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A mobile hospital for COVID-19 patients established at the “Yekaterinburg-Ekspo” exhibition center, May 22, 2020

Pandemic money Investigative journalists at ‘Proekt’ calculate who won big and came up short in Russia’s coronavirus government contracts

Source: Proekt
A mobile hospital for COVID-19 patients established at the “Yekaterinburg-Ekspo” exhibition center, May 22, 2020
A mobile hospital for COVID-19 patients established at the “Yekaterinburg-Ekspo” exhibition center, May 22, 2020
Donat Sorokin / TASS / Scanpix / LETA

The Russian state spent 210 billion rubles ($2.9 billion) to procure the goods and services needed to contain the spread of coronavirus, estimates the investigative news website Proekt. Reporters analyzed 90,000 government contracts concluded between March and June 2020. This amount of spending was 88 billion rubles ($1.2 billion) greater than the federal subsidies issued to state agencies and regions charged with implementing Russia’s efforts against COVID-19.

Among Russia’s federal agencies, the Industry and Trade Ministry received the most in subsidies — 18.7 billion rubles ($257.9 million). The Defense Ministry finished in second place with 13.4 billion rubles ($184.8 million), followed by Russia’s consumer health watchdog with 5 billion rubles ($69 million), the Presidential Administrative Directorate with 2.9 billion rubles ($40 million), the Federal Penitentiary Service with 2.5 billion rubles ($34.5 million), and the Health Ministry with 2.4 billion rubles ($33.1 million). Proekt points out that the Russian state allocated less money to fighting coronavirus among the country’s 500,000 prison inmates and 296,000 prison workers than it did on protecting a few thousand people attached to 10 hospitals and outpatient clinics managed by the Presidential Administrative Directorate. 

Regional governments also received 65.5 billion rubles ($903.3 million) to curb the spread of coronavirus. This wasn’t enough money and some regions had to use funds already allocated to budget items like renovations for children’s art schools and surveys of forest areas. Unlike other parts of the country, Moscow paid for its own epidemiological efforts against COVID-19, receiving no federal subsidies. Mayor Sergey Sobyanin says the city has spent roughly 250 billion rubles ($3.5 billion) to fight coronavirus. 

More than a fifth of the Russian state’s coronavirus contracts were classified. These agreements were reached with the Defense Ministry, the Interior Ministry, and the Presidential Administrative Directorate. Moscow also obscured its spending, awarding strangely named contracts to confusing chains of suppliers established by the city’s government. Using open sources, Proekt determined that state contractors spent most of the money on medical equipment and other products (61 percent of all coronavirus contracts), as well as protective equipment and repair and construction work on hospitals and observation facilities (each about 10 percent). 

Spending on drugs between March and June amounted to 5 percent of all the money allocated in the contracts discovered by Proekt. The top-three wholesale purchases were the anticoagulant “Enoxaparin” (1.1 billion rubles, or $15.2 million), another anticoagulant called “Nadroparin” (800 million rubles, or $11 million), and the immunosuppressant “Tocilizumab” (900 million rubles, or $12.4 million). In retail sales, the most popular medicine in Russia became the anti-flu treatment “Arbidol.” Since the start of the coronavirus pandemic, Russian consumers have spent 3.3 billion rubles ($45.5 million) on this drug — five times more than during March and June in 2019. At the same time, Russia’s Federal Antimonopoly Service has prohibited advertisements that depict Arbidol as a treatment for COVID-19.

“Rostec” has earned more on coronavirus contracts than any other Russian company: 21 billion rubles ($289.1 million). The money was for supplying ventilators and thermometers. Second place went to the “Delrus” Group, founded by Yulai Magadeyev and Arkady Guzovsky. Delrus earned 4.4 billion rubles ($60.5 million) on sales of masks and other medical products. In third place was Rustem Safiullin’s construction company, “Altyn Group,” which received 2.9 billion rubles ($40 million) to repair and build medical facilities in Tatarstan (most of these contracts were awarded without competing bids). Several other enterprises were awarded hefty government deals, as well. For example, the company “Forpost” doesn’t even have a telephone line, but it won a contract for 1.6 billion rubles ($22 million) to repair hospitals and outpatient clinics in Moscow. 

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Summary by Olga Korelina

Translation by Kevin Rothrock