In Ukraine, no way to avoid a bumpy ride

Tue May 21, 2013 9:55am EDT
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By Olzhas Auyezov

KIEV (Reuters) - As the snow and ice began to melt in Ukraine this spring, exposing fresh cracks and potholes in the roads, hundreds of motorists gathered outside a government building carrying unusual burdens.

They laid them down like funeral wreaths -- torn-off bumpers, crushed shock absorbers and ruptured tires -- demanding those inside the building, the state roads agency, carry out urgent road repairs and threatening to sue them for damages.

In many ways, the problems with Ukraine's roads encapsulate the country's political and economic dilemmas more than two decades after the collapse of the Soviet Union.

Most drivers blame the government for the fact that potholes and crumbling asphalt mean they either have to endure incessant jolts and regular damage by steering straight over them, or zig-zag around them, with perilous consequences.

In fact, the government does spend on the roads. Like the heavily subsidized energy and utilities sectors, Ukraine's state-run road network drains billions of dollars a year.

But most is swallowed up by corruption, mis-spending and short-term repairs, leaving the authorities with the choice of raising taxes to cover the soaring costs or cracking down.

It is just one of several tough decisions the government needs to make to avoid a debt trap, but it is refusing to countenance for fear of losing popularity. State debt rose to $67.4 billion this March from $60.5 billion a year earlier.

"All the government efficiency issues manifest themselves in the road sector," said Mark Magaletsky, senior banker in charge of Ukrainian infrastructure and energy at the European Bank for Reconstruction and Development.   Continued...

Cars drive over a pothole along a road near Kiev May 16, 2013. REUTERS/Gleb Garanich