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Poroshenko-Akhmetov: metastases of mutual love covering Ukraine

Petro Poroshenko and Rinat Akhmetov. Photo: informat.com.ua

Call-girl opposition

Ukrainian President Petro Poroshenko’s administration has faced a serious problem, as the parliamentary coalition in the Supreme Rada exists on paper only and there is a risk of the parliament’s dissolution and snap elections. Poroshenko’s party will hardly survive this. On the other hand, oligarch Rinat Akhmetov is experiencing more and more business problems and needs a strong ally and what they in 90s called a crime-sponsored cover for his business-assets.

That is why the “metastases of mutual love” of Poroshenko and Akhmetov are spreading in several directions at once. Economically, demand creates supply.

At present, Poroshenko and his proxies have found themselves in a very complicated situation, as the president’s Administration and the Cabinet need votes in Supreme Rada, but there are no such. Of course, Andrey Parubiy, the democratic parliamentary speaker, refuses to show the list of the parliamentary majority members. It is evident that there is no coalition in the Supreme Rada. Formally, the parliamentary majority comprises the factions of the Petro Poroshenko Bloc (142 deputies) and People’s Front of Arseniy Yatsenyuk-Alexander Turchinov- Arsen Avakov (81 deputies). In total, the parliamentary majority comprises 223 versus 226 parliamentarians – the minimum number required by the Constitution. Since there is no coalition, under the Constitution, parliamentarians have a month to set up a new one. Otherwise, the president has a right to dissolve the parliament and announce snap elections.

Having no coalition in Rada is fraught with two problems:

  1. a) risk of snap elections
  2. b) lack of quorum to pass laws the president’s administration has brought to the parliament through the Cabinet.

Meantime, Akhmetov controls part of the Opposition Bloc Party (43 parliamentarians). In addition, the oligarch has been “renting” Oleg Lyashko and his faction of Radical Party (another 21 deputies). The mutual interests is clear. The required minimum – Akhmetov’s deputies (about 20 “oppositionists” and Lyashko’s deputies) support the government’s bill when necessary. This is a kind of “call-girl” opposition –very useful and favorable for the authorities.

About how Semenchenko “set the clock ticking” for Akhmetov

One more factor stimulates Akhmetov to seek a common language with the president and his men. On January 25, an organized group of several people’s deputies and former members of battalions blockaded the railway communication with Donbass. On January 25, they blocked the railway route Lisichansk-Lugansk-Popasnaya running between the towns of Gorskoe and Zolotoye (Lugansk region). On January 30, it was reported that the unknown damaged a 1.15m rail gage on the 42nd km of Svetlanovo-Shepilovo running line.

Since the very beginning, economic and political experts and journalists have noticed that Semenchenko & Co were the first to block the railway line through which Akhmetov’s DTEK company was transporting coal from Donbass to his TPPs in Ukraine and regularly for the Centerenergo state company. The military tensions in the area of Avdeevka has endangered at once two metallurgical combines of the oligarch’s business empire. The Avdeevka coke and chemical plant, the key supplier of coke for Zaporozhstal Company (in Zaporozhye) and Ilych Plant (in Maruipol) appeared in area of military actions. Although the Avdeevka coke and chemical plant was saved from idleness, Semencheno & Co are still blocking the railway line that links Donbass and Ukraine.

The line of demarcation in Donbass is a line of contraband “points.” That is why, Semenchenko and his team seek to reshape the control over contraband goods and “set the clock ticking” for Akhmetov. This will make the oligarch seek a common language with the president’s men, the only force able to protect him from the “camouflaged rocketeers.” Although there are another two real forces – Speaker Andrey Parubiy with his “Maidan’s Self-Defense” battalions and Avakov-Turchinov with the People’s Front. However, it appears that Parubiy does not want to interfere, while Avakov and Turchinov are actively cheating businessman Vitaly Kropachev, one of the organizers of Tornado battalion, out of his money. Therefore, it is logical that Akhmetov seeks the help of the president’s administration.

Three economic pillars

After all, there are three areas of mutual interest of Akhmetov and Poroshenko. The first is Akhmetov’s DTEK engaged in supply of coal to the uncontrolled territories. DTEK’s assets are Komsomolets Donbassa Mine, DTEK Rovenkiantracit and DTEK Sverdlovantracit (an integral anthracite extraction and preparation property complex). Legally, such operations are registered as a contract between the two Ukrainian enterprises, except perhaps one of the contractors supplies coal from Donetsk and Lugansk People’s Republics. However, such operations require a special permission of Ukraine’s Security Service, which acts the way Poroshenko’s Administration tells it do.

Second, there is a commercial component in terms of “Rotterdam+” formula for calculating coal price. Thus, Akhmetov’s structures sell energy resources from Donbass as coal from SAR/Australia allegedly delivering it via a port in Hollande. Hence, the margin between the purchase price in Donbass (“Strana” gives 1,500 hryvnias on the mines after kickbacks of Ukraine’s Security Service and DPR –LPR, while on makeshift coalmines, it is even cheaper) and the cost of “Rotterdam+” at about 3,100 hryvnias. DTEK puts that into the electric power price. This scheme that bring extra-profits to Akhmetov’s companies cannot work without “a crime-sponsored cover.”

Third, the DPR-LPR authorities threaten to nationalize Akhmetov’s assets. Last Friday, LPR’s People’s Council passed a bill on the taxation system in the first reading. The bill looks to nationalize the enterprises operating in the territory of LPR but not registered in the agencies of the self-proclaimed republic. In this light, Head of LPR Igor Plotnitsky came out with an official statement listing the enterprises that may be nationalized. Among others, the list comprise Akhmetov’s assets: DTEK Sverdlovantracit, DTEK Rovenkiantracit and Kransdonugol PJSC (Avdeevka coke and chemical plant, part of Metinvest of Akhmetov and Novinsky, holds the 99, 9297% stake in the company).

Is it a political game or real plans is not clear yet. Sources in Lugansk say Akhmetov has reregistered his companies yet long ago, as the LPR authorities requested, while some mid-sized businesses have lost their assets. Here is how it happens: when a businessperson agrees to sign statutory documents prepared at the request of LPR, he is summoned to Ukraine’s Security Service where he faces terrorism financing allegations. Meantime, Rinat Akhmetov has easily reregistered his assets that have been operating under jurisdiction of Ukraine and DPR-LPR for a long time already. Furthermore, Ukraine’s Security Service has no claims to him. If Akhmetov helps the Supreme Rada and the Cabinet with votes of his parliamentarians, President Poroshenko will personally punish those who will try to aggrieve “such a good man.”

The comatose condition of the parliamentary majority and Akhmetov’s desire to help is a good start for reforming the JSC “parliamentary majority” and the Cabinet of Ministers. What will be Akhmetov’s quota in the new government is not known yet. In the meantime, it is reported that the first deal of the sides has been made already: Akhmetov paid 200 million dollars to Poroshenko’s proxies in exchange for approval of his creature Sergey Knyazev (previously the head of the Criminal Investigation Department at the National Police) for the post of the National Police Head of Ukraine.

And finally, Ukraine’s mass media report various options of reforming the parliamentary majority and, consequently, of possible reshuffles in the leadership of the Supreme Rada and the Cabinet. To make the ‘owners’ of deputy groups (like tycoon Igor Kolomoisky) more negotiable, Poroshenko’s PR makers leaked information to “shake up” the “political partners.” According to the leaked information, the new speaker of the parliament will be Oleg Lyashko, a scandalous MP, the head of the Radical Party. This is hardly possible, indeed, but such prospects will sober up the other political actors and make them more negotiable.

Sergey Sokolov for EADaily (Kiev, Ukraine)

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