Mykolaiv water pipeline construction contract worth 7 billion awarded to three firms

In Mykolaiv, contracts for the construction of a water supply system were awarded to three companies without open bidding. The prices of the contracts are not yet finalized.

This was reported by Nashi Hroshi.

The Mykolaiv Oblast Infrastructure Restoration and Development Service ordered the construction of a water plant from the Southern Bug River and a municipal water supply system to supply water to the city of Mykolaiv without bidding. The total cost of the project is UAH 7.44 billion.

According to Proozorro, Avtostrada Group of Companies LLC will implement the first section for UAH 2.28 billion, the second section is entrusted to Ukrtransmist LLC for UAH 2.53 billion, and the third section to Rostdorstroy LLC for UAH 2.63 billion.

Open bidding was not held due to the urgency of the order caused by the significant damage to Mykolaiv's water supply system as a result of shelling in April 2022.

Damage to the main water supply line from the Dnipro River and water intake facilities left the city without access to a backup water resource that was supposed to be an alternative. Currently, water is supplied from the Ingulets Canal, but it does not meet sanitary requirements.

In 2023, after the Kakhovka HPP was blown up, the government adopted Resolution No. 566, allocating funds for the aftermath of the destruction, including the construction of new water pipelines in Zaporizhzhia, Dnipro, and Mykolaiv regions. It was assumed that the project would be financed by the European Investment Bank. However, there is no European funding yet, and the procurement was conducted without open bidding.

Contracts with contractors state that construction work should be completed by the end of 2024. However, the financing schedule provides for the main scope of work and expenses for 2025, and this year only minimal funds from the city budget are being raised.

Final contract prices may change as the development of technical facilities is not yet complete. Currently, the contracts do not contain data on the cost of pumps. They should be added when the design decisions are finalized.

The services of a consulting engineer for all three sections were ordered from V.S. Engineering LLC for UAH 4.47 million.

Vinnytsia-based Avtostrada Group of Companies, owned by Maksym Shkil, belongs to MS Capital, where Shkil is the founder and CEO. MS Capital consists of five companies: "Bekhivskyi Granite Quarry, First Logistics Company, Audi Center Odesa, Pryluky Agricultural Company, and Avtostrada itself. It recently won contracts to build a section of the Kyiv subway and the Mykolaiv district heating network. In total, since 2017, Avtostrada has received state contracts worth UAH 146 billion.

Kyiv-based Ukrtransmist is owned by Iryna Karnakova and is one of the founders (33.3%) of the Eurotransmist consortium, which is expected to be acquired by Ihor Karnakov. The consortium is part of a group associated with the Keloyev family, where Muslim Keloyev plays a key role. Among the active groups are Paid LLC, which supplies fuel to government agencies, including seaports, and European Road Construction Company LLC. Since 2017, Ukrtransmist has received public contracts worth UAH 10.6 billion, including the largest one from a customer in Mykolaiv region.

The ultimate beneficiaries of Rostdorstroy are currently Yuriy Shumacher, a member of the Odesa City Council representing the Trust the Deeds party, and businessman Yevhen Konovalov. They also own the Kyiv-based company Kyivshlyakhbud. Since 2016, Rostdorstroy has received tenders totaling 96.7 billion hryvnias, the largest of which was from a customer in Mykolaiv region.

In September, the government planned to raise donor funds for the construction of a new water pipeline for Mykolaiv. The construction was estimated at over eight billion hryvnias. To date, there are already preliminary agreements with international partners, including the European Investment Bank, to attract donor funds for the project.

Recently, Serhiy Sukhomlyn , Head of the Recovery Agency, announced the start of construction of a new water supply system in Mykolaiv. Work will begin in October, and the ambitious goal is to complete the project by August 2025. This water pipeline should restore a stable water supply in the city, which has been critically affected by Russian aggression.