Millions in the pipe: what the construction of a water supply system in Odesa hid

The construction of the water supply system in Odesa is still not completed. The project has already cost the budget more than a hundred million hryvnias, but the amount continues to grow due to additional work.

TheCenter for Public Investigations analyzed how this project is being implemented, who is making money on it, and why its cost is growing.

Project in the DREAM system

An infrastructure project is underway in Odesa - the construction of a main water supply system from Bahrytskoho Street to Frantsuzsky Boulevard. The first stage is currently underway - the section to Fontanska Road.

According to the DREAM system, the construction involves the renovation of worn-out networks and the improvement of water supply for residents of Malynovskyi and Prymorskyi districts. The customer is the Capital Construction Department of the City Council, which is also the balance sheet holder of the facility.

The project is officially active and included in the state and regional portfolios. The documentation has already been approved, and funding has been secured in full.

The estimated cost was about UAH 120 million. The bulk of the funds - more than 93 million - is planned for construction, and about 20 million more are related costs.

SCREEN SHOT: DREAM

Funding is provided from the state budget: in 2023, more than 45 million hryvnias were allocated for the project, and in 2024 - another 61 million.

Tenders and funds from the Russian aggression liquidation fund

In July 2023, a tender was announced through Prozorro. Two companies took part, and Avtomagistral-Pivden LLC became the winner. The initial cost of the work exceeded UAH 112 million, and it was planned to be completed by the end of 2024.

However, at the end of 2024, the customer signed additional agreements with the same contractor for the implementation of two stages of construction.

In 2025, they tried to hold another tender for almost a million hryvnias, but it was canceled.

During the work, it turned out that the original documentation did not take into account some of the necessary work. As a result, additional costs were required: almost UAH 56 million more for the first phase and more than UAH 26 million for the second. The project itself was included in the regional development strategy for 2021-2027 back in 2020.

SCREEN SHOT: Prozorro

After the outbreak of a full-scale war, funding became possible from the fund for eliminating the consequences of aggression. This is what raises the most questions. Experts emphasized that the funds that should have been spent on critical infrastructure are actually directed to a facility that serves new residential development.

It is about providing engineering networks for high-rises in the area of Frantsuzsky Boulevard and Fontan. As a result, the costs that would normally be borne by developers are covered by the budget.

At the same time, the economic return for the state looks doubtful - the potential tax revenues are not commensurate with the funds invested.

Vienna, connections with the authorities and contracts worth billions

Avtomagistral-Pivden LLC is one of the largest contractors of the state's Big Construction program. The company was founded in Odesa in 2006.

Among the founders are Austrian AP Construction Holding GmbH and Oleksandr Boyko. At the same time, Nashi Hroshi reported that the actual owner of the company may be businessman Oleksandr Zhukov, a former father-in-law of Roman Abramovich and one of the key representatives of the influence group that controlled Odesa through former mayor Hennadiy Trukhanov.

SCREEN SHOT: YouControl

During 2017-2026, the company received more than UAH 155 billion in public tenders, with the largest revenue in 2021 - more than UAH 37 billion.

Suspicions of embezzlement, collusion and bribery

The company has been repeatedly mentioned in criminal proceedings. In particular, law enforcement officers were investigating possible abuses during the construction of a transport interchange in Kyiv. In 2024, the company's offices were searched for tenders in different regions.

The company regularly comes under scrutiny by law enforcement agencies and is mentioned in criminal cases. In particular, we are talking about investigations related to the reconstruction of the 1.6 billion hryvnia Ivanivskyi overpass in Odesa.

SCREENSHOT: YouControl

At the same time, the court considered a complaint against the inaction of the Mykolaiv Regional Prosecutor's Office, which failed to enter information into the URPTI on the submitted application. The case file stated that representatives of the Ministry of Regional Development and the State Agency for Infrastructure Restoration and Development could have acted in collusion with the State Tax Service and involved controlled companies, including Ukrtransmist LLC, Rostdorstroy, and Avtomagistral-Pivden. According to the complainant, this group systematically passed bribes to law enforcement officers to conceal possible violations.

As of now, according to DREAM, the facility's readiness exceeds 97%, but the completion of the work is scheduled for the end of 2026.

Also last year, the Prosecutor General of Ukraine said that the suspicions in the case of the Odesa-based Avtomagistral-Pivden company were legitimate, well-founded and confirmed by the results of forensic examinations.

Анна Бальчінос