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Is there a future for former industrial giants?

Because of inefficient management and abuses, a number of state-owned enterprises across the country are on the verge of collapse. The factories that were the leaders of production and growth are now standing idle. People do not get their salaries for months. Although the capacities of enterprises are enough to provide the state with extremely necessary products. Obviously, there is no political will.

I will give you examples of three Kharkiv giants, which really have all the prerequisites for making profit and providing jobs for Kharkiv citizens. Instead, they are either unprofitable, or extremely inefficient, and most employees are fired. Those that remain receive either meager salaries or do not receive their salaries for several months.

STATE ENTERPRISE “ELEKTROVAZHMASH”

The plant is a manufacturer of turbogenerators, hydro generators, components for urban and railway electric transport. The enterprise cooperates with companies from many countries of the world; despite this, the plant has obsolete equipment and no investments.

Foreign buyers often have no direct access to the manufacturer and can only buy products through intermediaries. The income from these operations goes to offshore accounts, filling the budgets of other countries.

It is estimated that more than half of the export is done through indirect contracts. The situation in procurement is no different: there are grounds to believe that they are carried out through newly established intermediary companies at inflated prices. It is clear that as a result of this the prime cost of production is growing, while the plant is losing markets and contracts.

STATE ENTERPRISE “KHARKIV TRANSPORT EQUIPMENT PLANT”

The plant is a part of the notorious “Ukroboronprom”. It developed BTR-3E, BTR-4E, and other projects for the defence industry.

But just think about it: today, in the time of war with Russia, when we need new weapons and military equipment so much, the plant is actually standing idle.

The enterprise is being brought to bankruptcy in the interests of some individuals. In 2004, a gradual privatization of the plant began, and now out of 7,000 employees who used to work there, only 50 people remained. 80% of the property was sold for a song to one private company.

MALYSHEV PLANT

Kharkiv Malyshev Plant produces unique military products: heavy and light armored vehicles, engines for them, spare parts and components, railway engines and the like. Despite such unique specialization, the enterprise does not have much work. Meanwhile, the state addresses other enterprises that do not have the necessary specialization to make orders.

Is it not obvious that in terms of logistics Kharkiv Malyshev plant is the nearest one to the line of contact? And again, there is the issue of jobs.

Last plenary week, the parliament passed a law on the privatization of state property. Taking into account the given examples and knowing that cases like this exist all over the country, we are once again convinced – the state is not always an effective owner.

I believe that the enterprises which are non-strategic for the country should be sold to authoritative businesses that would be interested in their profitability and development, and this will mean jobs for Ukrainians and taxes to the budget.

And with regard to Ukroboronprom, it is necessary to conduct a thorough audit and, finally, disband this “corruption giant”. The huge enterprise, which today delivers the necessary provision to the front, must have effective management, and taxpayers must have the opportunity to monitor that their money is spent in the right direction.

As for the Kharkiv enterprises. I have reported about the facts of abuse of which I managed to learn to the regional prosecutor’s office demanding their verification. I have also formally appealed to the government of the country and personally to the prime minister with a demand to take this matter under his control and establish order in these enterprises.

Roman Semenuha
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