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New scandal erupts around APEC summit preparation

November 14, 2012, 11:48 UTC+3

Auditors said that 15 billion roubles allocated for the construction were spent inefficiently

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Another scandal has erupted around the preparation of Vladivostok for the Asia-Pacific Economic Cooperation (APEC) forum’s summit. On Tuesday, the Russian Audit Chamber said that most of the facilities were being built without the permission documentation, and 15 billion roubles allocated for the construction were spent inefficiently. The auditors have most of the claims to the Far Eastern Directorate of the Regional Development Ministry the work of which was supervised by former Deputy Regional Development Minister Roman Panov who is currently under arrest.

The Audit Chamber, after the RF Interior Ministry (MVD) has exposed financial irregularities committed in preparation for the APEC summit. The auditors assessed them at 15 billion roubles. A structure of the Ministry of Regional Development is among the offenders, the Vedomosti daily writes. A brief report of the Audit Chamber says that only 23 facilities have been put into operation from the total of 67, although the summit ended on September 9. The Primorsky Territory Administration has still not completed two five-star hotels and the Opera and Ballet Theatre. Most of the facilities were built without the permission documentation; none of the state customer had the expert examination conclusion and the evaluation of the cost of the construction projects.

Preparations for the summit cost 689.6 billion roubles, 264.6 billion roubles were allocated from the budget, the auditors estimated, and 15 billion roubles from the budget were spent with violations. “It’s mostly about violations, not the theft,” an officer of the Audit Chamber emphasised. The waste disposal site has not been built, the problem of the drinking water supply to the Russky Island has not been settled. One of the catamarans has not been supplied, and the contractor has not returned the advance payment of 110 million roubles.

Given the scale of the construction, corruption scandals have been expected, but before the summit end it was decided not to bring it out, notes Valery Khomyakov of the Agency of Applied and Regional Policy: “These revelations could be politically motivated – someone may be settling scores with the rivals,” he said.

The publication also reports that the first arrest has also been made: the Tverskoi Court of Moscow arrested until January 2 Deputy Minister of Regional Development Roman Panov who was in charge of preparations for the APEC summit. A criminal case under Article 159, part 4 of the RF Criminal Code (large-scale fraud) was opened over the embezzlement of budget funds. According to the Interior Ministry, the treasury lost 93.3 million roubles due to fraudulent tenders for the engineering and research- technical support of the Far Eastern University construction projects and for voluntary insurance of unfinished facilities.

The auditors are also confused over the cost of the construction of new apartments for residents of the Russky Island, the Kommersant daily writes. A total of 1.14 thousand square metres of housing worth 174.9 million roubles were built for re-settlers. The Audit Chamber believes that these houses could be built at half the price. The Audit Chamber also insists that the autonomous water supply system of the Russky Island cannot provide the island with quality drinking water.

One of the Russian government officials said that back in May First Deputy Prime Minister Igor Shuvalov who supervised the preparation of Vladivostok for the APEC summit, sent a letter to then Regional Development Minister Viktor Basargin with a request to conduct an in-house investigation against officials in charge of the work of the Far Eastern Directorate of the Regional Development Ministry who drag out the construction of the APEC summit facilities. Another federal official said that Shuvalov wrote this letter after a conclusion of the RF Prosecutor General’s Office, which stated that the Directorate factually failed to perform its functions, delaying the completion of the projects.

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