22.01.2025 Construction Corruption Tenders The Great Construction Program

Are Odesa residents without money for infrastructure repairs again?

The repair of the Ivanivskyi Bridge, one of Odesa’s key infrastructure facilities, will not take place. And not because of technical or natural obstacles, but because of a new corruption scandal.

The Economic Court of Odesa Region has ruled to terminate the contract between the city’s road department and Avtomagistral-Pivden, the company that was supposed to reconstruct the bridge. The court’s decision was the result of a detailed investigation that revealed a number of serious violations and abuses during the conclusion of this contract.

So why won’t Odesa residents receive the promised 1.61 billion hryvnia repair?

The first reason is “lack of budget funding”

The contract, signed in June 2022, provided for the reconstruction of the bridge for a record amount of UAH 1.61 billion. However, as the court found, at the time of signing the contract, Odesa did not have the necessary funds in the budget for these works. This means that the procurement was made without proper funding and without open bidding, which directly violates the law. Odesa residents and taxpayers thus witnessed how budget funds could be spent on questionable projects without any competition.

Failure of Avtomagistral-Pivden to meet the customer’s requirements

The next point is the contractor’s lack of the necessary material and technical means and technologies to perform such large-scale work.

According to the information provided by the court, the company was unable to confirm that it had the appropriate equipment and personnel with the experience to meet the customer’s requirements.

It seems that Avtomagistral-Pivden was simply not ready for such a volume of work, but this did not prevent the contract from being awarded.

Scandalous and ambiguous reputation of the company

“Avtomagistral-Pivden is a company that has repeatedly been the subject of investigations and even appeared in criminal cases. Over the past four years, it has won contracts worth more than UAH 150 billion through the Prozorro system, becoming one of the leaders in terms of the size of the deals it has concluded.

At the same time, the company withdrew most of its funds through conversion centers, leaving a minority for actual construction work. And even these works were carried out with violations – low-quality materials and numerous complaints from local communities.

At the end of 2024, the offices of Avtomagistral-Pivden were searched. The reason for this was suspicions of fraud in the company’s participation in government tenders, as well as its management’s ties to figures who cast a shadow on the reputation of the business itself.

By the way, Oleksandr Boyko, who controls Avtomagistral-Pivden, has been repeatedly associated with political and economic figures, including former Deputy Presidential Office Chief of Staff Kyrylo Tymoshenko and former Deputy Prime Minister Oleksandr Kubrakov.

Boyko is also credited with ties to Russian oligarch Oleksandr Zhukov, who controls the Odesa-based ROST group, which includes Rostdorstroy. This company, in turn, is a contractor for many projects in Odesa, and its ties to MPs and local authorities add even more suspicion to the situation.

Thus, Avtomagistral-Pivden is lobbied by a whole list of current officials and, most importantly, by the curators of the Big Construction, such as Yuriy Holyk and Tymoshenko, who help the company receive billions of dollars in tenders despite the criminal trail.

We have repeatedly sent materials to law enforcement agencies and investigating judges to reduce the influence of Avtomagistral-Pivden on road contracts.

Thus, the judges ruled in favor of the NGO Non-Stop, in particular:

  • Prymorskyi District Court of Odesa (case No. 522/9176/24) ordered the Odesa Regional Prosecutor’s Office to enter information into the URPTI;
  • Shevchenkivskyi District Court of Kyiv (case No. 761/21585/24) – the Bureau of Economic Security of Ukraine;
  • Oktyabrsky District Court of Poltava (case No. 554/6129/24) – the State Bureau of Investigation in Poltava.

And the Kharkiv Regional Prosecutor’s Office registered the information in the URPTI under Nº 42024220000000178 under Part 4 of Article 191 of the Criminal Code of Ukraine.

Thus, instead of the expected European-quality roads, the country received a short-lived pavement that required repair in a few months. And while some were counting their profits, others were left with broken roads and questions about who would be responsible for these abuses.

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