Possible Overpayment of UAH 114 Million in the Reconstruction of the Bortnychi Aeration Station

In 2025, the Kyivbudrekonstruktsiia municipal enterprise contracted TFM-Skhid LLC for UAH 709 million to reconstruct the Bortnychi Aeration Station. The company secured its first major contract in March — UAH 562.5 million for works on sludge field dikes No. 1 and No. 2. In August, the same contractor received another contract worth UAH 147 million for additional works to raise the dikes and embankments around site No. 1.

The Bortnychi Aeration Station is the main wastewater treatment facility for Kyiv, as well as for several settlements in the Kyiv region: Vyshhorod, Irpin, Vyshneve, Bortnychi, Hnidyn, Shchaslyve, Chabany, Kotsiubynske, Pohreby, Novosilky, Hatne, Sofiivska Borshchahivka, and Petropavlivska Borshchahivka. The sludge fields, where TFM-Skhid LLC was contracted to work, are vast settling basins where sludge is discharged after treatment. The sludge is contained by dikes to prevent contaminants from spreading into soil and groundwater.

Reconstruction of the sludge fields at the Bortnychi Aeration Station began back in 2018. Over these seven years, the procuring entity has signed 10 contracts worth UAH 2.4 billion, although the actual disbursed amount is smaller — UAH 1.5 billion. TFM-Skhid LLC is already the fourth contractor to perform these works. Previously, Promin Bud Service LLC, Synerhiia Bud LLC, and Garantbud LLC were engaged in the reconstruction.

Potentially discriminatory requirements

The main procurement in 2025 was carried out through special open bidding. Two bidders participated. TFM-Skhid LLC won against Avtomahistral-Pivden LLC by offering a bid only two hryvnias lower than its competitor.

The tender documentation included requirements that could favor “insider” companies. For example, bidders had to provide a written undertaking to accept possible deferred payment during martial law and for six months after its end. In practice, this allows the procuring entity to delay payments to “undesirable” suppliers/contractors, undermining the principle of equality. “Insider” companies may receive payments promptly, while others could face lengthy delays without guarantees.

Another requirement was a restricted period for confirming relevant experience. Kyivbudrekonstruktsiia required bidders to prove their experience exclusively for the period from 2019 to 2023, completely disregarding 2024–2025. This effectively narrows the pool of potential competitors and favors companies with the required contract history within that specific timeframe. For new market entrants or those active in the last two years, the tender becomes inaccessible.

We also noted excessive requirements for staff qualifications. The procuring entity demanded that company engineers have at least three years of experience, be insured against third-party liability, and provide copies of contracts or insurance policies to prove it. In reality, this is unnecessary: the contract is concluded with the contractor, not its individual employees. Such conditions appear to be artificial barriers aimed at excluding those outside the “system.”

As a result, the procuring entity effectively acquires a tool for selectively disqualifying companies. New or “outsider” firms are put at a disadvantage. These are classic red flags indicating potential discrimination and possible lobbying.

Massive overpayments

The Dozorro team analyzed this year’s cost estimates for the reconstruction of the Bortnychi Aeration Station dikes and identified a likely overpayment on construction materials exceeding UAH 114 million. The prices offered by TFM-Skhid LLC are on average nearly twice the market level. At the same time, both contracts include dynamic pricing — the procuring entity may adjust material costs in the work acceptance certificates.

Top 5 items with overpricing

 The largest overpayment concerns quarry soil used for dike backfilling — UAH 52.8 million. An annex to the first contract specifies that this is loam. TFM-Skhid LLC included it in the estimate at UAH 372 per ton (all prices are VAT-inclusive). Yet the market value is seven times lower. For example, Budowa sells it at UAH 80 per ton, Petragranit LLC at UAH 30 per ton, and Emerald Stone at only UAH 20 per ton.

In the additional works contract, the procuring entity listed only the generic term “quarry soil.” The contractor’s price remained unchanged at UAH 372 per ton. Even in this case, the market price is significantly lower: Budowa sells soil at UAH 80 per ton, while Technique Park offers it at UAH 50 per ton. Here, the likely overpayment amounts to UAH 31.7 million.

The situation is similar for other construction materials. TFM-Skhid LLC is to supply concrete mix C20/25 at UAH 6,363 per cubic meter. For comparison, UkrButBeton sells concrete with higher performance characteristics at UAH 3,856 per cubic meter, while Grand Beton offers it at UAH 4,294 per cubic meter. This may result in another UAH 20.9 million in overpayments.

First complaints and initial responses

After the signing of the main contract for the reconstruction of the Bortnychi Aeration Station, Dozorro analysts notified Kyivbudrekonstruktsiia and the Department of Internal Financial Control and Audit of the Kyiv City State Administration about the potential overpricing. The Department informed us that they took note of the information and, together with Kyivekspertyza, conducted a sample analysis of material costs. Auditors confirmed the presence of overpricing — according to their calculations, materials were overpriced by UAH 77.3 million. On this basis, they addressed the Department of Housing and Utility Infrastructure, “emphasizing to the management of Kyivbudrekonstruktsiia the need to comply with public procurement legislation.”

The response from the Department of Housing and Utility Infrastructure was purely formal. They stated that to prevent overpricing, the procuring entity had been instructed to verify work completion certificates and cost statements through “a state-owned expert organization.” The Department further assured that the contract contained mechanisms to protect the procuring entity from inflated material costs and cover potential losses.

A week later, we also received a response from Kyivbudrekonstruktsiia. They informed us that TFM-Skhid LLC had already started work and transferred UAH 10.7 million as a guarantee. The procuring entity refused to reduce the contract value. Instead, they assured us that for price control an additional agreement had been signed, introducing control mechanisms such as weekly reports, on-site meetings, and verification of certificates. However, these mechanisms are merely formal: they do not oblige the contractor to adhere to market prices, nor the procuring entity to verify the actual costs. The agreement does not specify who will select the expert organization, what exactly it will verify, or how compliance will be determined.

Following our inquiries, the Department for the Prevention and Detection of Corruption of the KCSA publicly declared a “victory,” claiming that they had reviewed the procurement, detected UAH 24.7 million in overpricing, and issued recommendations to the procuring entity.

Control fails, information withheld

In April, Dozorro analysts submitted a request to the National Anti-Corruption Bureau of Ukraine to open a criminal case for potential deliberate overpricing in the procurement. In response, the NABU informed us that detectives had started an information and analytical review, after which a decision on possible pre-trial investigation would be made.

However, no criminal proceedings were opened — the Bureau did not establish a violation within its jurisdiction.

Three months after our initial request, we decided to check how the declared cost-control mechanisms actually worked and whether material prices had been adjusted. We therefore sent an inquiry to Kyivbudrekonstruktsiia for copies of the work acceptance certificates. In response, we received a refusal. The municipal enterprise cited “commercial secrecy,” “national security,” “risks to water supply,” and martial law. Yet none of these are lawful grounds. Work acceptance certificates are financed from Kyiv’s budget, and information on performed procurement transactions must be public. All materials and work volumes are already disclosed in the tender documentation, while the certificates only confirm their execution. Refusing to provide them is unlawful. We reported this to the Ombudsman’s Secretariat, which opened proceedings concerning violations of human and civil rights.

After the additional works contract was signed, our analysts once again alerted the procuring entity and the KCSA Audit Department about inflated material prices. No response has been received to date, and the actual contract value has not been revised.

According to the 007 analytical system, Kyivbudrekonstruktsiia has already paid TFM-Skhid LLC more than UAH 86 million for completed works.

Who is TFM-Skhid LLC?

According to YouControl, TFM-Skhid LLC was founded in 2018 by Tekhpidtrymka-FM LLC and Dmytro Pasichnyk. Last autumn, the company changed its owner to Alina Filonenko, but by December, she was replaced by Ihor Ihnatenko. Later, the owner became Dmytro Novhorodskyi. According to the Unified State Register of Declarations, a person with the same name and residence previously worked as a chief inspector at the State Inspectorate for Architecture and Urban Development in Sumy.

The tender for the reconstruction of sludge field dikes No. 1 and No. 2 of the Bortnychi Aeration Station was the first and only public contract for TFM-Skhid LLC. To confirm its experience, the company submitted two construction contracts with private firms — ATB-Market and Tekhpidtrymka-FM. An interesting detail: the contract with Tekhpidtrymka-FM was valid in 2019–2021, when both companies — the contractor and the procuring entity — were owned by the same person, Dmytro Pasichnyk.

The second contract was awarded without competitive bidding. The procuring entity’s justification stated that TFM-Skhid LLC’s equipment was already on site, and the additional works were related to the main ones, so they had to be performed by the same company. Moreover, having a single contractor responsible for quality was said to guarantee project integrity and help avoid potential disputes in the future.

How much does the reconstruction already cost?

In total, over the past seven years, contracts worth UAH 3.9 billion have been signed for the reconstruction of the Bortnychi Aeration Station. In addition to the sludge field works, other projects were contracted, including the reconstruction of the pumping station, repair of the primary sedimentation tank, pressure sludge pipelines, and aeration tanks. These contracts were awarded by Kyivvodokanal, with a combined value of almost UAH 1.5 billion. The largest procurement concerned the reconstruction of the first lift pumping station — initially contracted at UAH 525 million, later revised down to UAH 318 million after several years.

The Bortnychi Aeration Station reconstruction was originally planned to be financed through a Japanese JICA loan, with construction scheduled to begin in July 2021 and finish by 2027. These, however, were pre-war plans.

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.