Russia strikes back at tight-fisted cosmodrome builders

A Russian contractor involved in building the Vostochny Cosmodrome has been accused of embezzling nearly a million dollars just a month after deputy prime minister Dmitry Rogozin promised to "rip heads off" embezzlers and saboteurs on the troubled project.

Prosecutors have also launched proceedings against the leadership of several other contractors over their failure to pay workers after an inspection of Russia’s new spaceport by the country’s Prosecutor General’s Office, which claimed this week to have uncovered many labour law violations at the site in Russia’s Far East.

Workers at Russia’s most important construction project spent part of Easter on hunger strike in protest over unpaid wages, prompting an urgent intervention by Russian deputy prime minister Dmitry Rogozin.

Following the prosecutors’ inspection, around 170 individuals have been disciplined or fined, and 1,300 workers who together were owed over 25 million rubles ($495,000) have been paid, reports Russian Legal Information Agency (RAPSI).

One of the reasons behind the problem is the inefficient monitoring of subsidiaries and subcontractors by (state-linked) Dalspetsstroy– Russian prosecutors

Earlier this month CEO of contractor Stroyindustriya-S, Sergei Terentyev, was detained over salary delays. Investigators claim that he knew the company had the funds to pay but intentionally withheld them. The amount owed was estimated to have exceeded 14 million rubles ($260,000).

Teachers and factory workers are reported to be striking elsewhere in Russia over unpaid wages, as sanctions and low oil prices constrain the economy.

Today RAPSI reports that an unnamed contractor working at Vostochny is suspected of embezzling $940,000 after an inspection revealed that the contractor received an advance payment of of the same amount but did not do the work.

The prosecutor’s office has also issued a warning to Vitaly Leonov, acting director general of TMK (Pacific Bridge Building Company) where wage arrears for January-March 2015 exceeded 111 million rubles ($2.2m).

RAPSI reported that administrative proceedings will also be launched against the management of other companies that have not paid wages, including Yevgeny Orlov, director of the company Sistemy i Seti (Systems and Grids) and Fyodor Khadzhioglo, director of StroyServisRemont. 

Administrative proceedings against local construction engineering company RegionStroyEngineering have also begun.

"One of the reasons behind the problem is the inefficient monitoring of subsidiaries and subcontractors by Dalspetsstroy," the state-linked company that is managing the construction of the spaceport, according to prosecutors. 

Prosecutors said Dalspetsstroy hired "subcontractors that had outstanding debts and did not have the necessary material resources and equipment".

Tension has been steadily mounting at the Vostochny site in the Amur Region, with deputy prime minister Rogozin threatening to "rip heads off" if sabotage or embezzlement is discovered.

President Vladimir Putin has set a strict deadline for the spaceport to be complete by the end of 2018.

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