73% OF THE AVERAGE MONTHLY SALARY EVERY UKRAINIAN WORKER WILL PAY FOR ROAD IMPROVEMENT PROJECTS, WHICH ARE CARRIED OUT ON IFO FUNDS

02.09.2016

Credit funds appropriated by international financial organizations for the roads construction in Ukraine are the part of the salary of each Ukrainian worker who pay taxes in a fair way. And accordingly, every centimeter of road, from the CoST projects, was built (or is planning to be built) for taxpayers’ money. Taking into account the total amount of loans for all projects between Ukraine and international financial organizations (IFOs) and also the number of Ukrainian workers, we can approximately calculate that 73% of monthly salary every taxpayer will give to repay borrowed international loans for construction / reconstruction of roads.

So the latest projects between Ukraine and international financial organizations are:

  1. “Road Improvement & Traffic Safety Project”. In accordance with the credit contract between Ukraine and the International Bank for Reconstruction and Development, dated April 21, 2009, there was provided a 400 mln EUR USD loan: http://zakon3.rada.gov.ua/laws/show/996_067
  2. “The Second Project on Improvement of Automobile Roads and Traffic Safety”. In correspondence with the loan contract between Ukraine and the International Bank for Reconstruction and Developmentdated October 11, 2012, Ukraine obtain 450 mln USD credit.
  3. “Improving the Transport and Operating Condition of Roads on the Approaches to the City of Kyiv Project (European Roads in Ukraine II)”. In accordance with the credit contract between Ukraine and the European Investment Bank there were allocated 450 mln EUR: http://zakon3.rada.gov.ua/laws/show/971_006
  4. “Improving the Transport and Operating Condition of Roads on the Approaches to the City of Kyiv Project (Pan-European Corridors)”. In accordance with the credit contract between Ukraine and the European Bank for Reconstruction and Development dated May 27, 2011, there was provided a 540 mln EUR loan: http://zakon3.rada.gov.ua/laws/show/971_006
  5. “Road Sector Development Project”. In correspondence with the loan contract between Ukraine and the International Bank for Reconstruction and Developmentdated November 19, 2015, Ukraine obtain 560 mln USD credit: http://www.ukravtodor.gov.ua/novini/%D1%81_ukravtodor-i-svitovii-bank-pidpisali-ugodu-pro-nadannya-poziki-u-560-milioniv-dolariv-na-rozvitok-ukrainskikh-dorig.html

According to the State Statistics Service of Ukraine at the beginning of August 2016 there are 16,054,800 people of economically active population in Ukraine. By counting the total amount of the latest IFOs loans and making some simple mathematical operations, we can summarize: 3898.3 hryvnas every Ukrainian worker will pay for repayment of the World Bank, EIB and EBRD loans within five road construction/repair projects in Ukraine over recent years. That is 73% of the average monthly salary (according to the State Statistics Service of Ukraine the average salary in June 2016 was 5337 UAH).

Interestingly, 3898.3 UAH for the average motorist are equal to:

  • 184 liters of A-95 petrol or 375 liters of LPG;
  • 49 car washes;
  • almost 8 months of garage rent for your car;
  • 19 services of tyre fitting;
  • 31l liters of engine oil or 97l liters of winter windscreen washer;
  • 38 diagnostics of running gear;
  • 4 annual motor insurances.

So, planning the family budget for a month and calculating money for rent, food, clothing and amusement, remember that some of them is your “contribution” to repair/construction of Ukrainian roads. Therefore, check, ask, elaborate how the procuring entities manage your money.

* Please note that the calculation of payments on loans per one Ukrainian worker is conditional and does not include debt service.

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