30 October 2024, 10:41
Amid growing interest in drones in Ukraine and an expanded state budget for military UAVs in 2024, journalists from Hromadske have released an investigation shedding light on procurement practices involving drones through the State Special Communications Service (SSCS).
The report highlights suspicious contracts and accusations of inflated prices, which allegedly resulted in profits of up to 600 million UAH for Digital Transformation Minister Mykhailo Fedorov. This article examines the key findings of the investigation, the role of supplier companies, and the potential implications for state procurement.
Key Facts and Allegations
The Hromadske investigation revealed that government drone purchases were conducted through a company named Kryon-M, previously known for selling carpets. This raises questions about the competency and credibility of the supplier chosen for a key national defense program. According to the investigation, the drones procured by the SSCS through Kryon-M were significantly overpriced, enabling certain individuals to profit substantially from the deal.
Mykhailo Fedorov’s Position and the SSCS’s Role
Mykhailo Fedorov has denied any knowledge of inflated drone prices and distanced himself from the decision to select the supplier. Additionally, the former head of the SSCS also denied involvement in the procurement process, pointing to systemic weaknesses in oversight and transparency regarding the use of public funds.
Law Enforcement and NABU’s Actions
Given the scale of the alleged violations, Ukraine’s National Anti-Corruption Bureau (NABU) launched an investigation into the inflated prices of drones purchased from Kryon-M. A criminal case was opened in January 2024, but despite public outcry and the severity of the allegations, no charges have been filed against the deal’s participants. The delay in the investigation has raised concerns among the public and experts, as defense-related procurements, such as drones, require more timely and transparent oversight.
Rising Drone Budgets and Misuse Risks
Amid the ongoing war and the strategic importance of UAVs, the Ukrainian government allocated 48 billion UAH in 2024 for the "Army of Drones" program, implemented through the SSCS. Given past price inflations and questionable contracts, concerns have arisen about how effectively and transparently this substantial budget will be managed. Experts and activists warn that if procurement oversight remains inadequate, the misappropriation of funds could continue.
Conclusion
The drone procurement controversy underscores the critical need for transparent and competitive mechanisms in state contracting, particularly in the defense sector. Despite the initiation of a criminal investigation, the lack of clarity and the slow pace of law enforcement actions raise fears that procurement abuses may persist. With growing demand for UAVs and increased budgets for their acquisition, the government and law enforcement agencies must enhance oversight and accountability to ensure the effective and appropriate use of public funds.