Doubtful contracts for road repairs worth 800 million terminated in Odesa region

Prosecutors in Odesa Oblast have prevented the unjustified spending of almost UAH 800 million of budget funds.

According to the Odesa Regional Prosecutor's Office, this year prosecutors filed three lawsuits against the Odesa Regional Infrastructure Restoration and Development Service and contractors to terminate three pre-war road repair contracts. The total amount of these contracts was almost UAH 800 million.

The contracts included:

• reconstruction of a part of the M-28 highway bypassing Odesa for over UAH 100 million,
• as well as routine repairs of routes in Rozdilnyansky and Berezovsky districts, which were expected to cost about UAH 700 million.

However, the work has not started since 2021. The prosecutor's office found out that the contracts had been extended for three years without confirmed funding from the budget. In the course of the trial, all contracts were terminated, which prevented the spending of budget funds on these projects.

Meanwhile, Rostdorstroy, a company owned by a member of the Odesa City Council, was awarded another contract for road repairs in Odesa without an auction. For almost UAH 35 million, the company will restore the road surface after emergency repairs to heating networks in Odesa.

Prior to that, Rostdorstroy was entrusted with the repair of roads and sidewalks in Odesa worth over UAH 16 million.

The ultimate beneficiaries of Rostdorstroy LLC are currently Yuriy Shumacher, a member of the Odesa City Council and representative of the Trust the Deeds party, and businessman Yevhen Konovalov.

Last year, about 500 private commercial companies received almost UAH 150.5 billion from the state. Rostdorstroy LLC from the group is among the top five, having received UAH 7.6 billion in public tenders. The total value of the company's winning tenders is almost UAH 470 billion. The group includes two other companies that, together with Rostdorstroy, received UAH 8.8 billion in public funds.

The Center for Public Investigations has investigated the most expensive tenders in Odesa region in the spring published on Prozorro.

Rostdorstroy signed two contracts worth 2.6 billion in spring. One without the use of an electronic system and the other as a result of an open tender with specifics on the operational maintenance of public roads of national importance (different ones, not those that will be serviced by Avtomagistral). Since Rostdorstroy offered the lowest price, it was awarded the contract for road maintenance. The contract also runs until the end of 2026.