In 2024, all resources from the road fund of Ukraine were redirected to defense needs. This sum amounted to about UAH 94.7 billion. However, the road industry is still financed through other sources:
- unused resources from the road fund from previous years;
- the reserve fund of the government of Ukraine;
- assistance from international organizations and partner countries.
In addition, roads can be built, repaired, and maintained at the expense of local budgets.
The DOZORRO project of TI Ukraine studied which road works were ordered in the 9 months of 2024, and whether the volume of these procurement transactions did decrease.
Contract details
According to Prozorro, 8,968 contracts amounting to UAH 52.2 billion were signed during this period. Notably, the text contains information about the concluded agreements, and not the money actually paid. In addition, some works and payment for them may be scheduled for several years ahead. Almost all contracts concern the maintenance and repair of roads.
The main part of the funds, UAH 39.48 billion, was allocated for the maintenance of roads. This includes routine road maintenance, snow removal, pit patching, roadside maintenance, and more. Major repairs and construction agreements amounted to UAH 7.23 billion. Another UAH 5.49 billion was spent on current repairs. The main procuring entities of these works are infrastructure recovery and development services and regional state administrations.
The expected value of all road-related procurement transactions is UAH 59.7 billion. Of these, for UAH 56.7 billion, procuring entities held tenders through open bidding with features. Another UAH 2.9 billion was contracted directly (mostly below-threshold procurement for minor repairs). Simplified procurement was also carried out for UAH 25 million.
Procurement this year is much more modest compared to peacetime. In 2021, according to the estimates of the Nashi Groshi program, Ukravtodor alone concluded agreements worth UAH 304.76 billion. Of this amount, UAH 260.85 billion was allocated for medium and major repairs of roads, and UAH 43.91 billion was channeled to operational maintenance.
Procurement transactions are also modest comparing to the first year of the full-scale invasion. According to our research, in 2022, Ukravtodor entities and regional state administrations alone concluded contracts for the repair and maintenance of roads for a total amount of UAH 95 billion. At that time, a significant part of the contracts concerned major (more than UAH 26 billion) and current (more than UAH 14 billion) repairs. And this despite the fact that in the first year, not all procurement transactions were published on Prozorro. That is, the cost of contracts in 2022 is actually probably higher.
Even as compared to 2023, this year, the volume of procurement of road works has significantly decreased. Last year, for the first three quarters, approximately UAH 81.8 billion was contracted for the repair and maintenance of roads. This year’s amount under contracts concluded for the same period is about 1.6 times lower. At the same time, last year, more than half of the amount under contracts was allocated for current repairs—almost UAH 43 billion. More than UAH 20 billion was allocated for major repairs and construction, and the rest—for operational maintenance.
2024 leaders among the regions
Vinnytsia oblast—UAH 11.14 billion
Vinnytsia oblast leads in terms of the amount under the contracts for roads. The cost of transactions has already exceeded UAH 11 billion. Of these, UAH 10.4 billion is allocated for the maintenance of 2,000 km of roads. The infrastructure recovery and development service in Vinnytsia oblast ordered services for three years—by June 2027. These agreements are the most expensive among all road contracts this year.
Kharkiv oblast—UAH 9.91 billion
Kharkiv oblast comes second with UAH 9.25 billion. The largest procuring entity is the infrastructure recovery and development service of Kharkiv oblast, which concluded agreements for three-year maintenance of roads worth UAH 6.3 billion.
For another UAH 765.8 million, the Department of Construction and Road Facilities of the Kharkiv City Council ordered current repairs.
Odesa oblast—UAH 4.47 billion
Odesa oblast comes third with UAH 4.47 billion. The largest procuring entity is the infrastructure recovery and development service in Odesa oblast. It ordered the maintenance of regional roads for UAH 4.3 billion. These contracts provide for the provision of services by the end of 2026.
In addition, the Department of Road Facilities of the Odesa City Council and the Municipal Enterprise City Roads concluded agreements for the ongoing repair of municipal roads in the amount of UAH 229 million.
Which companies get the largest contracts?
The largest contracts were awarded to three companies that have been among the largest road repairers in Ukraine for several years. The total value of their contracts is half of the total amount.
Autostrada
The absolute leader under the concluded contracts is Group of Companies Autostrada LLC. Maksym Shkil’s company signed 8 agreements worth UAH 13.6 billion. This is 26% of the total cost of road contracts.
In particular, UAH 10.18 billion was contracted on the part of the infrastructure recovery and development service of the Vinnytsia region. Other contracts of GC Autostrada LLC were concluded with the infrastructure recovery and development services in Zhytomyr and Kharkiv.
This year, the company has already received orders for UAH 30.9 billion. In particular, Autostrada is building a metro branch in the Vynohradar district and the Khortytsia (DVS2)–Tomakivka–Marhanets water pipeline. Last year, the company received orders for UAH 12.4 billion in the same period of time.
Avtomahistral-Pivden
Avtomahistral-Pivden LLC comes second in terms of the contracts concluded. The company signed 12 agreements for almost UAH 6.6 billion. This is 12.6% of the total amount under concluded agreements.
The largest procurement entity of Avtomahistral-Pivden LLC is the infrastructure recovery and development service in Kharkiv oblast. It ordered works for UAH 5.7 billion. Another two procuring entities are regional services from Kyiv and Odesa.
The owner of Avtomahistral-Pivden LLC is Oleksandr Boiko, Vice President of the National Association of Road Workers of Ukraine. In the course of the year, the company has received orders worth UAH 11.36 billion, while for the same period last year, its orders reached UAH 20.6 billion.
According to the company, on October 4, searches were conducted in its offices, as well as in the apartments and cars of the company’s managers. Law enforcement officers are interested in the contracts that the firm has received in several regions of Ukraine.
Rostdorstroi
Rostdorstroi LLC comes third in terms of concluded contracts. The company signed 19 agreements for a total amount of UAH 4.7 billion, i.e., 9% of the total amount of concluded agreements.
The largest procuring entity for Rostdorstroi was the recovery service in the Mykolaiv region—UAH 1.33 billion. The company also received contracts in Odesa, Cherkasy, Dnipropetrovsk, Kherson, and Kharkiv oblasts.
Rostdorstroi LLC is owned by Yurii Shumakher and Yevhen Konovalov through the Austrian company Uttema AU GmbH LLC.
This year, the company has already received orders for UAH 7 billion. Last year, the LLC received contracts worth UAH 20.4 billion during the same period.
Conclusions
In 2024, road procurement decreased significantly compared to the peaceful 2021. Similarly, its scale is smaller than the orders in the first year of the full-scale invasion and those from last year. This year, almost no major repairs were purchased, which accounted for the lion’s share of pre-war road orders (in particular, within the framework of the Large Construction). At the same time, maintenance expenses have remained almost at the same level, which indicates the priority of current road maintenance in wartime conditions.
Of course, the situation may change in the last quarter of the year. We will continue monitoring the trends.
This publication was prepared as part of the Digital Transformation Activity, funded by USAID and UK Dev.
Source: glavcom.ua
