Overpriced construction of lyceum shelter in Pivdenoukrainsk reveals millions in overcharges

A contract was signed in Pivdenoukrainsk for the construction of a shelter for a lyceum. The tender was held without a competitive procedure, and the contract was awarded to a company that has been repeatedly found to have inflated prices for materials.

According to the Dozorro monitoring portal, the Department of Urban Development, Architecture and Capital Construction of Mykolaiv Regional State Administration has selected a contractor to build a shelter at Lyceum No. 4. The tender was won by First Ukrainian Construction LLC, and the contract value was UAH 70.7 million.

The company has committed to building a shelter for the lyceum in Pivdenoukrainsk.

Screenshot: Prozorro

A significant part of the cost estimate is hot-rolled reinforcing steel of class A-III of various diameters, which costs 46,958.58-50,310.18 UAH/t (including VAT). Prices of this material from other suppliers are significantly lower: "Metinvest-SMC offers it at 33,500 UAH/t, Iron World at 31,849-35,389 UAH/t, and KT-Stal at 36,990-37,920 UAH/t. In this position, the overpayment could reach UAH 3.9 million.

Prices for other materials also look overpriced. For example, the winning bidder will supply concrete mix B25 (M350) at UAH 4,906.30 per cubic meter, while Kovalska will sell it at UAH 3,513.00 per cubic meter, NiRaise at UAH 3,340 per cubic meter, and Mykolaiv Concrete Products Plant at UAH 3,774 per cubic meter.

The potential overpayment for construction materials could amount to about UAH 6 million. In addition, the cost of the contract is dynamic and may change during the execution of the work. For large-scale projects, construction materials are usually purchased in bulk, which allows for lower prices than in retail. Instead, First Ukrainian Construction LLC offers materials at prices that exceed even retail prices. The company was the only bidder in the tender, and its offer was only 3% lower than the expected cost.

According to the YouControl online analytical system, the company was founded in Kyiv in September 2022 by Denys Ryzhkov. In March 2023, Serhiy Tkachenko became the owner. After that, the company received its first contract to repair the basement of the Hvozdychka kindergarten in Voznesensk, and since 2023, contracts worth UAH 157.6 million.

The company has been featured in several journalistic investigations. The company has already earned UAH 179 million 164 thousand 766 in public procurement in 2023-2024. Mostly on the repair of shelters for hospitals and educational institutions.

Screenshot: YouControl

This is not the first time the company has been involved in the construction of shelters. However, experts have repeatedly recorded possible overpricing of materials. In September 2023, a similar situation was recorded in the estimate for the construction of a shelter for the Oleksandrivsk Lyceum. In July 2024, journalists also reported on alleged overpayments in the construction of a shelter for the Prybuzkyi Lyceum. After an audit and an appeal to Dozorro, the procuring entity canceled the procurement.

In 2024, more than UAH 775 million was allocated to restore the infrastructure destroyed by the Russians in Odesa and Mykolaiv regions. Some buildings cost tens of millions to rebuild. And where there are multimillion-dollar tenders, there is likely to be overpricing. Intent has investigated the cost estimates for the restoration of residential high-rise buildings that cost the most.

Анна Літман