«Renesans» without money: how the road cartel is taking apart billion-dollar tenders in Prozorro with «zero» financing

«Renesans» without money: how the road cartel is taking apart billion-dollar tenders in Prozorro with «zero» financing

From May 10 to 15, 69 thousand procurement notices worth UAH 30.86 billion were published in the Prozorro system

Road repairers are experiencing a certain renaissance. Last week, the regional services of the Restoration Agency signed contracts for routine repairs and operational maintenance of roads worth UAH 5.27 billion, which is one-sixth of all procurements in Ukraine.

Top 10 largest procurements of the past week

Moreover, all contracts were divided among companies that were the main contractors of Ukravtodor during the “Big Construction”. These are “Avtomahistral-Pivden”, “Rostdorstroy”, and “European Road Construction Company”, which later joined the ranks of the less prominent favorites of the authorities.

Construction contracts are being actively snapped up even without funding

It is indicative that virtually all contracts are being concluded without proper funding for 2026. In billion-hryvnia contracts for operational road maintenance in Chernihiv region for the next three years, it is stated that only UAH 30 million out of UAH 1.9 billion has been allocated for this year, with the rest planned for the following two years.

The situation looks even worse when routine repairs are ordered.

For example, there is a contract with “Avtomahistral-Pivden” for the repair of the N-12 Sumy-Poltava road on the section km 92+449–km 106+116 worth UAH 231 million. It was concluded in early May. However, only preparatory works worth UAH 100 thousand are planned for this month. The remaining quarter of a billion is deferred to next year.

The situation is even worse in the contract with “Rostdorstroy” for the repair of the M-14 Odesa – Melitopol – Novoazovsk road on the section km 85+000–km 92+605 in Mykolaiv region worth UAH 168 million. It states that all works must be completed in 2026. However, no funding is provided for this year at all – the contract shows “zero hryvnia”.

Yet this does not prevent some from boldly starting work without money

For example, in Kirovohrad region, on May 14, a tender was announced for routine repair of the N-14 Oleksandrivka-Kropyvnytskyi-Mykolaiv road, km 1+300 – km 3+400, km 5+600 – km 26+500 (separate sections), with an expected value of UAH 450 million. There are still no bids, and submissions are open for another week. However, one of the readers of “Nashi Groshi” drove through the section km 1+300 – km 3+400 this weekend and recorded a video showing that works are already in full swing. The entire top layer of old asphalt has been milled, as provided for by the tender conditions.

Thus, someone from the market participants has already deployed equipment and workers in “RDS” vests to the site before the bidding ended, without money and without a clear indication of the work financing schedule in the tender documentation. It was simply not published.

The issue of planned financing at the bidding stage is important. Normal market participants simply will not bid in a tender where there is effectively no “physical” money. Those who submit bids and win contracts without competition have confidence or hope for quick funds. That is why they win tenders without money, but also without competitors.

Svyrydenko and Sobolyev want to destroy competition in construction tenders

According to “Nashi Groshi”, this may have the following explanation. The Ministry of Economy under Oleksiy Sobolyev, on the instruction of Prime Minister Yuliya Svyrydenko, is currently preparing amendments to the government’s “regulations” governing the tender procedure (1178) and the General Conditions for Concluding and Performing Construction Contracts (668). The intention is to exclude payment terms from the essential conditions of contracts. This will allow changing these conditions after concluding agreements with the tender winner.

In essence, this opens the door to massive manipulations. Tender documentation will deliberately include meager funding or inadequate payment terms (for example, 90 days after the end of martial law, which will happen at an unknown time, see the recent example of “Kyivavtodor”). Accordingly, this will deter ordinary market participants. But insiders in collusion with the contracting authorities will be able to change the payment terms after the bidding to ones favorable to them (for example, 30% advance payment and settlement within a week after closing the certificates of completed works).

Thus, this will again allow the official “cartelization” of the market, dividing it into “insiders” close to the customers and everyone else. The NACP has already concluded that

“This increases corruption risks in the field of public procurement by creating opportunities for contracting authorities to establish conditions that give preference to certain business entities.”

Also, conducting a large number of road tenders now, before the end of hostilities, ensures the absence of international companies at the auctions, which will come to Ukraine after the war ends.

Other plans to dismantle the transparent procurement system in construction will be reported additionally.

Author: Yuriy Nikolov, “Nashi Groshi”