Billions in contracts, kickbacks and subsoil: who was awarded the Odesa-Kyiv highway repair?

The repair of the M-05 Kyiv-Odesa highway worth more than UAH 79 million was awarded without an open tender to a company that has been repeatedly involved in criminal proceedings. Law enforcement officers were checking for possible abuses, including kickbacks, the use of fictitious employees and illegal mining.

The Centerfor Public Investigations found out the details of this tender and the corruption risks that accompanied the contractor.

In Kirovohrad region, a contractor was selected to repair certain sections of the highway without holding an open tender. The client was the Service for Infrastructure Restoration and Development in Kirovohrad Oblast. The cost of the works amounted to UAH 79.3 million, which is allocated from the state budget as part of the road maintenance and development program.

SCREENSHOT: Prozorro

The contract was awarded to Rostdorstroy LLC, which offered to perform the work without reducing the cost. The procurement was carried out under a simplified procedure in accordance with the government decree in force during martial law. The need for this decision was explained by the urgency of the work and the impossibility of meeting the standard tender deadlines.

The repairs are scheduled to be completed by the end of 2026. This is an important transportation artery that connects the capital with the southern regions and plays a significant role in the transportation of goods.

According to the YouControl analytical system, Rostdorstroy LLC is owned by Yurii Shumakher, a member of the Odesa City Council, and Yevhen Konovalov, an entrepreneur. The co-founders also include the Austrian firm Jut Theme AU GmbH from Vienna. The company was established in 2005, and its main focus is the construction of roads and highways.

The company has been mentioned in journalistic investigations at least two dozen times and has received government contracts worth more than 88.5 billion hryvnias. The company recorded its highest revenue in 2012 - over UAH 21 billion.

SCREENSHOT: YouControl

Some episodes of the company's activities have already become the subject of criminal proceedings. In particular, according to a ruling of the Sviatoshynskyi District Court of Kyiv, investigators found that officials of the Kyiv Region Infrastructure Restoration and Development Service transferred over UAH 334 million to the company without holding open tenders.

These funds were used for the reconstruction of the Novokyivska substation and the construction of fortifications, while the total cost of the project exceeded UAH 2.4 billion. In addition, under a separate contract, the same company was additionally granted more than UAH 537 million for similar work.

The investigation found that Rostdorstroy LLC interacted with a number of companies that allegedly supplied metal structures at inflated prices. According to the investigation, some of the overpaid funds may have been returned in the form of so-called kickbacks.

SCREENSHOT: YouControl

As part of the investigation, documentation on the work performed, financial transactions and additional agreements was seized. It is also planned to check directly at the construction sites.

Another area of investigation concerns possible abuses in the field of urban improvement in Odesa. According to the ruling of the Kyiv District Court of Odesa, the company systematically received contracts without competition, and the cost of work in the contracts gradually increased.

An analysis of the documents indicates that the acts may have included works that were not actually performed. This could have led to the illegal use of budget funds.

Information about fictitious employment is being checked separately - people were hired only formally, but were paid a salary, which may indicate additional financial fraud. During the searches, law enforcement officers seized documents and property of the company, which was subsequently arrested by court order.

Investigators also received information about the possible involvement of the company's representatives in illegal mining. According to a ruling of the Kyiv District Court of Odesa, Rostdorstroy, along with the management of Municipal Roads, allegedly entered false information into documents. The company was virtually awarded contracts for the improvements without competition and won every time - for a total of more than UAH 209.7 million.

SCREENSHOT: YouControl

Investigators pointed to the systematic conclusion of contracts between the client and the contractor with a constant increase in the cost of work, as well as the possible inclusion of unnecessary work in the reporting, which could lead to overpayments from the budget. In addition, officials of the municipal enterprise are suspected of falsifying time sheets: salaries were paid to people who did not actually work.

Thus, a multimillion-dollar contract for road repairs was awarded without a tender - and this is just a fragment of a picture in which one company has been winning public contracts for years, despite its criminal background.

Also in March, a tender for the construction of a road in the Fontanska community was held without any competition between the participants - none of the companies tried to lower their price offer. The winner was a company with multibillion-dollar contracts and a dubious reputation.

Анна Бальчінос