The Business Ombudsman Council presented the results of its investigation report on “Challenges in Protecting and Restoring Critical Infrastructure Through Private Sector Engagement.” The report was prepared by the Council’s Policy&Recovery team, led by the Deputy Business Ombudsman Tetyana Korotka.
In the report, the Council analyzes existing problems in the critical infrastructure (CI) restoration field, particularly the energy sector and also highlights key challenges complicating projects implementation.
“The russian federation full-scale invasion of Ukraine and constant attacks on civilians and infrastructure created an emergency situation the consequences of which can be overcome only through a comprehensive approach, strategic management and effective cooperation between the state, business and international partners. Having a specially equipped team at the Business Ombudsman Council, we propose that the Government of Ukraine and stakeholders join efforts and direct them to the earliest possible elimination of obstacles to successfully implement reconstruction projects,” said Roman Waschuk, Business Ombudsman .
According to the World Bank, Ukraine’s recovery need is USD 486 bn, of which USD 5 bn is required for urgent infrastructure restoration. Critical infrastructure suffered the most, with losses estimated at USD 155 bn.
In the report, the Council notes that problems such as unstable financing, delayed payments to contractors, administrative barriers, difficulties in land issues, corruption risks in public procurement, staff shortages, and imperfect regulatory framework are seriously hampering recovery processes and jeopardizing infrastructure sustainability in the future.
“Rebuilding critical infrastructure is not only about restoring destroyed facilities, but it is also a strategic opportunity to build a more resilient and modernized system. A successful outcome of this process depends on trust among all parties, effective governance, transparent financing mechanisms and coordinated interaction of all participants engaged in recovery,” noted Deputy Business Ombudsman Tetyana Korotka.
In its report, the Business Ombudsman Council offers the state comprehensive recommendations that could change the approach to reconstruction in both the short- and long-term perspective. They include, inter alia, introducing clear rules to protect businesses against the risks of non-payment for works performed, creating an effective coordination mechanism between stakeholders, reforming public procurement procedures and providing for transparency in financing.
“In 2022, the President of Ukraine approved a decision on constructing three levels of energy facilities protection. Autostrada company implemented this project – from design to construction, having utilized its own production capacities. Design solutions developed by Autostrada design institute jointly with the British military engineers, became the basis of the energy protection program. Construction was conducted in extremely complex conditions: our workers risked their lives under shelling, without funding and constant obstacles. To speed up works, Autostrada invested over USD 50 mn in own production of concrete and metal structures. Projects efficiency was confirmed by military, international partners and experts. Volumes, cost and quality of completed works were confirmed by the State Audit Service, an international technical supervision and judicial experts. Ready-made shelters repeatedly withstood shelling, but due to lack of financing, works pace now reduced to a minimum. The company performed works even for credit money by paying over UAH 500 mn in interest, which became its direct losses. However, these losses were not and are not claimed as incurred by the state. The state’s debt to Autostrada, including works completed in 2022-2023, amounts to over UAH 3 bn. Unresolved critical infrastructure protection issues undermine energy safety and questions implementation of decisions of the President, the General Headquarters and the National Security and Defense Council’, noted Dmytro Troiekurov, General Director of the Autostrada Group of Companies citing the importance of the BOC investigation.
As with other systemic recommendations, the Council will continue working with partners to implement recommendations and build a business environment meeting the needs of Ukraine’s economy accelerated recovery.
You can download the report here.
