At the end of 2022, Ukraine implemented a forestry reform to increase efficiency and reduce corruption risks. This led to the creation of the state specialized economic enterprise “Forests of Ukraine,” which now manages the country’s forest resources.

Over the past two years, foresters have repeatedly come under scrutiny for procurements that raised questions about their feasibility during the war.

The DOZORRO Project analyzed the procurements of the State Enterprise “Forests of Ukraine” from 2023 to December 2024 to determine how funds are being spent and what priorities the company has set.

General statistics and priorities

According to the BI Prozorro Public Module, foresters have carried out over 2,000 procurements in two years, with a total expected cost of UAH 13.7 billion. At the same time, the current contract amount is half as much — UAH 6.8 billion — since more than a third of the tenders were unsuccessful. Another UAH 1.7 billion of procurements remain active.

Last year, the company concluded contracts worth UAH 4.7 billion. This year, the amount is significantly lower — UAH 2.1 billion. In general, most of the funds were contracted for fuel procurement — about UAH 2.5 billion. Contracts worth over UAH 800 million were signed for vehicle procurement.

Nearly 57% of the Forests of Ukraine’s successful procurements were conducted through special open bidding. In more than 23% of cases, procuring entities opted to request price offers, while in another 19%, they awarded direct contracts.

Main procurement areas in 2023: The majority of funds were allocated for fuel, lubricants, and electricity — nearly UAH 3 billion in total. Significant sums were contracted for road construction in woodlands, as well as for vehicles and auxiliary equipment.

Main procurement areas in 2024: Emphasis was placed on procuring vehicles and fuel, as well as security and legal services.

What is the money spent on?

Repairs of forest roads

One of the company’s priorities is the construction and repair of roads in forests. Last year, Forests of Ukraine announced plans to construct 500 km of new roads. According to the company, these roads are crucial not only for forestry but also for the country’s defense, as they are used by the military and border guards. Therefore, in their view, this is not a luxury, but a necessity.

Over two years, UAH 628 million was contracted for road repairs, broken down as follows:

• UAH 551 million — in 2023;
• UAH 77 million — in 2024.

Another UAH 82 million of procurements remain active.

Forest roads are being repaired in Rivne, Volyn, Ivano-Frankivsk, Zakarpattia, Khmelnytskyi, Kyiv, Chernihiv, and Zhytomyr regions. The largest contracts were awarded to three companies, whose total contract value accounts for three-quarters of the total amount.

The leader in concluded contracts is PBS LLC. The company has signed contracts worth UAH 169 million. One of the key projects was the construction of a 9.2 km road along the border of the Gorgany Nature Reserve, connecting the resorts of Bukovel and Bystrytsia. At the same time, journalists from NGL.media reported that the company began work even before the official conclusion of the contract. Officially, PBS LLC is owned by Ivanna Nepyk, but the actual top manager is considered to be Oleksandr Shevchenko, a former MP. He is also the founder and former director of the Bukovel tourist complex, which came under the control of Ihor Palytsia in 2021.

EDB LLC is second, with awarded contracts worth UAH 159 million. The company’s co-founders are Maksym Kokariev, Yurii Klimov, Andrii Kositsyn, and Oleksandr Kiblyk. According to information from the Center for Public Investigations, the leader of one of the company’s contracts was suspected of possible embezzlement of budget funds during road repairs in the Kharkiv region.

Welt Capital LLC rounds out the top three with contracts worth UAH 101 million. Its owner is Tetiana Pavlenko, a resident of Lviv. The media have repeatedly reported that the company inflates prices for its services. Additionally, deputies of the Lviv City Council have demanded the termination of one of Welt Capital’s contracts due to financial fraud involving tax understatement.

Forest demining

A significant portion of the forests remains mined after the occupation, posing a serious danger to both people and nature. Since Forests of Ukraine do not have a dedicated mine clearance service, they decided to outsource this task.

In 2023, the foresters launched their first such tender. A mine clearance contract worth UAH 550.4 thousand for the Bazar Forestry (in the north of the Zhytomyr region) was signed with Ukroboronprom. A non-technical survey indicated that there were no threats, and manual mine clearance of the area was not required. As a result, the company was paid only UAH 99.8 thousand for the survey.

In July of this year, foresters ordered mine clearance for two forestries in the Chernihiv region. A contract worth UAH 6.5 million was awarded to Patron Demining. As part of the project, 26 hectares were cleared in Koliazhynske Forestry and 1.7 hectares in Krasylivske Forestry. During the operation, experts discovered nearly 500 explosive objects.

Procurement of security services

The protection of forestry offices is one of the priorities of the state-owned enterprise, as demonstrated by the relevant tenders. Forests of Ukraine began ordering these services last year due to the need to protect themselves from theft, as well as breaking and entering. The total value of security contracts for this period is UAH 157.7 million. Tenders for new security services, worth an additional UAH 158.5 million, are currently underway.

The first transaction, worth UAH 42 million, was concluded by the foresters with Sheriff-Zakhyst Private Enterprise in November 2023. The services, related to the protection of facilities in the Khmelnytskyi, Chernivtsi, and Ternopil regions, were provided by the company. The company owner is Dmytro Stryzhov, a former deputy of the Kyiv City Council. In February, journalists noticed that many security posts were unstaffed. Activists also suggested that companies from the Sheriff group were violating labor laws by paying employees minimum wages, or even less, and failing to pay the required taxes. After the issue was publicized, the contract value was reduced by UAH 16 million.

In March, the leadership of Sheriff-Zakhyst became subjects of a criminal investigation, suspected of embezzling UAH 420 thousand in public funds intended for the protection of forestry in the western regions.

In April, Forests of Ukraine signed two more contracts with the company. One of the contracts is for the protection of forestry facilities in the Lviv, Ivano-Frankivsk, and Zakarpattia regions, worth UAH 49 million. The other is for security services in the Cherkasy, Kirovohrad, and Vinnytsia regions, valued at UAH 44.7 million.

In total, Sheriff-Zakhyst was awarded contracts worth UAH 135.8 million.

In addition, the Kolchuga Security and Detective Agency, which provides services for the Slobozhanskyi Forestry offices, received contracts worth UAH 21.9 million. Its owners are Maksym Mykhailyk and Olha Knysh.

Legal services

This year Forests of Ukraine contracted more than UAH 15 million for legal services. In total, they signed 109 agreements with 44 contractors. The largest orders were received by law firms: Levytskyi & Partners (UAH 3.9 million), Serhiichuk & Partners (UAH 2 million) and LS Group (UAH 1.2 million).

In August, Telegraf alleged that Forests of Ukraine used public funds to hire lawyers to conceal the illegal actions of their employees. One example cited in the article involved the prosecutor’s office demanding the cancellation of a logging ticket issued by the enterprise, which permitted the destruction of protected trees in the Kuialnyk Forest in the Odesa and Mykolaiv regions. In the first instance, the court fully supported the prosecutor’s office. However, Forests of Ukraine hired lawyers to argue that the prosecutor’s office had no grounds to bring the case to court.

The company justifies its spending on legal services by citing a large number of court cases, including those related to the illegal seizure of land, debt collection for timber, and the defense of its employees’ actions.

Procurement of vehicles

Over two years, the foresters procured 458 vehicles worth UAH 545 million. Last year, they purchased 186 vehicles, and this year — 277 more. The cost of each vehicle starts at UAH 800,000.

The procurements include Mitsubishi L200 pickups, Renault Duster crossovers, and Suzuki Jimny SUVs. The contractors were Polissia Motors Group, Forward Auto Group, Vidi Grand, Kyi Auto Center, and Autocenter Kyiv.

The foresters explain the large number of vehicles procured as necessary to replace those transferred to the Armed Forces of Ukraine. Also, the company transfers some of the procured pickups, trucks, and buses to the defenders.

Controversial procurements

Some procurements by the state-owned enterprise raise questions about their feasibility. Notable examples include:

• PR for UAH 5 million: In June last year, the company ordered services for the production of advertising materials, including 21 videos and an animated cartoon. The agreement also included media monitoring and information policy consulting services. However, the contract was terminated after being made public.
• Wristwatches for UAH 614 thousand: Last year in November, the company ordered watches worth UAH 96.6 thousand. This year, they placed similar orders in March for the same amount and in July for an additional UAH 421 thousand. These watches were procured as gifts for employees to recognize their achievements in professional activities and their significant personal contributions to the development of the forest industry.
• TV sets for UAH 252 thousand: in October 2023, the company procured six Samsung QE65Q60CAUXUA TVs, each worth UAH 42 thousand.

Conclusions

Procurements by Forests of Ukraine raise many questions, with some funds directed toward rather dubious expenses. Expensive televisions and watches are not the kind of procurements one would expect from a state-owned enterprise during wartime. Equally concerning are the millions spent on security and legal services.

Of course, the creation of a single state-owned enterprise to manage Ukraine’s forest resources was a positive step. The fact that we can now see these procurements in the system represents an improvement over the past when forestry departments concealed their expenses from the public and did not consider themselves procuring entities.

However, the ongoing public interest — and often dissatisfaction — regarding the procurements of Forests of Ukraine highlights the need to reassess their spending priorities. Or, perhaps, the company could more actively communicate its management decisions on this matter.

After all, in wartime, funds should be used as efficiently as possible. This is not only a public demand but also a fundamental principle that the entire state should adhere to.

This material is funded by the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.