSU didn’t arrest anyone of “Energoatom” management, if they had been recruited by the Russians to sabotage Ukraine:

(c) the SSU themselves are so corrupt and recruited by the Russians that they are trying to make the nuclear company embezzle the state funds to benefit Russian providers of spare parts at inflated prices.

It can be explained as follows.

The SSU claims that managers associated with Nedashkovskyi involved the “Motortiekh” firm for 150 thousand USD worth of works. Yet, the very same managers are investigated in the case of the National Anti-corruption Bureau of Ukraine concerning bribery of Mykola Martynenko group at “Energoatom”. The sums involved were exponentially higher. Why would billionaires go to all that trouble for mere trifle?

The explanation is much simpler, even, so to say, primitive: in its criminal proceeding the SSU are not even trying to cover the fact that annoys them the most: the nuclear power guys opposed procuring of Russian spare parts. The “Nashi Groshi” team has the letter at their disposal from Oleksandr Shmitko, head of the SSU department in Zaporizhia region, to director of Zaporizhia NPP. It claimed that involving any other contractors to repair diesel generators except the Russian producer representative (meaning the Latvian shell-company “Raido Trading”) harmed economic interests of the state represented by Zaporizhia NPP.

img296-обрез   img298-обрезї

To the acting general director of Zaporizhia NPP division of the State Enterprise “NNEGC “Energoatom”

Yu. V. Kulba

Dear Yuriy Vasyliovych!

The department of the SSU received information about the prerequisites for causing economic harm to the state in the person of Zaporizhia NPP department, State enterprise “NNEGC “Energoatom” as a result of making a contract No.75/78-16 of 30 May 2016 with “Motortiekh” LLC (state registration EDRPOU code 37113876) (“Repairs and technical service of general-purpose machinery” (DK 021:2015 50530000-9 Services of repairs and technical servicing of machinery, further – “Contract”) to carry out 4 repairs of 78G RDES ASD-5600 type diesels [generators] of energy blocks No. 1 and No. 2. (manufactured by Closed JSC “Dizel-Energo”, the Russian Federation, representative – “Radio Trading” LLC, the Republic of Latvia, further – RDES).

Specialists and using spare parts, instruments and equipment of the producing plant – Closed JSC “VO “Dizel-Energo”. Closed JSC “VO “Dizel-Energo” produces 78G type diesels and there are no analogues to its equipment on the territory of Ukraine, possesses complete package of designing (blueprints) and repair documents for diesels, as approved by the State Nuclear Regulatory Inspectorate technical conditions for its production. The producing plant is a corporate supplier of State enterprise “NNEGC “Energoatom”, which on 25 November 2014 received decision No. RSh-P of 0.05.094-14 (valid till 2019) from the State enterprise “NNEGC “Energoatom” on approving it as provider of services, equipment and spare parts-instruments-tools for the type 78G diesels RDES for the NPP(s) of Ukraine.

Thus, the separate department of Zaporizhia NPP involved “Motortiekh” LLC in carrying out capital repairs (TO-5) of 4 type 78G RDES diesels for the energy blocks No. 1 and No. 2, while it is not a producing plant or its representative and which lacks experience in providing services of medium (TO-4) and capital (TO-5) repairs of type 78G RDES ASD-5600 diesels for energy blocks at NPP in Ukraine and abroad, which can cause 3,377,639.24 UAH worth of economic damages to the state interests in the person of Separate department of Zaporizhia NPP.

We inform in order to take immediate measures to avoid damaging economic interests of the state in the person of the Separate department of “Zaporizhia NPP”.

Sincerely yours,

Head of the Department O.H. Shmitko 


 

According to “Nashi Groshi”, tender prices of the parts exceed their cost price tenfold. It’s this delta that seems to be the apple of discord.

The “Energoatom” representatives in 2014 actually went to Russia in 2014 to look at the blueprints, which would potentially enable Ukraine to make spare parts for RDES for cheaper and not to depend on the country-aggressor concerning the sensitive issue of economic safety.

“Motortiekh” actually made blueprints from those spare parts during their repair works, so that in the future “Energoatom” would be able to place orders in Ukrainian plants. However, the criminal proceeding on “state treason” and “sabotage” enabled the SSU to conduct searches and seize the blueprints made before. We reiterate – the Security Service of Ukraine seized all the copies of the blueprints which would enable “Energoatom” to gain independence from the Russian supplier.

Yuriy Nedashkivskyi’s managers resisted while they could, yet now Zaporizhia NPP without any qualms conducts these procurement itself or via shell companies with the Department of the SSU blessing and overseers from the Main department of counter-intelligence defense of the state’s interests in the field of economic defense of the SSU (see «Zaporizhia NPP procured 2.4 million EUR worth of Russian spare parts without even trying to imitate open tender after receiving letters from the SSU»). Notwithstanding the fact that «Russian plant that the SSU is forcing “Energoatom” to procure products from via Belarusians from Latvia, is going bankrupt».

What’s the damage? About 300 million EUR.

That’s the cost of the Russian spare parts necessary for planned repair of diesel-generators in Ukraine for “Energoatom”. Like we said, the delta is about 90%.

For the comparable money, one can procure brand-new generators from Europe. While the set of spare parts from the Russians costs 4 million EUR, brand-new generator from European manufacturer would cost 5 million EUR.

What is even cheaper and safer – to set up our own production from the blueprints, made from Russian spare parts (no, they are not subject to patenting).

What we have instead is the SSU case on some saboteurs and traitors at “Energoatom” teetering precariously on the edge of the law to avoid buying from the Russians during war with Russia at inflated prices. The ones the SSU allows to go to work daily and do their thing for over two years without making any arrests for treason and sabotage.

Now it’s your turn to answer the question why the SSU are doing it: is it because the case is fabricated, or is it because of SSU’s acute case of incompetence, or is it because the SSU is corrupt through and through and collaborates with the Russians to split the “delta” from procuring the Russian spare parts?

Yuriy Nikolov, Iryna Sharpinska, “Nashi Groshi”, December, 13