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Corruption in Russia: Putin's space project for pets Vostochny is hit by massive theft



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Launch of the Soyuz Rocket at the Oriental Space Station (July 5, 1
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The new Russian Vostochny Space Center has lost at least 11 billion rubles (133 million pounds; $ 172 million) through theft, and senior officials are imprisoned.

So, what went wrong with President Vladimir Putin's home project?

The Federal Investigation Committee of Russia (SC) says that this megaproject deals with 12 more criminal theft cases that Mr. Putin sees as a strategic priority for Russia because of its huge trade potential.

The longest jail term so far was 11 and a half years for Yuri Hrizman, a former chief of state-owned construction company Dalspecstroy.

Prof. Mark Galeotti, a Russian expert at the Royal United Services Institute (Russi), told the BBC the Vostochny scandal underscored the scale of corruption in Putin's huge state bureaucracy.

"How can you deal with it without declaring war on your own elite? He is not ready to do so. This dependence on megaprojects almost invariably creates massive opportunities for appropriation, "said Mr. Galeotti.

Why is Vostochny so important to Russia?

Vostochny was the first Russian-designed civilian launch site. took place in April 2016. There have been four more since then.

The huge new site is in the far east of Russia, far from major cities, reducing the risk of rocket waste from being hit in every major city center. a base called Svobodny.

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Media caption Russia launches first rocket from its new Oriental Space Station

Space missions are a matter of national pride for Russia: in the end it was the Soviet Union that sent the first Space Person – Yuri Gagarin – In 1961

Visiting the Eastern in September, Mr Putin told space officials: "This is the country's most important construction project of national importance. "

At present, Vostochny's total value is 300 billion rubles (3.6 billion pounds; $ 4.7 billion), according to Russian agency RIA Novosti. But the project is reinforced by cost overruns and delays.

The development of the East is also a major political move, as Russia has relied on the Soviet-era Baikonur spaceport so far for international space missions, Kazakhstan is a close neighbor, but having a main Russian launch facility is safer for Moscow in the long run.

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Vostochny is also located in a poorly developed region with high levels of poverty, so the center can help the local economy.

[19659013] In early 2015, a group of construction workers at the site went on a hunger strike, claiming they were owed wages after the bankruptcy of the subcontractor.

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In the new space port of Russia

When plans anoto first rocket launch was delayed in 2015 – this happens next year – Mr. Putin ordered the SC to research how to manage Vostochny.

On Sunday, the SC reported that 58 employees involved in the project were convicted of fraud and abuse of office.

The theft of Chrysman alone costs the state 5.2 billion rubles. He and several other construction executives were jailed in February 2018.

His son Michael was in prison for five and a half years.

Former Chief Accountant of Dalspetsstroy Vladimir Ashimmin received seven years. Former President of the Khabarovsk Regional Assembly Viktor Chudov is six years old.

Read more about Russia's space program:

Despite the scandal, Vostochny is still led by Dmitry Rogozin, head of the state space agency Roscosmos.

Mr Rogozin is close to Mr Putin but is not in the inner circle of the president's top aides, Prof. Galeotti told the BBC.

"Stealing hundreds of millions"

At a government meeting on November 11, Mr Putin spoke angrily about ongoing corruption in the East.

"Hundreds of times they have been told, 'Work transparently.' But not! They are stealing hundreds of millions, "said Mr Putin.

His spokesman, Dmitry Peskov, later explained that the outburst targeted former – not current – project managers. He said that 11 billion rubles had been stolen. 3.5 billion were recovered later.

Lack of financial transparency is a major problem of this and other major government projects in Russia, Prof. Galeotti said.

"President Putin would like Vostochny to be demonstratively global, he looks for success stories, but even that is not enough to handle the test Emmitt system. He does not want to really modernize the foundations of the system. "

He said the problems were reminiscent of Soviet-era white elephant projects known for wasted resources.

Other countries, including the US and China, continue to be eager to do business with Roscosmos, appreciating his space experience. But new space players, such as Elon Musk's Spaceon, are already challenging Russia's competitive advantage.


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