In Odessa, officials will stand trial for corruption involving traffic lights

An investigation into a large-scale corruption scheme involving the procurement of uninterruptible power supplies for traffic lights has been completed in Odesa. According to the investigation, the city budget lost more than 20 million hryvnias due to artificially inflated prices and bid-rigging.

This was reported by the press service of the Bureau of Economic Security in the Odesa region. 

Seven members of an organized criminal group will stand trial on suspicion of embezzling over 20 million hryvnias in budget funds during the procurement of equipment for traffic light facilities in Odesa.

PHOTO: BEB in the Odessa region

As established by BEB detectives, officials from the Odessa City Council’s municipal institution “Specialized Installation and Maintenance Unit” and representatives of private businesses were involved in the scheme. According to the investigation, they organized a procurement mechanism through controlled companies that sold equipment at significantly inflated prices.

To ensure the desired supplier won, the scheme’s participants allegedly tailored the tender documentation to a specific company. Additionally, the expected procurement cost was determined based on fictitious commercial offers, which allowed them to significantly inflate the price even before the bidding began.

PHOTO: TU BEB in the Odessa region

The investigation claims that, in fact, the uninterruptible power supplies were purchased directly from the manufacturer, after which they passed through a chain of affiliated companies and were resold to the municipal utility at nearly double the price. According to law enforcement, the difference between the actual and paid prices was divided among the participants in the scheme.

The BEB reported that 11 such purchases were made in 2024 for a total amount of over 40.8 million UAH. At the same time, expert assessments determined that the Odesa territorial community suffered losses of nearly 21 million hryvnias, which amounts to about half of the total contract value.

PHOTO: BEB Office in Odesa Region

Currently, all seven suspects have been notified of the charges against them, and the indictment against the organized group has already been sent to court. There, the issue of their liability for the alleged embezzlement of budget funds will be decided.

In June of last year, the head of the municipal enterprise "Specialized Installation and Maintenance Unit" (SMEP),Petro Stoyanov, stated thatallegations of price inflation during the procurement and installation of uninterruptible power supplies for traffic lights were unfounded.

At that time, BEB detectives and prosecutors searched the premises of the SMEP municipal enterprise as well as the homes and summer cottages of the officials. The prosecutor’s office believed that during 11 procurement processes for these power supplies, from August to December 2024, the municipal enterprise selected a supplier that had inflated prices by five times.

Анна Бальчінос