According to the damage.in.ua project, more than 120,000 residential buildings have already been destroyed and damaged due to the war in Ukraine. It is the housing stock that has suffered the most, accounting for 38% of losses in monetary terms. Infrastructure facilities come second. In particular, almost 24,000 kilometers of roads were damaged.
The first rebuilding projects started back in April. At that time, the government allocated a billion of hryvnias for the restoration of de-occupied oblasts: Kyiv oblast (UAH 400 million), Sumy oblast (UAH 250 million), Chernihiv oblast (UAH 250 million), and Zhytomyr oblast (UAH 100 million). And recently, Prime Minister Denys Shmyhal has stated that EUR 1 billion from the European Investment Bank will be used to restore damaged critical infrastructure. In addition, there are now also constructions and repairs that are not related to the war.
However, not all of these procurement transactions can be seen in Prozorro. At the end of February, state structures were allowed to buy everything directly — to conduct procurement transactions without an electronic system, and to report on them after the end of the war. At the end of June, these rules were changed — procuring entities were obliged to conduct simplified procurement when possible. However, we will be able to assess the full picture of such procurement transactions only after the victory.
However, some of them are still visible now. Therefore, we have decided to research what is being built and repaired at budget expense during the war.
Is it time for construction?
The position of society on the restoration of critical infrastructure is mostly unanimous — these works are supported. This is expected because without such repairs, people will not have basic living conditions. Instead, when it comes to building something outside the war context, opinions start to differ. Someone supports certain projects; someone suggests allocating money for other needs.
In general, decisions on construction and repair costs are made by the entities in charge of the funds — state administrations, hospitals, education departments. But it often comes up against the problem of funds. In the conditions of war, they are scarce because most of the money is spent on defense. However, this does not mean that it is not allocated for other needs at all. In particular, there are no bans on procurement. Simply, the treasury conducts payments based on resource security.
Construction in Prozorro
Currently, the system has data on the procurement of construction, repair, and reconstruction services worth UAH 6.8 billion starting from the beginning of the full-scale war. The largest number of procurement transactions were conducted in Lviv oblast — for UAH 642 million, Kyiv oblast — for UAH 612 million, and Vinnytsia oblast — for UAH 577 million.
89% of the contracts were concluded directly, without tenders at Prozorro. In value, they represent approximately one-third of the total.
Half of the amount of all contracts will be used for the construction and repair of power grids, transmission lines, and substations. Now, we can see road contracts for UAH 261 million. As for shelters, their cost is even more difficult to estimate — most procuring entities do not publish such agreements for safety reasons. So far, there are UAH 85 million worth of similar agreements in the system. There are contracts worth UAH 624 million for repairs in educational institutions and medical institutions, where part of the money was also allocated for shelters.
5 most expensive agreements
This is a project of “Great Construction,” within which an existing 25-meter pool is to be reconstructed and another one, of 50 meters, is to be built. Last year, officials planned to finish construction at the end of 2022.
The open bidding was announced in April. Only two Rivne companies participated in the tender: PE MODENA (winner) and TOV IBK PROMZHYTLOBUD. Firms almost did not compete and lowered prices only once — by a minimum step of 0.5%.
The MODENA enterprise was founded in 2001, but has participated in public procurement since 2017. During this time, the firm managed to win 134 contracts worth UAH 400 million. Thanks to the pool tender, which accounts for almost half of this amount, 2022 may be the most successful year for the company in procurement.
A competitor of Modena, TOV IBK Promzhytlobud, exists less — only since 2020. The company took part in 26 tenders, half of which it won.
Both firms also participated in the tender for the construction of a new surgical building of Rivne Oblast Clinical Hospital for UAH 284 million. There, they had a similar strategy — a minimum one-time price reduction and the victory of PE “MODENA.” However, in that case, the auditors found inconsistencies in the bids of the participants, and the procuring entity canceled the procurement.
In turn, tenders for swimming pools and a hospital building are the second attempt to buy construction. For the first time, procurement transactions were announced before the start of the full-scale war: on February 2 for the reconstruction of the sports school, on February 7 — for the construction of a new surgical building. At that time, no firm had volunteered for tenders.
It is interesting that the design of both objects was carried out by one enterprise — Kyiv TOV “All-Ukrainian Center of Public-Private Partnership,” for which it received UAH 20 million. Numerous violations in the procedures, inconsistencies in the tender documentation, anticompetitive actions of the participants were mentioned in the media at that time.
The procurement transaction was carried out by VAT Ternopiloblenerho, which is 50.99% owned by the state. Cypriot firms Bikontia Enterprises and Larva Investments, affiliated with Ihor Kolomoiskyi and Kostiantyn Hryhoryshyn, own another 25% and 15% of the shares, respectively.
Technical re-equipment of transmission lines, modernization of substations, reconstruction of power transmissions and substations in the settlements of the oblast were ordered by TOV Elitar. The company was founded in 2003, registered in the village of Bila, Ternopil oblast. The only competitor of TOV Elitar at the bidding was TOV Hlobal Enerho. Enterprises did not reduce prices at the auction. Over the past two years, they have competed together at 4 more tenders of VAT Ternopiloblenerho, and TOV Elitar has always won.
During the existence of Prozorro, TOV Elitar has received state contracts for UAH 1 billion, almost 90% of which falls on VAT Ternopiloblenerho.
The highway of national importance H-03 Zhytomyr—Chernivtsi has a length of 350 km, passes through the territory of Zhytomyr, Khmelnytskyi, and Chernivtsi oblasts. Its major repairs and reconstruction started in 2020 within the framework of “Great Construction”.
This year, the Khmelnytskyi region road service purchased additional works, as the general designer of the reconstruction, TOV AVTOMAHISTRAL ENGINEERING COMPANY, announced the need for them.
The procuring entity conducted a negotiation procedure, and the contract was concluded with TOV JE AVTOSTRADA. In 2021, this contractor conducted the current average road repairs in the Khmelnytskyi region for UAH 231 million.
TOV JE AVTOSTRADA was founded in 2015, registered in Vinnytsia, and through TOV MS KAPITAL belongs to Maksym Shkil. According to Nashi Hroshi, in 2021, TOV JE AVTOSTRADA came first in terms of contracts from Ukravtodor by concluding contracts for UAH 23.3 billion.
The order for construction was placed by AT SUMYOBLENERHO, which is 25% owned by the state. Cypriot firms Bikontia Enterprises and Larva Investments own another 25% each, and UA ENERGY DISTRIBUTION HOLDING LIMITED owns 19%; they are affiliated with Ihor Kolomoiskyi and Kostiantyn Hryhoryshyn.
The contract was concluded with TOV PROMATOM, which in 2021 conducted the construction of the first stage of the substation. The Kyiv TOV PROMATOM exists for 25 years and is almost entirely owned by Dmytro Hapotii.
The total amount of state contracts received by TOV PROMATOM reached more than UAH 1 billion. More than a half (UAH 595 million) falls on AT SUMYOBLENERHO, UAH 164 million — on AT CHERNIHIVOBLENERHO, and UAH 136 million — on AT VINNYTSIAOBLENERHO.
The only competitor in the tender was the Odesa TOV ZEMLEBUDSERVIS of Oleksandr Rozhayev.
This is another large procurement transaction by VAT Ternopiloblenerho (the previous one is the second in our list). Again, TOV Elitar won. However, this time, the Ternopil PE Enerhokonstruktsiya competed with it.
As we can see from the largest procurement transactions that have already been published, some projects of “Great Construction” continue. How widespread this phenomenon is, can be stated after the martial law, when the rest of the agreements will be published in the system, and when information will appear about how they were performed and when they were paid for. As is the case with other construction projects that are or are not related to the war.
Whether it is necessary to build something that is not related to the war should be decided by each body, based on the urgency of needs and funding. Perhaps it is better in some case not to interrupt the process and bring the work to an end, or to repair the road to simplify logistics. And sometimes it is better to wait with expensive projects and give priority to something else. However, in any case, the entity in charge of funds — either the city council or the local branch of Ukravtodor — should be ready to explain their decision to people.
This publication was prepared with the financial support of the European Union. Its contents are the sole responsibility of Transparency International Ukraine and do not necessarily reflect the views of the European Union.
Source: lb.ua
