Reference Number: No. 696-94




December 14, 1994



The Department of Defense announced today that a joint U.S.-Ukraine venture has begun construction on a $16 million apartment complex in Khmelnitsky, Ukraine for former Strategic Rocket Forces officers and their families. Funded under the Cooperative Threat Reduction (CTR) (Nuun-Lugar) program, this project is one among many focused on dismantling Ukraine's strategic nuclear forces. This defense conversion/housing project was developed in response to the Government of Ukraine's request for assistance in this area. Khmelnitsky is located approximately 186 miles southwest of Kiev.

Under the U.S. CTR program, a $40 million implementing agreement for defense conversion and industrial partnership assistance was signed on March 21, 1994 by DoD and Ukraine's Ministry of Machine Building, Military-Industrial Complex and Conversion of Ukraine. As of November, over $277 million in Nunn-Lugar funds for all categories of cooperation has been obligated for Ukraine and this assistance is currently being provided to Ukraine on a mutually agreed timetable.

The joint venture between the Ukrainian firms Montazhnik K and the Central Design Institute, and the U.S. firms of ABB SUSA, Inc., and American International Services, Inc., will design and construct four apartment buildings with a total of 135 units at a housing development site on the outskirts of Khmelnitsky. The apartments will range from one bedroom, 408 square-foot flats to four-room, 839 square-foot flats. Work will include the construction of necessary utilities, roads and sidewalks. The project is expected to be completed within a year. Ukraine will provide land and extend utilities from existing locations to the housing sites. The Ukrainians plan to eventually build a self-contained community at Khmelnitsky with 1,500 multi-story apartment units, utilities, roads, schools, shopping malls and service buildings.

Ukraine President Leonid Kuchma's November state visit to the United States marked an important turning point in the U.S.-Ukrainian relationship and is considered a great success in advancing the two countries' bilateral commitment to defense cooperation. The ground breaking ceremony held today is just one example of the extensive cooperation now underway between the United States and Ukraine in a range of areas from cooperative programs to assist in the dismantlement of the strategic nuclear arms on Ukrainian territory and industrial partnerships between U.S. and Ukrainian firms, to a range of military and defense contact programs designed to address Ukraine's broader security concerns.