During the visit of Prime Minister Mykola Azarov to Mykolayiv city the workers of the SE “Shipyard named after 61 Communards” gave him the following documents: submission letters, documentary reports on metal theft and other violations, and they also required to take measures to pay current wage debts and backlog of debts. Head of the Government Mykola Azarov promised to solve this problem and at the meeting of the Cabinet of Ministers which was held the following day after his visit to Mykolayiv city Mykola Azarov said, “It is hard to express how pity and shame it was to realize that Mykolayiv shipyards which built ships and vessels being the pride of many fleets in the world are hardly survive”. Mykolayiv citizens feel hurt that our oldest shipyard, having initiated the construction of Mykolayiv city 223 years ago, has only a historical value now. Certainly, problems of the “Shipyard named after 61 Communards” were accumulating for years but in spring 2012 it seemed the decision was partly found. During the session of the Regional Council it was announced that apartoftheshipyardwillbe purchased by a well-known Ukrainian and Mykolayiv investor – “NIBULON” which announced about its shipbuilding ambitions, constructs its own fleet and attempts to revive navigation on the main rivers of Ukraine. The citizens were glad: if “NIBULON” starts doing something, then the result will appear. But an agreement was not reached. Governor Mykola Kruglov blamed Oleksiy Vadaturskyy, “NIBULON’s” general director, for being dishonest. M. Kruglov made O.Vadaturskyy responsible for breaking an agreement. Oleksiy Vadaturskyy kept silent. But after the Prime Minister’s visit and continued criticism of regional authorities against “NIBULON” he agreed to tell the reasons. – I understand the problems of  “Shipyard named after 61 Communards” and the shipbuilding situation in Mykolayiv city in whole. Really, an activity on selling a part of the shipyard on the right bank of the Ingul River has been carried out by the Regional State Administration and the shipyard administration since November 2011. The main purpose of this selling was to pay wage debts. I realized the governor’s desire to solve this problem as quickly as possible. On March 17, 2012 Mykola Kruglov asked me to participate in a tender for selling of immovable and movable property of the shipyard arrested by the State Executive Service. The received assets had to be directed to pay wage debts. I realized that in this case we would have to handle with the state – with the state property, state enterprise, state executive authorities, and state property control authorities. Consequently, the agreement should be prepared impeccably and be one hundred percent legal. Besides, we had an unsuccessful experience in purchasing facility of incomplete construction in the territory of  “Chernomorsky Shipyard” in 2002. The given agreement as in case of “Shipyard named after 61 Communards” was initiated by the regional authorities and the shipyard administration. On February 5, 2012 we made an agreement, due to our costs we paid wage debts to the workers of “Chernomorsky Shipyard”, whereupon authorities left us face-to-face with those who had an eye on a leader of Ukrainian shipbuilding, but “NIBULON’s” development on the basis of the purchased unfinished quay did not enter into their interests. Without delay we were subjected to numerous inspections, including by public prosecution bodies and interagency government commissions. We received tens of claims and thousands of court sessions until we proved the legitimacy of this agreement. We lost money and time, our investment activity was blocked for months. We took into consideration our previous experience, thought over the governor’s proposition seriously, and studied documents scrupulously. Frankly speaking, we were disappointed by the level of pre-sales preparation of the arrested state property, and in the first place, by those state bodies that instead of preparing documentation properly demonstrated a perfunctory approach. – Oleksiy Opanasovych, what do you mean speaking about sale facility? What were you proposed to purchase? – It is mobile and immobile property, namely two cranes, separate production buildings and accommodation spaces, an area of outfitting quay, and incomplete construction of horizontal stocks – a part of the production complex (near Temvod village) which was built during the Soviet Union for reconstruction of the shipyard in order to relocate the main part of the shipyard on the right bank of the Ingul River and to modernize an outdated part of the shipyard, i.e. to demolish old facility and build a new production at this site. But what was proposed to us in fact? For example, we were proposed to purchase a power unit building without power unit itself, transformer substation, power equipment, pipelines and networks, treatment facilities located there. We were offered to purchase a “shell” without engineering systems. We were suggested to buy a building of the 8th workshop but indeed we would be co-owners of only part of the building which has the common foundation with its other part that belongs to a private company. It means that we would need an approval of our co-owner to reconstruct or modernize the building. In the guise of the whole building we were proposed only part of it and the other part belonged to another owner. By the date of the tender announcement there was not made any technical inventory of the arrested facilities, legal documents were not prepared, separate addresses for these facilities were not assigned. There were a lot of such discrepancies and differences in documentation. We actively studied these documents from March 17 to April 17. Could not they organize all necessary procedures within 5 month till tendering and prepare for it in time? Preparation for selling was not carried out. Besides, the main part of the proposed facilities was related to an integral property complex of the strategic state enterprise which is not subject to privatization. Selling of these facilities was not only impossible but also it would be illegal. – Does it mean that if you made an agreement it would be illegal? – Yes it does, a purchaser’s rights would be completely unprotected and a purchaser could be considered as dishonest one. – What was the preliminary price for these facilities? – The starting price for arrested property was about UAH 40 mln. – How many assets should be invested to organize shipbuilding there? – It was easier to start construction on a waste area. I mean to demolish old facilities constructed ten years ago. We know at first hand that to reconstruct old and destroyed things is more difficult and expensive than to construct from the very beginning. – What did you do when you were sure that those proposed in public and specified in documentation were completely different things? – The situation was similar to those one when we purchased the facility of incomplete construction at “Chernomorsky Shipyard”: our prospective property turned out to be in the center of the shipyard, there were no separate communications, separate approaches-entrances. There was even no free access to a quay and stocks by water – a water area of quay was a part of the state enterprise water area. We had to solve questions on access roads, separate entrance, etc. Otherwise the new enterprise could not operate. Besides, those area proposed for repurchase (about 7 ha) was too small to construct a shipbuilding company there. In order to create new technological shipbuilding facilities of full technological cycle there are required at least about 15 ha. We paid attention at once that in the list of proposed facilities there were buildings and structures that had been already taken out of service because of their complete wear. Therefore, it was impossible to consider them as a base for modernization. Nevertheless, we considered this variant seriously, our specialists and shipbuilding consultants examined the proposed complex carefully. We informed the shipyard administration and the Regional State Administration that it was necessary to pay not only wage debts but also debts to the Pension fund and make other social payments in order workers to receive not only their wage but also a pension to be calculated for that period. We suggested considering a question on selling of a number of adjacent buildings and structures which were not used in the production activity of the shipyard. We were told to purchase the proposed complex firstly and then maybe later they will discuss our proposition. But we would like to know, for example, the price for the land plot under this facility. We made an enquiry to Mykolayiv Regional Chamber of Commerce and Industry headed by former Deputy Head of Mykolayiv Regional State Administration Igor Katvalyuk. We were reported that the estimated value of this plot – UAH 100-150 per square meter. But this land price is not for an industrial facility, it is a price for a commercial activity. (We remind you that in March 2012 the deputies of Mykolayiv City Council voted for selling of city land under the supermarket “Velyka Kyshenya” at the price of UAH 100. 05 per 1 sq.meter). We could purchase this facility of incomplete construction and the outfitting quay but we could not moor vessels to make repair and completion there, because lands of inventory of water recourses and water area would belong to “Shipyard named after 61communards”. We would have an access to our facility neither by water nor by land. We saw all these problems and required to ensure valid documentation including written approval of the State Concern “Ukroboronprom” and formal concurrence of the State Property Fund of Ukraine concerning selling of immobile property. “Ukroboronprom” sent a letter to the shipyard when the terms of filing of an application were expired. The tender was announced on April 20, the last day to file an application was April 16, the last licensing letter from “Ukroboronprom” was dated April 17. An approval of the State Property Fund, explicitly provided by the Article 75 of the Commercial code, was not received. Let us imagine that a certain facility, seller, and purchaser are participants of an agreement. Under these circumstances none of reasonable, informed and cautious purchasers would stake their money and make such an agreement which legality gave rise to doubt and could be disputed and considered to be illegal at any moment. We declared initially either the agreement will be absolutely transparent and legal or we will not participate. When the governor says the set of documents was prepared urgently, people engaged in preparation worked 24 hours a day I believe him and can confirm it. Unfortunately, by April 2012 the time has been lost irrevocably. If the documents were prepared within 5 previous months, everything could be decided differently. I realize that he sincerely wanted all the documents to be in order. It means that his subordinates did not manage to cope with this task. Either unintentionally – because of their inattention, ignorance, or not in time and not thoroughly the subordinates informed their manager that deluded him. For example, it was a well-known fact that in November 2011 the Cabinet of Ministers initiated a draft law “On amendments to some laws of Ukraine concerning improvement of control of state property facilities” that prohibited to alienate, remove, and sale immobile property of state enterprises which are not subject to privatization. And the State Enterprise “Shipyard named after 61 Communards” was in this list. This law was adopted at the second reading by the Parliament, taking into account all propositions of the President of Ukraine, on March 13, 2012. We would like to remind you that “NIBULON” was proposed to purchase this facility on March 17. We were suggested to participate in an agreement which was prohibited by the law. I also want to mention that the draft law was also prepared by the central bodies of executive authority which are responsible for payment of wage debts. They all ignored the existing situation and left Mykolayiv Regional State Administration face to face with problems on payment of wage debts. Having received letters from several ministers and agencies we realized the new law prohibits selling of immobile property of “Shipyard named after 61 Communards”. On April 3 the law was signed by the President and published in the official body “Voice of Ukraine” (newspaper) of the Verkhovna Rada (the Parliament) and came into effect since April 8. The tender for selling of immobile property of the shipyard was assigned on April 20. I suppose the governor might not know about it but his subordinates who were engaged in preparation and inspection of pre-sales documents must know about it. And this law, prohibiting any agreements as to immobile property of state enterprises which are not subject to privatization, establishes the legal liability of not only sellers but also purchasers trying to conclude such an agreement. Besides, “Ukroboronprom” that had to give its written confirmation on disposal of property of “Shipyard named after 61 Communards” did not provide clear explanation, its answer was ambiguous and not concrete. And the State Property Fund of Ukraine did not answer in due time and later it referred to the Law adopted by the Verkhovna Rada that prohibits any operations with property of state enterprises which are not subject to privatization. If we made an agreement we would be subjected to the prosecutor’s check, then the public prosecution bodies would initiate an actionable examination and till the judicial verdict came into force we could not build vessels and invest in shipbuilding. Besides, under threat there could be other investment projects of our company being financed by the leading European financial institutions for which transparency and legacy of business is the main principle for crediting. – Did you carry on parallel negotiations to purchase the shipyard “Lyman”? – Firstly, we carried on negotiations with the shipyard “Metalyst” located in the territory of “Shipyard named after 61 Communards” that has autonomous passageways. If we purchased property of the shipyard “Metallist” it would be possible to locate shipbuilding production there. After it became obvious that the tender for purchasing of arrested property of “Shipyard named after 61 Communards” was not held we stopped negotiating with the shipyard “Metallist”, and our specialists started to search for other areas where it will be possible to place the shipping orders in Europe, and also they studied the possibility to purchase shipbuilding facilities in Europe. Returning to the subject of the shipyard “Lyman” I would like to ask where you got information about our intention to purchase “Lyman” instead but not besides the facility at “Shipyard named after 61 Communards”? We declared about our intention to build fleet which is very necessary for our company. We really want to revive river navigation along inner waterways of Ukraine, first of all, along the Dnipro and the Southern Bug rivers, to reconstruct logistics of our company in order to use waterways of Ukraine maximally. These are not just insignificant words. But we are realists and we realized in case of purchasing outfitting quay at “Shipyard named after 61 Communards” our first vessel will be constructed so far away. In reality, at this site it was necessary to build shipbuilding production from the start. We could not wait for a long time that is why we were studying the possibility to use production facilities of the shipyard “Lyman” to solve current tasks on repair and maintenance of our existing fleet but we were ready to purchase both “Lyman” shipyard and a part of “Shipyard named after 61 Communards” on the right bank of the Ingul river. And we would purchase both these facilities if it was permitted by the law. Besides, we did not connect these two agreements and considered them as two independent projects being in a short-and middle term prospect respectively. Both official and documentary actions on purchasing “Lyman” were held only after the supposed agreement as to “Shipyard named after 61 Communards”. An official first letter-request to receive input data as to “Lyman” shipyard was sent by “NIBULON” only on April 20 when it was clear that the tender did not take place that day. We made an agreement on purchasing property of “Lyman” shipyard legally only on August 15. It is a pity to hear an undeserved criticism against us. I walk along Mykolayiv streets, meet a lot of familiar and unfamiliar people. They asked me why we did not purchase a facility in the territory of “Shipyard named after 61 Communards”. I tell them the reason. I being a citizen, patriot of our city, and territorial community, a businessman, and a manager of the large agrarian company can not be responsible for this situation with wage debts. 5 months have been passed since then but I still do not see any persons who desire to purchase the shipyard. If it was possible other variants would be found. Nobody and nothing prevented the shipyard administration and the government to engage as many participants as possible to participate in the tender that would ensure a price growth of state property and allow to pay wage debts completely. But nothing was done and old problems of the shipyard could not be solved by putting pressure on “NIBULON”. That i