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Ex-infrastructure agency head denies accusations of misusing Western funds

by Chris York July 5, 2024 9:41 PM 3 min read
Mustafa Nayyem, the former head of Ukraine's agency for Restoration and Infrastructure Development in a photo on June 28, 2020. (Mustafa Nayyem/Facebook)
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Editor's Note: Following publication, the Kyiv Independent contacted the EU Delegation to Ukraine to comment on the issue.

Mustafa Nayyem, who previously headed a state infrastructure agency, on July 5 denied the accusations that the agency had misused foreign partners' funds.

Ukraine's Finance Ministry accused the agency of misusing Western funds in a response to Ukrainian online newspaper Ekonomichna Pravda published earlier on July 5. Specifically, the ministry claimed that the EU Delegation to Ukraine was unhappy with the agency failing to use 150 million euros allocated by the European Commission.

Nayyem's resignation from the agency in June and other firings and reshuffles strained relations between Kyiv and Western allies and raised concerns about how Ukraine can deal with fixing the country's energy infrastructure as it comes under repeated attacks by Russia, the Financial Times (FT) reported on June 10, citing unnamed Ukrainian and Western officials.

Nayyem, a former investigative journalist, became a reformist MP and anti-corruption activist in 2014. He was a deputy infrastructure minister from 2021 to 2024 and head of the Agency for the Restoration and Development of Infrastructure from 2023 to 2024. The agency was created to spend Western donors' funds on rebuilding infrastructure destroyed as a result of the war.

The Finance Ministry claimed that the agency "does not carry out its functions on a regular basis."

"The Ministry of Finance went public with a number of strange comments," Nayyem told Ekonomichna Pravda.

"Since this is the official position of the state body, which has manipulated facts and figures and called into question the work of the agency's entire team, I consider it necessary to provide an explanation."

According to Nayyem, the Finance Ministry said the agency had received UAH 7.8 billion ($192.3 million) but was yet to spend any of the money.

Nayyem said, however, that there was a mistake in the figures, and the total amount of money being discussed was actually UAH 7.6 billion ($187.4 million).

"I am a bit surprised by the Finance Ministry's mistake of 200 million hryvnias in the official communication regarding the funds of international financial institutions," he said.

Nayyem said the funds had been given for the repair of roads and tender procedures were underway and that regular updates had been given to the Finance Ministry about the status of the projects.

He also said the agency was accused of failing to give the go ahead for a water supply project in the Mykolaiv region, but insisted it was actually stopped by the Finance Ministry.

"Finance Minister Serhiy Marchenko personally voiced this refusal in the presence of Prime Minister Denys Shmyhal, Mykolaiv Region Governor Vitaly Kim and Mykolaiv Mayor Oleksandr Senkevich," he said.

Nayyem also said the agency faced an exodus of staff when wages were drastically cut in January.

"As a result, the agency has lost a third of its team since the beginning of the year –people simply left," he said.

Hitting back at the Finance Ministry, he then went on to say it was stalling on major decisions itself and had yet to give the go ahead for a number of infrastructure projects.

"Almost a month has passed," he said, adding: "I would like to inform you that the situation has not changed at this moment – no decisions have been made, construction continues to stand still in the height of the season, residents do not receive services, and construction companies are bankrupt."

Nayyem resigned as head of the Agency for the Restoration and Development of Infrastructure on June 10 after being prevented from attending the upcoming Ukraine Recovery Conference scheduled for June 11-12 in Berlin.

In a lengthy post on Facebook, Nayyem named a series of complaints about the "systemic obstacles" that had limited his ability to do his job, ultimately leading to his decision to resign.

FT: Government shake-up straining relations between Kyiv and Western allies
A series of government firings, resignations and reshuffles have strained relations between Kyiv and Western allies and raised concerns about how Ukraine can deal with fixing the country’s energy infrastructure as it comes under repeated attacks by Russia, the Financial Times (FT) reported on June 1…

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