14.03.2025 Kharkiv Tenders

Empire Zhilstroy-1 in Kharkiv. Construction of a shelter at Lyceum No. 105

Файл:ХЗОШ 105 (Харків).jpg — Википедия

In Kharkiv, the fight continues not only against the enemy, who attacks the city and its surroundings every day, but also against the local authorities, who have managed to fill their own pockets with millions over the 3 years of war. This time, the case concerns the construction of an underground shelter for Lyceum #105, which will cost the city 100 million hryvnias. At the same time, the potential overpayment for certain materials alone could amount to up to UAH 2.5 million.

Shelter project: for whom and how much?

On February 6, 2025, the Department of Improvement of the Kharkiv City Council signed a contract with Trust Zhilstroy-1 to build an underground radiation protection shelter for Lyceum No. 105. According to the project, the shelter is designed for 450 people and is to be equipped with an autonomous power supply, air filtration system, evacuation exits and a fire protection system. The price of the project seems to be significantly overestimated. A detailed analysis of the estimate revealed numerous irregularities that could lead to millions in overpayments.

Overestimation of the cost of materials

One of the biggest issues is the overpricing of construction materials. For example, the price of B30 M400 concrete specified in the contract is UAH 4,804 per ton, while on the market it costs UAH 3,600-3,900 per ton with delivery. That is, the price difference is up to 25% of the market value.

A500 class rebar was included in the estimate at a price of UAH 45,840 per ton, although suppliers offer it at a price of UAH 31,800-40,000 per ton, which is 20-40% cheaper. Similarly, prices for asphalt concrete, waterproofing materials, power cables and ventilation systems are similarly inflated – on average, 30-50% more expensive than those of suppliers.

Tender without competition

Another disturbing feature of this project is the absence of competition in the construction tender. Only one company, Trest Zhilstroy-1, received the order, which gives it freedom to set prices. Under such conditions, the contractor has the opportunity to set prices for materials and work without any competition, which leads to a significant overestimation of the project cost.

But this is not the first time Trest Zhilstroy-1 has been at the center of scandals. It has already been involved in investigations into the embezzlement of budget funds during the construction of fortifications in Kharkiv and Donetsk regions. According to the investigation, the company’s officials, together with government officials, inflated prices for the purchase of materials and made fictitious payments. In addition, we have repeatedly written about the monopolization of public procurement by the company and its lobbying by the Kharkiv Regional State Administration and the Kharkiv City Council.

For example, since 2016, Trust Zhilstroy-1 has received public contracts worth UAH 9.31 billion. In a time of war, when every million hryvnias must be spent on defense and reconstruction, corruption schemes that allow for excessive profits on budget funds look particularly cynical.

If the tender and construction work continues at the same inflated prices, it could lead to a significant overpayment, which would ultimately affect the financial capacity of the frontline city and its budget.

This scandal is another important reason for a detailed review of public procurement by the Kharkiv City Council under Terekhov and Sinehubov. Tightening control over spending on construction and other strategically important projects should be done now. However, knowing who is behind the activities of the local authorities.

We have filed a complaint demanding to check tender procurement with the participation of controlled companies – JSC “TRUST ZHYTLOBUD-1” and JSC “PSAEM”, to terminate contracts with these companies and to bring the perpetrators to justice. Based on the previous materials, the State Bureau of Investigation in Poltava has already initiated proceedings under No. 620231700200000758, and the Kharkiv Regional Prosecutor’s Office under No. 42023220000000165, Part 4 of Art. 191 of the Criminal Code of Ukraine. But where is the result?

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