IN addition to his construction and media pro-jects,
New Jersey businessman Walter Prochorenko has been actively
working for the past seven years to introduce golf in
Ukraine. Directly or as a consultant, Prochorenko, 58,
has been involved in such projects as 12 Oaks at Koncha
Zaspa, the Kyiv Country Club, the King's Island Golf and
Tennis Club, and the Golden Gate Golf Club. In 1976, his
company began to develop projects overseas, starting with
military bases in Guam, Okinawa, Korea, and tile Philippines.
Later, it subcontracted on multi-billion dollar commercial
projects in Saudi Arabia, Egypt, Kuwait, Vietnam, Japan,
and the UAE. The biggest, Prochorenko says, were the holy
mosques in Mecca and Medina. But they also did schools,
hotels, microwave towers -and, of course, golf courses.
Although Prochorenko has played the game since he was
in his thirties, his real love is the golf courses themselves:
"The design aspect, the out-of-doors, putting it all together.'
He puts in a persuasive case for golf as a barometer of
investment worthiness.
Spring is just about here, but it looks like golf will
yet again have to wait another season to take hold in
Ukraine. But the game that was founded by a bunch of Scots
pottering around St. Andrews is more than a mere pastime
today. Golf is the grease in face-to-face meetings and
deal-cutting at the highest level - precisely because
it allows you to quietly potter around in the fresh air
rather than sitting in a stifling conference room.
More importantly, the game of golf is a high-class enterprise
and it can be an important instrument for attracting investments
to a country. Not only does golf generate substantial
jobs - a typical club can employ between 300 and 500 people
on a permanent basis - but it also provides companies
that are investing with a venue for business R&R for upper
and middle management.
Many embassies and multinationals admit they have a hard
time attracting good managers to a place that doesn't
have recreational facilities - particularly golf. Golf
has been cited as one of the key features missing in Ukraine
by diplomats and executives from Japan, Korea, the US,
the UK, Germany, and South Africa.
Take a look at the tiny Czech Republic. A few years ago,
there were no golf courses, and now it's building its
28th. Slovakia will soon have six. Poland has almost two
dozen courses. Even countries like Uzbekistan and Kazakhstan
already have golf courses and Russia is well on its way
to having six.
Hotel groups such as the Premier Palace, the Natsionalniy,
the President and the Dnipro are all keen to offer their
world-class clients a course near Kyiv. The Moscow Country
Club has even indicated that it could send one or more
planeloads of players each week to play at a course in
or around Kyiv, because their season is so much shorter.
But mention "golf" at a social gathering around Kyiv,
and you'll hear loud snickers of disbelief. "Not another
false rumor," someone is bound to say.
A side from business considerations, a gen-eration of
young Ukrainian athletes may lose the chance to participate
in the game at the next Olympics. Yet, for a country like
Ukraine, golf should be a natural. Its exceptionally athletic
young people would take to golf like ducks to water. This
was clear when the first driving range opened in Koncha
Zaspa a few years ago. Moreover, in parts of Ukraine the
terrain is almost ideal.
So what's been the big hold-up in getting the first golf
course going?
Investment is actually not the real problem, since there
are over 25 known groups ready to invest in golf here.
Even local investors have been jumping on the bandwagon.
There's the Ihor Bakai group with the Kyiv Country Club,
which started out as 12 Oaks at Koncha Zaspa. This project
included such big names as former Health Minister Yuriy
Spizhenko, UkrSat boss Boris Nepomiashchiy, GDIP's Valeriy
Yevdu-kimov, and former UkrNafta boss Ihor Di-denko. Their
project was being blueprinted by Finnish golf designer
and builder, Kosti Kuronen.
Mayor Oleksandr Omelchenko and his son are apparently
hoping to design and build a course and resort between
Kyiv and Boryspil.
Real estate brokers say Dynamo Kyiv owner and SDPU(o)
man Grigoriy Surkis is involved with the Ukrainian Golf
Federation - an organization that has already been established,
although there's no course in Ukraine! Surkis is apparently
planning one within city limits, just off the Moskovskiy
bridge between Obolon and Troyeshchyna.
The Pickard Group, together with HVB Credit-Anstalt,
and Trans Construction AS's Olaf Skaaret from Norway,
have had a project called the Kyiv First Golf & Country
Club in the works for several years. The current GDIP
boss, Pavlo Kryvonos, is involved.
Even Viktor Yushchen-ko was said to have been involved
in a golf resort project near the village of Bezradychi
with the Daewoo Group and California-based Cossack Investment
Fund.
So the answer lies in other factors. Some projects are
suffering from in-fighting between major players. Others
from a lack of financing. But all are feeling the pain
of red tape - and the lack of political will approve projects
in Kyiv.
When you have to deal with four separate layers of approvals
- local, rayon, oblast and federal - involving dozens
of individual bureaucrats, in addition to no clear-cut
guidelines, rules, or laws, it's easy to understand how
a process that elsewhere takes a few months, can take
several years here. By the time you get to a certain level
of approvals, the laws change and the approvals you already
have need to be re-approved. It's a killer.
Meanwhile, some 25,000 potential golf players in and
around Kyiv and Ukraine are waving dubs in their sleep,
ready for not just one, but several golf courses.
The economics of a golf project are some-J. thing to
consider seriously. Former US Commercial Attache- Andrew
Bihun wrote about the 12 Oaks at Koncha Zaspa project
that it could infuse some US $2.5mn directly into the
local economy - not including construction costs or new
jobs. This was in 1997 dollars. When translated into value-added
jobs for the entire region, including new roads, transport,
housing, communications, infrastructure, and so on, it
could well create more than 1,200 jobs.
Ukraine could see as much as US $125-170mn in new investments
thanks to golf. The clubs themselves would generate over
2,000 jobs directly and some 3-4,000 more indirectly.
While the construction costs of some projects such as
KCC, KFGCC, Boryspil and UGF are estimated to be in the
US S25-35mn range, others, like GGGC, are around US 54-
7mn with expected revenues of US $2-4mn after only one
year. In actuality, given the lack of leisure facilities
in Ukraine and the size of the market, revenues could
be far higher: at the least, the country could use 10-15
courses before the first phase of saturation might be
felt.
After all, when small countries like Austria can maintain
over 120 courses and states like Florida over 8,000, the
question of saturation becomes moot in a country of 49mn
that has yet to open its first. It's now thought that
Russia can accommodate over 300 courses, although it has
barely half a dozen.
If Ukraine is to attract investments and foreign capital,
its leadership should look at the idea of golf as a lure
to achieve this goal. Even diehard communist regimes in
China and Vietnam recognize that golf can draw capital.
Vietnam, in particular, used golf clubs as a way around
the US economic embargo by drawing Korean, Japanese, Taiwanese,
and Singaporean investors. They came - on condition that
there be golf courses for their executives.
It's inevitable that the first golf course will be built
in Ukraine. The question is, when?
It would be a shame if Ukraine lost the opportunity to
.send Olympic hopefuls to the next Summer Games where
golf will be an event - simply because on its half-million
square kilometers there was not a single proper golf course!
