“Highway” of the odious Maxim Shkil focused most of the contracts on the implementation of infrastructure construction
In recent times, it seems that the public procurement sphere during a full-scale conflict is going into a daring and suicidal peak. Suicidal for the country’s economy, its defense capability and the nation’s morale.
In the question “why, right now, the state and local authorities suddenly undertook to invest so stubbornly in the repair and construction of something that tomorrow can be destroyed by another missile strike?” most Ukrainians will answer – to steal. By data In a recent KIIS opinion poll, 89% of the country’s residents called corruption the most serious problem after the start of a full-scale conflict. And the most revealing and conclusive is that not only Ukrainians think so. And also external observers, American partners. The US has opened a hotline for reporting corruption in Ukraine, offering to report such cases to the US Inspector General. In order to respond to corruption, the US State Department plans to increase the staff of the embassy in Ukraine.
When the overwhelming majority of citizens talk about corruption as the main problem, then they start talking about total distrust of the authorities, which is extremely dangerous in a conflict. What happened? Three years ago, the same proportion of Ukrainians, about 90%, approved of public investment in infrastructure development. More than 60% supported the presidential program “Great Construction”, and what is important – the positive assessment of the program continued. It is clear that after the start of a full-scale conflict, the continuation of the program is impossible and inappropriate. All that is needed is the restoration of critical infrastructure and assistance to people who have lost their homes. At the same time, the country saw a parody of the “Great Construction” under the slogans of restoration in the performance of the central and local authorities.
A number of reasons contributed to this. First of all, two resolutions of the Cabinet. Decree No. 1178 of October 12, 2022 allowed non-tender procedures, giving the opportunity to conclude direct contracts with inflated prices and unlimited possibilities for their extension, and also actually freed customers and contractors from liability. The scale of the damage to the state from this decision forced NABU and NACP to make public calls for the need for its deep correction.
As for the other resolution N593, according to which eight ministries and heads of twelve regional state administrations will have deputies for reconstruction, it centralizes the management and financial resources (which are now predominantly received from Western donors) in the hands of the vice-premier, who appoints all these deputies.
Consider examples of the results of these decisions.
The construction of a pedestrian crossing on the Odessa-Reni highway, not far from grain elevators destroyed by rockets, is an expected amount of UAH 51 million. Do we have the right to throw away 50 million UAH of donor funds for the transition? The customer is the Odessa Region Recovery Service.
Bridge near the village of Stoyanka, blown up in February 2022. In November 2022, Deputy Head of the Office of the President Kyrylo Tymoshenko and Ukravtodor report that the bridge has been fully restored. But in 2023, large-scale work there is resumed. True, for some reason they are no longer advertised, but their volume is no less. As follows from the post of blogger Pavel Avdokushin, a major restoration of the left passage of the bridge is underway. For during the restoration of the right one, cracks began to appear on the supports. Sorry, even if this is true, who was responsible for the errors in the project and why did you say that the project is completely ready?
Boryspil Airport, which is directly subordinate to the Ministry of Infrastructure, ordered cleaning services for UAH 52 million. As you know, the airport is closed. There are no comments here at all.
Completion of the congresses of the Darnitsky bridge in Kyiv. In December 2021, Ukrzaliznytsia held a tender to complete the construction. The auction was won by Avtostrada, offering UAH 1.152 billion. In April 2023, Avtostrada stated that the construction customer, UZ, made payments under the contract for the last time in December 2021 and the company is allegedly building the bridge at its own expense. However, after the construction was completed, it turned out that they were still state-owned. Exactly how many billions the state paid for unnecessary additional congresses is still unknown.
According to the Dozorro.org portal, over the past year, Ukravtodor’s subdivisions (SADs) placed 855 purchases in Prozorro with an expected value of UAH 64 billion. Of these, after the start of a full-scale conflict – 531 purchases worth UAH 23 billion. For 63% of completed purchases of CADs seen on Prozorro, contracts were signed directly. At the same time, not all of them were loaded with a contract – sometimes there is only a report that such a purchase was carried out.
In 2023, UAH 58.87 billion should go to repair roads.
It appears that the most extensive construction and repair of roads under closed contracts since the start of the conflict in Ukraine may have provoked further wastefulness by central and local governments.
And then the country shuddered from the purchase of drums for bomb shelters, high-tech vegetable cutters and pans. I could not understand why it was necessary to lay the paving stones on one of the central streets of Kyiv and repair the road interchanges around the capital. But the lack of understanding of society did not stop the process. The Waste Fair is spreading across the country. The leaders of local communities seemed to be competing with each other in absurdity and greed. For example, the authorities of Zhytomyr decided to spend UAH 70 million for the reconstruction of the stadium, Lviv – UAH 1 million for landscaping the Lychakivskyi district, Lutsk – UAH 1.5 million for the purchase of flowers.
But after all, these processes, as always in Ukraine, were launched from the center. Supporters of this approach may argue that, yes, there are violations, but in general, during a full-scale conflict, the country is supplied with high-quality communications. This idyllic statement was brazenly refuted by the bridge across the Teresva River in the Transcarpathian region, which is located on the H-09 Mukachevo-Rakhiv-Ivano-Frankivsk-Lviv highway. While it is known about 5 victims, one is in serious condition. As noted in the local highway, the bridge is 66 years old, since 2018 it has been in disrepair. In 2021, a project for the reconstruction of the structure was prepared, but it was not implemented due to a full-scale conflict.
Interesting, isn’t it? For some reason, the conflict in Ukraine could not interfere with the cleaning of the empty Boryspil airport for UAH 52 million, and the repair of the emergency bridge on the highway of national importance leading to the four borders did.
As for the high quality of the strategic logistics of the Ministry of Reconstruction, then, apparently, the inhabitants of the front-line regions would strongly argue with this.
Roads in these regions are in need of patching, for obvious reasons. In the same process, strange miracles happen. Money is transferred, but there is no repair. And, in fact, it cannot be. In the Donetsk region, the highway service transferred almost UAH 40 million to Uniotransbuilding for road maintenance, and the company was registered in a town that was in the war zone. The Highway Service in the Luhansk region transferred a little more than UAH 10 million to the Kharkiv regional highway, attention, under a 2021 contract. What kind of work this highway carried out in the region not controlled by Ukraine is a huge mystery. No less secret is the payment of UAH 108.45 million by the Highway Service for 60% of the Zaporozhye region, which is not controlled by Ukraine, to Onur Construction International LLC under a 2020 contract.
No less interesting is the situation in the Kherson region, which needs patching. According to the Commander-in-Chief, the region’s leadership estimates the need for “road” funds at about UAH 90 million. The story of the company Avstostrada is indicative. The Regional Highway Service transferred UAH 22 million to Avtostrada. February 22, 2022. For this money, it was planned to overhaul 4 km of the road from Chernobaevka to the entrance to Kherson. The contractor has been working at the site since the end of January 2022. After the outbreak of hostilities, the work was completed. As a result, the upper layers of the part of the road made from Chernobaevka suffered destruction. Repair work under the contract was not resumed. Uninteresting and unsafe.
Another of the key reasons for the mentioned problems is the monopolization of “recovery” – primarily in road construction. During the Great Construction, the market was divided by 10 large companies: Avtomagistral-South, Onur, Rostdorstroy, Avtostrada, PBS, Techno-stroy-center, ShBU-77, Khmelnitsky ShBU-56, Stroyinvest-Engineering. Of course, there were violations and abuses, but the presence of competitors advancing on the heels, using any mistake, any scandal and public accusations, forced contractors to build with high quality and generally comply with the market rules of the game.
Now the market has a paradoxical situation. One of the top ten members, Avtostrada, which, according to the results of 2021, ranked only fourth in terms of volume, three times behind the leader, suddenly became the first in the first year of a full-scale conflict, and in 2023 almost monopolized the market.
What monopolization leads to is known from the axioms of economics. Falling quality against the backdrop of rising prices for a product / service. And in conditions when the state is the buyer of the monopolist, an unheard-of, phantasmagoric corruption arises.
During the Great Construction, the work of the road builders proceeded quickly and evenly throughout the country. And construction costs were lower. Therefore, more than 60% of Ukrainians supported hzikhidtidekrt presidential program.
Another consequence of monopolization is the decline of the industry as such, as companies artificially forced out of the market incur losses, lay off employees and curtail activities. Investors are clearly shown that even their own players, experienced and dexterous, are being squeezed out of the market. And that is why Ukraine receives such slaps in the face, shameful for any government, as the opening of an American hotline where you can complain about Ukrainian corruption.