Share of MoD’s problematic receivables stands at 2.7% - minister

That’s according to Defense Minister Oleksii Reznikov, who spoke in an interview with Ukrinform.

"Using the legal procedures during martial law, under a shortened procedure, we signed contracts with everyone and for everything we needed. Of course, the suppliers were different, and we didn't have time to check them either. But if you count the entire volume of various purchases – for Ukrainian hryvnias or for foreign currency purchased for the Ukrainian market – the share of problematic receivables is only 2.7%. What I mean by problematic – they are in courts," said Reznikov.

He explained that it was about undelivered or untimely delivered goods, or poor quality goods that needed to be replaced. "Or they say: we will deliver, but we ask to postpone the deadline because a third-country manufacturer did not give us a license, etc. Or these are Ukrainian companies that have not purchased some components or have not managed to produce the products we ordered from them," noted the minister.

According to him, there are hundreds of lawsuits regarding such cases. "But, not only that, but the 2.7% I mentioned, you'll laugh, probably includes several billion more, which is the inheritance I inherited from previous years. In other words, there are debtors, primarily Ukrainian contractors, who have not fulfilled their obligations, and we are in court with them, which were started before me, and we are just supporting them. This is included in the 2.7% of bad debtors," said Reznikov.

He also emphasized that every month, MoU has a receivable, which is “live.” “For example, the Ministry of Defense has tens of billions of hryvnias paid to serious, reputable manufacturers, but the delivery will be in 2024 or 2025. If they were not paid now, they would not be able to implement the missile program, the anti-missile program. These are our respected companies, like Luch, for example, which makes Neptunes,” Reznikov explained.

As reported with reference to the Ministry of Defense of Ukraine, from January 1, 2022 to July 1, 2023, the total amount of financing of contracts for which receivables could arise as a result of advance payment was over UAH 508.1 billion. In particular, in 2023, an advance payment of over UAH 154.3 billion was made.

As of July 1, 2023, the total amount of receivables according to centralized calculations amounted to over UAH 159.7. This amount, in particular, includes long-term contracts with Ukrainian manufacturers worth more than UAH 37 billion, the terms of which expire in 2024-2025, as well as more than UAH 3 billion of overdue debt, which was formed before November 1, 2021.