Trash and Corruption

In a long post on her blog yesterday, Lubov Sobol writes about what she has uncovered about waste collection in the city of Moscow.

Since Sergei Sobyanin became mayor in 2012, Sobol writes, “most of the business of waste disposal has been monopolized in the hands of a few companies. 9 fifteen-year contracts, broken down by Moscow’s administrative districts, totaling more than 145 billion rubles were distributed among 5 firms.” And the selection process was less than transparent, she alleges.

“It was very interesting to see who is behind these companies… It turns out that traces nominal holders leads to high-ranking officials and oligarchs.”

Who are the beneficiaries?

1. Gennady Timchenko and Vice-Governor of St Petersburg, Vladimir Lavlentsev.

The company “Ecoline” has two contracts totaling 25.6 billion robles to collect garbage in two districts of the city. “Ecoline” is connected to ARKS, “one of the largest construction companies in Moscow.” According to media reports, the founder and owner of the company is Alexander Lavlentsev, whose son Vladimir is vice-governor of St Petersburg responsible for utilities.

Sobol says that Timchenko held a stake of 25% of ARKS at the time of the receipt of the contract.

2. Igor Chaika (the youngest son of Russia’s Prosecutor General)

The company “Charter” also has two contracts to collect garbage in two districts in Moscow. These total 42.9 billion roubles.

3. Roman Abramovich

The company “MKM-Logistics” holds 2 contracts totaling 40 billion rubles. There are three offshore companies associated with “MKM”, including Ervington Investments, whose ultimate beneficiary is Roman Abramovich. The beneficiaries of the other two offshores “are hidden in the BVI [British Virgin Islands].”

4. Sergei Chemezov

The company “Spetstrans LLC” holds one contract totaling 12.4 billion rubles.

“The only founder of the company “Spetstrans” is one Elena Evgenyevna Mochalova. She is also the CEO of “RT-Invest Finance” the sole founder of which is “Rt-Invest”. “Rt-Invest”, in turn, owns the company “Rostec”. Rostec’s permanent chief since the state corporation was founded is Putin’s friend, Sergei Chemezov. Even in 2011, the media wrote that Rostec wanted access to the waste services market, and in June 2011, Kommersant reported that “Russian Technologies” [Rostec] and “United Russia” [the party in power] had agreed to establish a national garbage operator.”

5. Unknown

The company “MSK-NT” holds two contracts totaling 21.4 rubles. It was formed in April 2013, and just seven months later “received its first multibillion contract for the removal of waste in Moscow. During the receipt of the contract, the founder and CEO of the company was Igor Mikhailovich Cheremsky. I’ve only been able to find out the following about this little-known businessman.”

“Prior to receiving this contract, Cheremsky owned 50% of a company called “Praktika-Servis” and competed with the company “Clean City” owned by Alexander Dvorik. After receiving the contract for garbage collection, “Praktika” has not participated in any auctions.”

Sobol continues on with the story, and concludes that “according to two sources, the beneficiary of the contract is Pyotr Biryukov,” Moscow’s Deputy Mayor responsible for housing, though she cannot get “official confirmation of this”.

You might be able to justify such long-term contracts if you invested in infrastructure, and technology for recycling, etc. Sobol writes, “but it has already been 3 years since the start of the first contract, and waste in Moscow is still burned and buried”.

“The contracts have been closed with the primary goal of collecting the budget money, and technology development, and improvement of the urban environment will only remain on paper. This is evidenced by the unfulfilled conditions of government contracts for the processing of waste.”

Even if they wanted to recycle, they couldn’t because there is not infrastructure for it, Sobol argues, and she places the blame sole on Sobyanin and his cronies for being more concerned with taking what they can from the budget.

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