Drog-Bud won the bid to repair the T-14-04 highway
From November 27 to December 2, 66,000 messages about purchases worth UAH 11 billion were published in the Prozorro system, according to Our money.
Last week, tenders were announced for road and bridge repairs totaling 1.2 billion hryvnias, which is 11% of all purchases during this period.
A significant portion of this achievement came from a single contract to repair the T-14-04 Chervonograd-Rava-Ruska highway for 14.1 million euros (or 528 million hryvnias). This road leads to a major border crossing between Ukraine and Poland. Furthermore, it was not awarded through open auctions but was obtained through negotiation procedures due to additional work not included in the original project.
In 2017, the Lviv Road Service awarded the contract for repairing this road at an open auction funded through credit from Poland as tied assistance. At that time, four Polish companies participated in the auction, and Drog-Bud won the contract with a 10% discount. The deal was valued at 21.5 million euros.
The terms required the contractor to be responsible for both the facility's design and the completion of the work. It later became evident that due to various reasons, funding was delayed. As of September 2022, only 12% of the planned construction work has been completed. Essentially, the repair work under the five-year-old contract was hardly carried out. New open auctions could have been conducted to obtain a new price.
However, they took a different approach. On November 22, 2022, it was decided that there was a need to increase the work's cost to 28.6 million euros. This fully covered the discount Drog-Bud gave to win the auction and added an extra 5 million. Following this price increase from 21.5 to 28.6 million euros, they utilized a norm in Ukrainian legislation stating that the original contractor can be awarded a new contract for additional work worth up to 50% of the original agreement's price through negotiation procedures. If this 50% applied to the original price, the new contract should not cost 14.1 million euros, but half of 21.5 million euros. Thus, at this stage, they managed to secure about 4 million euros.
In Poland, Drog-Bud has been involved in road works since 1998. Their Ukrainian office in Lviv was established in 2016, during Slavomir Novak's leadership at Ukravtodor. At that time, Zdzisław Nowak headed the Polish company. Taras Sirotinsky, former head of the Lviv road service, worked at the Ukrainian office of Drog-Stroy. In 2020, he became an advisor to Prime Minister Denys Shmygal, and Novak was suspected of receiving bribes from Ukrainian contractors.
Top 10 largest purchases last week. Drog-Bud
Customer mln. Contractor Deal subject
1. Highway service in Lviv region 528.39 Drog-Bud Spolka z ograniczona odpowiedzialnoscia Major overhaul of the public highway of state importance T-14-04 Chervonograd-Rava-Ruska km 3+137 — km 56+307, Lviv region (additional construction works) UA-2022-11-29-008374-a-a1
2. JSC Ukrgasdobycha 164.27 LLC Anvitrade Diesel fuel UA-2022-11-30-014097-a-c1
3. JSC Ukrgasdobycha 129.15 LLC Martin Trade Diesel fuel UA-2022-11-30-014100-a-b1
4. Road service in the Zhytomyr region 96.67 SUNP Avtostrada LLC Not subject to disclosure in accordance with regulatory legal acts RU-2022-12-01-011913-a-c1
5. Ukrgazvydobycha JSC 223.48 K2 Energy LLC Diesel fuel UA-2022-11-30-014088-a-c1
6. State Enterprise “Roads of Kharkiv Region” 96.40 LLC “Parking+” Operational maintenance of public roads of local importance in the Kharkiv region RU-2022-11-29-008150-a-c1
7. JSC “Zhytomiroblenergo” 94.59 LLC “Zhytomyr Regional Energy Supply Company” electric power UA-2022-11-04-005550-a-c1
eight. Chernigovoblenergo JSC 83.33 Intex Invest LLC Fuel UA-2022-11-15-011472-a-b1
9. Branch “Production Support Center” JSC “Ukrzaliznytsia” 82.86 LLC “Trading House “Cable Center” Cable and wire products RU-2022-10-28-009629-a-b1
10. Branch “Production Support Center” JSC “Ukrzaliznytsia” 77.30 LLC “Trading House “Ukrkabel-Kyiv” Cable and wire products UA-2022-10-28-010069-a-a1
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