Where did the money of "Ukrbud" go?

Where did the money of "Ukrbud" go?

To complete the unfinished projects of "Ukrbud," more than 2 billion UAH are needed. Where does "Kyivmiskbud" plan to get them?

"Kyivmiskbud," which President of Ukraine Volodymyr Zelenskyy tasked with completing Ukrbud’s unfinished projects, has crossed the halfway point – more than half of the abandoned residential complexes have been accepted – 12 objects.

These are RC "Pectoral," "Novomostytskyi," "Sunny Riviera," "Kharkivsky," "Harmoniya," "Kyrylivsky Hai," "Guardians," Freedom, Lake House, Twin House, Urban Park, and "Akadem Park."

Work is being carried out on all of them, some are already at the final stage, and some are in the initial stage. Besides, the transfer of four more objects is expected shortly.

And although it was planned to accept all 22 objects by now, we faced many difficulties, which I wrote about in detail three months ago.

During this time, we managed to put three objects into operation: "Sunny Riviera," "Pectoral" (1-2 sections), "Novomostytskyi." 

The first two of these have already received postal addresses. For two more – "Kharkivskyi" and "Harmoniya" — current changes in documentation have recently been registered, and documents have been submitted to the DABI.

The Kyiv City Council exempted Ukrbud objects from the payment of equity contributions (which are being canceled from January 1, 2020), thus removing an additional financial burden from the objects, many of which are unprofitable.

The Ministry of Defence has finally paid attention to the problems of Ukrbud’s investors. 

Of the four objects on defence lands, RC Urban Park was accepted, the main contract for RC "Oberih-2" was signed, and internal approval in the ministry’s departments is underway for ЖК "Charivne Misto."

For RC Art House, the Ministry of Defence must properly formalize the land plot so that "Kyivmiskbud" can legally accept it.

At the same time, these victories – are the merit of not officials, but investor-trustees who invested their money in construction and actively defend their rights. 

They participate in rallies, delve into legal and economic nuances, and set an example for many of coordinated work.

Now we are approaching the main component of any construction – financing. The question everyone has is – with what funds does "Kyivmiskbud" plan to finish these unfinished projects?

According to the primary audit, the total amount needed to complete all objects is 8.45 billion UAH, of which unrealized real estate and additional payments amount to 6.36 billion, and the deficit is approximately 2.1 billion. 

How this figure will change, we will understand after the full transfer of all objects, and then we will turn to the State Mortgage Institution (SMI) with a proposal to buy out apartments. We have prepared the initial documentation and worked on the decree.

Currently, construction is ongoing at the expense of apartment sales in these objects – each RC is self-financing. 

New clients conclude contracts with "Kyivmiskbud," which means every hryvnia will go to construction, and this money is under control. 

Which cannot be said about the second important part of financing – additional payments on installment plans from clients for previously purchased apartments in the Construction Financing Fund (CFF), managed by the company "Zhytlo-Capital."

In the complete package of documents for the transfer of Ukrbud objects to Kyivmiskbud, there are contracts according to which "Zhytlo-Capital" is obliged to transfer these additional payments to "Kyivmiskbud" for construction financing. But for a number of objects, they are in no hurry to do so.

The nuance is that previously the client did not conclude any contracts directly with "Ukrbud"; all transactions were conducted through "Zhytlo-Capital," the manager of the Construction Financing Funds. 

What is CFF? It is a financial institution that concludes a contract with the developer and undertakes to finance the construction of the building. 

Moreover, according to the law, the rule applies: one fund – one object. Non-targeted use of money or transferring it from one to another is prohibited. 

Nevertheless, the money from the funds was not spent on construction but disappeared somewhere. Where? This is currently being investigated by law enforcement agencies.

But while the investigation is sluggish, "Zhytlo-Capital" continues to play dangerous games. 

They are trying to transfer objects to unknown developers who agree to their schemes. 

They drag out the signing of financing documents for RC constructions already accepted by "Kyivmiskbud" for various reasons. 

They refuse to fulfill their obligations under guarantee letters to investors without any explanation of reasons.

It is difficult to explain why the people responsible for more than 13,000 families being left without apartments feel so comfortable, and investigators should answer this question. 

But trustees who have been fighting for their housing for a year should not again find themselves hostages of the situation and inaction of state bodies.