Prosecutors close Rotterdam plus case

The Specialized Anti-Corruption Prosecutor’s Office
(SAP) decided on Aug. 27 to close the investigation into the so-called
“Rotterdam plus” case, media reported the same day. In this case, the National
Anticorruption Bureau of Ukraine (NABU) investigated a possible conspiracy
regarding the power sector regulator’s methodology, approved in March 2016, to
calculate the forecasted electricity price produced by thermal power plants
(TPPs). Based on that methodology, the electricity price covered coal costs as
if all the coal burned by Ukrainian TPPs was delivered from the ports of
Amsterdam-Rotterdam-Antwerp, while in fact most of the coal burned was mined in
Ukraine or delivered from Russia.

A year ago, NABU declared four power regulator
officials and four employees from the leading electricity company DTEK as suspects in a conspiracy
that led to the introduction of the “Rotterdam plus” regulation. According to
NABU, this regulation inflicted UAH 18.9 bln in losses to Ukrainian consumers
of electricity in 2016-2017. According to a SAP statement of Aug. 27, the
investigation failed to provide sufficient evidence that the suspects committed
any crime.

The key factor that moved the case to a dead end was
the results of an expertise that was to provide calculations of damages made by
the Rotterdam plus approach. In mid-August experts from Ukraine’s State
Security Service concluded that damages to the state from this regulation are
impossible to calculate, according to censor.net news site.

DTEK welcomed SAP’s decision in its Aug. 28 press
release, also stating it “is considering the possibility of judicial protection
of the reputation of the company and its employees, who were unjustifiably
prosecuted.”

In its turn, NABU stated on Aug. 28 that SAP’s
decision to close the case “contradicts the principles of the rule of law” and
promised to appeal against this decision to the Prosecutor General and acting
Specialized Anti-Corruption Prosecutor.

Alexander Paraschiy: As we expected a year ago, proving
losses in the Rotterdam plus case has become an impossible task for Ukraine’s
power brokers. Such a task would have required both enormous intellectual work
and political will to complete the case, with both factors seeming to be
lacking in the entourage of the Ukrainian president (recall, the SBU is led by
president Zelensky’s friend Ivan Bakanov). Taking into account possible
political factors in this case, it is too naïve to expect that NABU’s appeal to
another friend of Zelensky, the Prosecutor General, will be able to get the
case restored. All in all, this looks like an ultimate victory for DTEK in this
case, with some tiny chance that this story will go on. This won’t have any
effect on the reputation of DTEK Energy (DTEKUA), the key beneficiary of the
Rotterdam plus initiative, nor will it have any effect on its fundamentals.