Kyivavtodor procured road repair services for UAH 5.2 bln for the recent 1.5 years. Are those kind of orders appropriate during a full-scale war?

The shifting of paving stones on Bohdan Khmelnytskyi Street, the construction of an expensive interchange on Bohatyrska Street and the collapse of the Dehtiarivskyi bridge are probably the three most high-profile road stories in Kyiv over the past year. The most famous, but not the only ones. There are a lot of roads in Kyiv, and they are still being repaired now.

Who repairs roads in Kyiv

The Municipal Corporation “Kyivavtodor” is responsible for the maintenance and repair of the capital’s roads. Kyivavtodor and its affiliates have 2230 streets over 1,660 km long on their balance sheet. To put it in perspective, this is 25% more than the geographical length of Ukraine from West to East, which is 1,316 km.

We will mainly focus on road repairs in this material. They were arranged by Kyivavtodor and 12 of its affiliates: Kyivshliakhmist, ROM “Mahistral”, and other district maintenance companies. Before delving into the specifics, let’s highlight a few crucial points:

• We’re discussing procurements, primarily because at the onset of the great war, customers were granted the freedom to procure all necessary items directly and provide reports only after the victory. Therefore, we do not have clear data for those months, and in the future, we will only use information that is publicly available.

• The cost of procurements is not equal to the funds paid. That is, if any district road maintenance offices procured road repairs for UAH 650 million, this does not mean that UAH 650 million has already been paid to the contractor. Moreover, major repairs may extend over multiple years, and the payment will be spread across those years.

• Procurements by Kyivavtodor and its structures are not the only road orders in Kyiv. The inter-block road areas are maintained by district administration services, we also mention them in this text. And there also small orders for driveways located within their areas.

Kyivavtodor and Kyivshliakhmist are the biggest procuring entities

From the commencement of the full-scale war until September 26, 2023, Kyivavtodor and its 12 affiliated enterprises successfully finalized 96 procurement activities for repairs and reconstructions, amounting to nearly UAH 5.2 billion (with the estimated procurement cost being UAH 5.4 billion). Another 34 procurements worth UAH 3.6 billion were unsuccessful.

Most tenders had competitions. Only 5 completed contracts were signed outside of Prozorro. However, not everywhere there really was a real competition. Almost 80% of completed tenders actually had one participant. Hnata Khotkevycha Street repairs tender in Desnianskyi district is worth mentioning. There, 7 companies competed for a contract worth UAH 14 million.

The largest procured repairs and reconstructions were:

• reconstruction of Bohatyrska-Poliarna streets intersection in Obolonskyi district — almost UAH 1.3 bln, Avtomahistral-Pivden LLC,
• major repairs of Kyiv half roundabout (Ring Road) from Zhulianskyi overpass to turn towards Vyshneve — UAH 970 million, ONUR CONSTRUCTION INTERNATIONAL LLC, and
• reconstruction of the overpass as a part of the intersection of Dehtiarivska-Oleksandra Dovzhenka streets — UAH 920 million, ROSTDORSTROI LLC. On September 30, bridge pillars and spans collapsed on that facility.

Accordingly, those awardees became the top contractors for road repairs and reconstructions recently, covering two-thirds of the procurement costs. In addition to Kyivavtodor, they cooperate with district road maintenance offices:

• Avtomahistral-Pivden LLC has contracts with Shevchenkivskyi, Desnianskyi, and Obolonskyi district ROMs,
• ONUR CONSTRUCTION INTERNATIONAL LLC cooperates with Darnytskyi and Dniprovskyi district ROMs as well as with Mahistral ROM,
• ROSTDORSTROI LLC performs works for Podilskyi and Pecherskyi district ROMs.

Interestingly, these contractors do not cross districts and do not participate in tenders together.

Who has already been paid for what

Kyivavtodor and its 12 affiliates paid UAH 1.8 bln between February 24, 2022, and September 27, 2023. UAH 965.8 million was paid under contracts concluded before the full-scale invasion. The remaining UAH 892.7 million are payments under contracts signed after the war.

Also, looking through payment records, we can learn more about that period when procurements were signed directly without making them public. The Spending portal shows transactions worth UAH 37.1 million under contracts that are not available on Prozorro. They were signed in the spring and early summer of 2022.

In general, over the past year and a half, payments have been received by:

• Avtomahistral-Pivden LLC — UAH 489.6 (26%),
• ONUR CONSTRUCTION INTERNATIONAL LLC — UAH 403.4 million (22%),
• Kyivshliakhbud SE —UAH 257.3 (14%).

Rostdorstroi LLC has recently received UAH 41.1 mln (4% of total award price) for the reconstruction of the overpass as a part of the intersection of Dehtiarivska-Oleksandra Dovzhenka streets. Police investigates embezzlement of funds at that facility.

UAH 352.5 million was paid for tenders announced in 2022. That’s 65% of the total. UAH 503.1 million or 11% was paid for procurements in 2023. Most likely, these are advances.

Renovated streets of Kyiv yards

In addition to streets, asphalt is also being repaired in adjacent areas and in inter-block driveways. For example, in June 2023, the city budget additionally allocated UAH 100 million for that purpose. That type of work is ensured by management companies and departments of district state administrations, and not by Kyivavtodor.

Since the beginning of the full-scale invasion, Prozorro has published 271 contracts for repairs of asphalt pavement of adjacent areas and intra-block driveways for almost UAH 286 million. Some of them, worth almost UAH 51 million, were terminated — probably due to lack of funds. Obolonskyi district has the largest number of terminated contracts.

In some districts, at the time of uploading data for analysis, tenders were still ongoing — 30 orders worth UAH 26.7 million. To sum up, most of the funds for renovating the yard roads are to be spent in Darnytskyi district (UAH 61.1 million) and Holosiivskyi district (UAH 59.5 million). Pecherskyi district has the smallest amount (UAH 1.3 million).

So, from February 24, 2022, to the end of September 2023, Prozorro has information about the following procurement transactions:

• road repairs and reconstructions worth UAH 5.2 billion,
• road marking worth UAH 57 million,
• asphalt repairs in yards and driveways worth UAH 235 million, and another 26.7 million pending (ordered by the State District Administration structures and management companies).

Also, Kyivavtodor and its affiliates did some work on their own, without outsourcing.

Is it appropriate to spend money for roads during the war?

We don’t have an unambiguous answer to that question. At the governmental level, there are currently no established guidelines or recommendations regarding the utilization of local budget funds during martial law. At the same time, the public rightly expects that taxpayers’ money will be spent on the most important needs.

With this in mind, it’s feasible to categorize the expenditures of local budgets into two types.

• Urgent costs ensuring maintaining public safety, public utilities, basic services to the population, and maintaining critical infrastructure in good condition. Expenses that can lead to a deterioration of the state.
• Expenses for improving and developing the existing infrastructure. They can be postponed for better times.

The road’s condition might indeed be so deteriorated that it hampers transportation, posing a risk to logistics or even jeopardizing traffic safety. Then the repair should not be postponed. But the construction of multibillion-dollar interchanges hardly falls under this description.

Additionally, the outcome is greatly influenced by the project itself — how well the proposed solution works and if the investments are truly necessary for its success. For example, there is an alternative project to Dehtiarivskyi overpass, presented by Bike City Consulting back in 2021. Its experts proposed a single-level interchange with a roundabout which will occupy 350 m² less area than the two-level cloverleaf interchange.

It is impossible to reallocate absolutely all the road money to other needs. However, it is always more reasonable to plan their repairs and reconstructions.

The text was prepared within the USAID / UKaid project “Transparency and Accountability in Public Administration and Services / TAPAS.”