Mykolaiv cuts funding for road repairs: collusion, inflated prices and lack of competition

In 2024, funding for road repairs in Mykolaiv dropped to UAH 240 million, which is half as much as the previous year. Three large groups of contractors used most of this amount.

This was reported by Nikcenter.

Road contractors divided the market among themselves, which almost completely eliminated competition in tenders. The analysis showed that such schemes can inflate prices for construction materials and avoid real control over the quality of work.

In 2024, due to a reduction in budget revenues, including the military personal income tax, spending on road repairs almost halved from UAH 449.7 million in 2023 to UAH 239.8 million. However, under these conditions, a significant portion of the budget went to companies associated with officials or deputies of Mykolaiv region.

The main problem is a catastrophic drop in the level of competition. While in 2021, at least 17% of tenders were held for two or more contractors, in 2023 there was competition in only 5% of procurements. In 2024, this figure dropped to 2.5%.

In addition, a significant amount of work was transferred to utility companies without open tenders. Last year, repairs announced by utilities also contributed to an increase in orders for road builders. Following the completion of road and sidewalk repairs by Mykolaivoblteploenergo, Mykolaivvodokanal, and Mykolaivelectrotrans, road companies received contracts worth UAH 57 million.

The journalists analyzed 247 tenders for the repair of roads, sidewalks and in-block passages. The analysis showed that each customer has its "favorite" contractors who receive the lion's share of the money.

For example, the administration of Zavodskyi district awarded 27 out of 40 public contracts to Sky-Town LLC. The company was established on the eve of the war, but has been steadily receiving public procurement for the second year in a row.

In the Central district, most contracts are supported by individual entrepreneurs registered in Chernihiv region who are connected to each other. For example, Arman Shahinyan, Artak Shahinyan, and Zorik Mkhitaryan started receiving orders immediately after registering their companies. The documents of these contractors indicate the use of common equipment, as well as a connection with PE "Shlyakhrembud №17".

In total, individual entrepreneurs associated with the private enterprise Shlyakhrembud No. 17 received contracts in Mykolaiv last year totaling UAH 71.6 million. Thus, Chernihiv residents were second only to local MP and millionaire Serhiy Shulhach in terms of funding.

Serhiy Shulhach's companies accounted for the largest share of last year's road repair spending. Private enterprises Mykolaivmagistral and Sovar Group Construction Company received contracts worth almost 105 million. This is 44% of the total cost of road procurement.

Thus, the bulk of the funds, namely 75% of the total amount of orders, ended up in the hands of three road groups. The budget for road repairs in Mykolaiv is controlled by several real owners who act through a network of related entrepreneurs or companies.

Recently, the company of a Mykolaiv MP signed an agreement to repair a road for more than three million. The contract was signed on December 19, and the selected contractor had until December 20, 2024, to provide the service. The contractor was Mykolaivmagistral LLC, owned by the Shulhachs. The first contract with this company was signed in March 2024. At that time, the cost of the work amounted to UAH 8.6 million. Since then, the terms and amounts have changed several times.

Earlier, in Mykolaiv region, a four-hundred-million-dollar contract for road repairs was awarded to the Odesa-based Rostdorstroy company, which is affiliated with the party of Odesa Mayor Gennadiy Trukhanov. The tender was held without a competitive procedure. The amount of the lot was reduced by four million.

Анна Бальчінос