Mykolaiv is unable to make payments totalling over ₴370 million due to restrictions imposed by the Treasury

Mykolaiv is unable to make payments totalling over ₴370 million due to restrictions imposed by the Treasury. Photo: Volodymyr Nikolaychuk

In Mykolaiv, the Treasury has not been processing some payments from the city budget since mid-September. As a result, the city is unable to pay for certain works and services that have been carried out. As of 12 October, the amount of delayed payments had exceeded 370 million hryvnias.

The mayor, Oleksandr Sienkevych, told NikVesti in a comment for the article «Money is running out, payments are being delayed. What’s happening with Mykolaiv’s budget?».

According to the mayor, since 14 September, the State Treasury Service has suspended some payments from the city budget. However, the restrictions do not apply to salaries and related deductions, payments for utilities and energy supplies, social security, or catering in educational institutions.

«This situation has arisen in many cities across Ukraine. The funds are allocated in the city budget, but due to restrictions imposed by the Treasury, it is currently impossible to make certain payments,» explained Oleksandr Sienkevych.

Among the payments that are not being made are payments for passenger transport by electric transport, contributions to the authorised capital of critical infrastructure utility companies, and the settlement of arrears arising from the difference in tariffs for the production, transmission and supply of thermal energy.

The problem is not limited to Mykolaiv. According to the Association of Ukrainian Cities, since 9 September, local authorities have been facing delays in payments that fall under the government’s established order of priority for expenditure. During martial law, the Treasury makes budgetary payments in accordance with Cabinet of Ministers Resolution №590. This resolution specifies which expenditure must be paid first.

At the end of September, the government adopted a further resolution on the prioritisation of budgetary payments. This was explained by a shortage of financial resources, in particular the shortfall in international aid receipts compared to the plan. Under these circumstances, priority is given to defence, servicing the national debt, pensions, wages and social benefits.

Delays by the Treasury are already affecting construction projects in Mykolaiv. Oleksii Savchuk, Head of the Capital Construction Department, told NikVesti that, at the time of the interview, 22 certificates of completion totalling nearly 29 million hryvnias remained unpaid.

«Since 14 September, when the Treasury stopped making payments, we have accumulated nearly 30 million hryvnias in unpaid invoices. This includes both payments that were already with the Treasury at that time and those we submitted later,» said Oleksii Savchuk.

According to Oleksii Savchuk, payments for projects funded by state subsidies used to be processed within three to four days. Now, these delays are complicating the procurement of materials and equipment.

The official also said that, due to the lack of payment, some construction teams are being forced to halt work.

«A team went to a site, carried out the work, submitted an invoice for 300,000 hryvnias and said: «You’re not paying, so we’re stopping until we receive the funds.» And that has happened,» said Oleksii Savchuk.

At the same time, the city council is currently unable to predict how much money it will be able to transfer to contractors by the end of 2026.

«At present, it is difficult to forecast the final payment amounts by the end of the year, as the situation depends on further payments being made by the Treasury,» said Oleksandr Sienkevych.

It should be recalled that in early October, the Mykolaiv City Council appealed for the third time to the Verkhovna Rada and the Cabinet of Ministers, requesting 819.1 million hryvnias in additional financial assistance by the end of 2026. The mayor, Oleksandr Sienkevych, described this appeal as a «last cry for help».

The city is most short of funds for water supply and heating — 412.7 million hryvnias. A further 138.8 million is needed for the salaries of employees in public sector organisations, 106.3 million for utilities and energy supplies, and 96.7 million for passenger transport by electric transport.

When drawing up the 2026 budget, the funding shortfall was estimated at approximately 1.3 billion hryvnias. After cutting certain expenditure items, the city authorities managed to reduce this figure by approximately 481 million hryvnias.

Earlier, Oleksandr Sienkevych explained why the Mykolaiv Capital Construction Department was unable to utilise the planned funds in time. According to him, the city had deferred part of the payments for capital works until the end of the year in order to meet priority needs.

At the same time, the problem with making payments is not limited to Mykolaiv. The Association of Ukrainian Cities has appealed to the government to unblock payments to local authorities, as delays in payments could affect preparations for the heating season, the operation of utility companies and the fulfilment of contracts with contractors.