Shelter Construction in a Kryvyi Rih Lyceum with Probable UAH 5 mln Overpayment on Rebars

On April 12, the Capital Construction Department of the Executive Committee of the Kryvyi Rih City Council concluded a contract with Sapsan-KR LLC for the new construction of an anti-radiation shelter on the territory of Kryvyi Rih Lyceum No.123. The cost of works amounted to UAH 57.65 million.

Sapsan-KR LLC was the only participant in the procuring transaction and offered a price 0.15% lower than the expected value.

The tender documentation included a requirement for participants to provide a visit and inspection certificate regarding the object as part of the tender bid. This requirement is potentially discriminatory because procuring entities can use it to narrow competition and create obstacles for participants they find “inconvenient.”

By the end of this year, the contractor is to build an anti-radiation shelter on the territory of Kryvyi Rih Lyceum No.123 on 18 Mykolaivske Shose Street, Kryvyi Rih.

In the estimates, a significant part of the funds falls on hot-rolled reinforcing steel of a periodic profile of class A-III of various diameters for UAH 53,203–53,235 per ton (all prices are indicated with VAT). Metinvest-SMC company sells such rebars at UAH 33,700 per ton, Iron World—at UAH 28,450 per ton (non-cash payment at UAH 31,864 per ton), and Stal Soyuz — at UAH 28,500 per ton.

Recently, the Capital Construction Department of the Executive Committee of the Kryvyi Rih City Council ordered the construction of kindergarten No.38, indicating in the estimate the need for rebars of class A-III, diameter 12 mm for UAH 39,579 per ton and rebars of class A-III, diameters 16-22 mm for UAH 42,769 per ton.

In April, the Department of Housing of the Dnipro City Council ordered major repairs of the roof and insulation of the facade of a residential building in Dnipro with rebars in the estimate for UAH 41,336 per ton.

*Average market prices were calculated as the average between product prices in the Prozorro e-procurement system and the commercial market

Thus, the overpayment on rebars alone might reach UAH 5 million.

Inflated prices can also be tracked regarding other items of the product title. For example, a deep-penetrating colorless primer Ceresit ST 17 was included in the estimate at UAH 81.6 per liter. The official website of Ceresit indicates UAH 62 per liter, which is cheaper by 24%.

The plain cement concrete M150 was calculated at UAH 3,540 per cubic meter. Ukrainian Product offers this solution at UAH 2,850 per cubic meter, which is 19% cheaper.

For such large objects, construction materials should be purchased in bulk. The cost should have been much lower than the price in a hardware store.

“It should be understood that the prices in the estimates of the construction contract are not always final. The final prices can be seen only in the certificates under which the procuring entity pays the contractor. In general, overpayments are more likely to happen when the cost is overestimated at the start of a procurement transaction. Especially when the tender documentation contains potentially discriminatory conditions,” comments Yaroslav Pylypenko, DOZORRO public procurement monitoring specialist.

This is not the first time that Sapsan-KR LLC has been awarded a contract by the Kryvyi Rih Capital Construction Department with inflated prices. As reported by Nashi Groshi, in early April, the department ordered the construction of a shelter for Kryvyi Rih Lyceum No.84 from Sapsan-KR LLC with a probable overpayment of UAH 6.56 million on construction materials. The material refers to inflated prices for rebars, mastic, cables, and lamps.

The owner of the Kryvyi Rih-based Sapsan-KR LLC is Bohdan Lymanskyi. Since 2016, the company has been awarded contracts worth more than UAH 303 million, including almost UAH 143 million in 2024.

DOZORRO will monitor the implementation of this contract and hopes that the procuring entity and the contractor will adjust the prices in accordance with the market ones.

This publication was prepared with the financial support of the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.