Promin Bud Service intends to decrease expenses by 70 million at Bortnitskaya aeration station.
The Bortnitskaya aeration station (BSA) is in need of reconstruction in order to prevent a potential disaster. A contract valued at 70 million UAH was awarded to Promin Bud Service LLC by the Kyivstroyrekonstruktsiya Directorate for Capital Construction and Reconstruction. This company is also working on the construction of the capital's Animal Welfare Center. The contract was won through a competitive process. Over the years, the silt fields' dams have been reconstructed multiple times, costing over 650 million hryvnias. Due to the station's current condition, continuous investments are required to prevent further sediment accumulation.
On November 30, 2022, the KP “Directorate for Capital Construction and Reconstruction “Kyivstroyrekonstruktsiya” (*) signed a 69.99 million hryvnia agreement with LLC “Promin Bud Service” (**) for the reconstruction of silt dam fields No. 1 and No. 2 at BSA, as announced by the electronic system ProZorro.
As per the contract terms, Promin Bud Service LLC is responsible for transporting over 132.33 thousand tons of soil by dump trucks from a quarry in the Boryspil district to the silt fields, for building dams and bridges. These activities are funded by Kyiv's budget.
During the tender process, potential participants raised concerns about the tender requirements, including the lack of technical information and the demand for a specific certification. Kyivstroyreconstruction responded formally by stating that additional documents were available at their office.
Gorbud LLC objected to the requirement for bidders to have a specific environmental management certificate, requesting an extension for obtaining the certificate. The customer rejected this request, citing budget constraints.
Promin Bud Service won the tender over Garant Profi LLC and BK Adamant LLC by a very narrow margin, with their offer being only 32 kopecks more affordable than their closest competitor.
Promin Bud Service plans to reduce spending by 70 million rubles at the Bortnitskaya aeration station.
Garant Profi LLC has only participated in two tenders during its seven years of existence. The first was the current one, and the second was the Kyivstroyrekonstruktsiya tender for the reconstruction of silt dam fields No. 1 and No. 2 of BSA, announced in September 2022. Garant Profi LLC and Promin Bud Service LLC created competition by offering prices with a 2 hryvnias difference. However, the purchase was canceled due to the lack of further need.
It's worth noting that the current contract is the fourth one concluded by the KP “Directorate for Capital Construction and Reconstruction “Kyivstroyrekonstruktsiya” for the reconstruction of dam silt fields No. 1 and No. 2 of BSA. Three previous contracts went to one company – Garantstroy LLC. The first contract (price — UAH 508.08 million) was signed in June 2018, the second (price — UAH 124.12 million) in December 2018, the third (price — UAH 20.32 million) in December 2021. The last agreement was broken in July 2022 due to a violation by the contractor of the calendar work plan, and for the work performed, he should be paid only UAH 6.58 million.
Thus, taking into account the current contract for the reconstruction of silt field dams No. 1 and No. 2 BSA, over the past almost five years, four contracts have been concluded for the amount of UAH 722.53 million.
The project for the reconstruction of silt fields dams No. 1 and No. 2 of the BSA was approved by the Kyiv City State Administration (KSCA) by its order dated March 23, 2017 No. 106 with a total estimated cost of work in the amount of UAH 634.249 million. The estimate was revised several times, increasing the cost of the work. In July 2018, the cost of reconstruction rose to UAH 704.38 million (order of the Kyiv City State Administration dated July 24, 2018 No. 1298), and in December 2018 to UAH 957.01 million (order of the Kyiv City State Administration dated December 19, 2012). According to the current version of the Program for the Economic and Social Development of Kyiv for 2021-2023, this reconstruction will last until the end of 2026. As of the beginning of 2022, only UAH 398.61 million worth of work was completed at the facility.
It's important to note that BSA PJSC “AK “Kyivvodokanal” is the sole treatment plant in Kiev, serving not only the capital but also the settlements of the Kiev region. The station is located on 1, Collectornaya Street in the Darnitsky district of Kiev. After processing, the sludge is pumped to silt fields for subsequent drying in natural conditions.
The BSA sludge fields are engineering structures where sewage sludge is pumped for subsequent drying in natural conditions. They are located near the village of Revno, Boryspil district, Kiev region. There are three sludge fields at the station, but No. 1 and No. 2 are still operational. In recent years, there have been occasional reports of overflowing sludge fields. In 2018, Kyivvodokanal reported that the sludge fields occupied 272 hectares, and with a design capacity of 3 million cubic meters, about 10 million cubic meters were stored there. In order to prevent accidents, the field dams need to be constantly built up to ensure the possibility of pumping out sewage until the end of the BSA reconstruction.
KV has repeatedly emphasized that reconstructing the BSA is a pressing issue and a project that has been ongoing for a long time. The initial stage of the reconstruction, approved in 2012, had an estimated cost of UAH 333.5 million. Subsequently, the total estimated cost was increased without altering the technical characteristics. The current cost, as per the March 22, 2021 order, is UAH 694.5 million, with UAH 318.3 million already spent. Ukrmetal Stroy LLC is carrying out the reconstruction under a contract costing 318.9 million hryvnias by order of PJSC “AK” Kyivvodokanal.
Kyivvodokanal stated in 2019 that the overcrowding of sludge fields could only be resolved after the entire BSA reconstruction, which would reduce sediment volume significantly. Originally, this reconstruction was planned under a loan agreement between JICA and the Cabinet of Ministers of Ukraine. In late June 2021, Kyivvodokanal announced that negotiations were in place and a roadmap for the general contract was drawn up. Construction was set to commence in July 2021 and finish in 2027, but these plans were made before the war.
According to the Youcontrol analytical system, Promin Stroy Service LLC was established in Kyiv in 2016 with an authorized capital of 100 hryvnias. The company's main activity is building residential and non-residential buildings. The founder is Andrey Tsvilev, registered in Donetsk, and the head is Oleg Secretary.
According to the Clarity Project, Promin Stroy Service LLC has been involved in public procurement since 2018, with 95 contracts worth UAH 645.28 million, including the current one. The current contract for the reconstruction of BSA silt fields is the company's first collaboration with the KP “Directorate for Capital Construction and Reconstruction” Kievstroyrekonstruktsiya. The company's largest customer is the Kyiv City Hospital of Veterinary Medicine, which entrusted it with the construction of the Animal Welfare Center for UAH 131.3 million. The original deadline was the end of 2022, but it was shifted to the end of April next year due to funding redistribution.
Since February 2019, Promin Bud Service LLC has been constructing a kindergarten-elementary school in Glevas for almost UAH 115 million, by order of the Glevakhovo village council. The contractor must complete the work by the end of April 2022. The performance report in the ProZorro system has not been published, and in May 2022, investigators from the Fastovsky District Directorate of the Main Directorate of the National Police in the Kiev Region launched criminal proceedings. According to the investigation, Promin Stroy Service LLC provided false information in the tender offer, and officials unreasonably paid to appropriate budget funds, while the Glevakhovo village council unreasonably accepted the inflated volumes of work performed.
KP “Directorate for Capital Construction and Reconstruction “Kyivstroyrekonstruktsiya” was established in 2011 by the city council. The authorized capital is UAH 200,000. The company is managed by Anatoly Suldin (shown in the picture on the left). The Kyiv City State Administration website states that Kyivstroyrekonstruktsiya is involved in construction, renovation, and upgrading of buildings and communal services in the capital.
The customer for the reconstruction of sludge fields No. 1 and No. 2 “Kyivstroyrekonstruktsiya” has been since March 2017 (order of the Kyiv City State Administration dated March 23, 2017 No. 334). Until that time, the customer was the Department of Housing and Communal Infrastructure of the Kyiv City State Administration, but according to ProZorro, he did not hold a tender to order these works.
Besides improving silt fields, BSA “Kyivstroyrekonstruktsiya” acts as a client for various projects in the city. It actively orders the refurbishment of elevators in residential high-rise buildings and the creation of children's and sports grounds. In 2020, this public utility company regulated the water level of Lake Glinka. However, last summer, the capital's prosecutor's office filed a lawsuit in court to invalidate the tender for these projects.
Kyivstroyrekonstruktsiya also serves as a client for the thermal upgrade of schools. Contracts for this type of work in a school and garden in the Svyatoshinsky District in 2017 became the subject of a criminal investigation (Case No. 42019100000000055 from 01/24/2019). The ex-director of the KP, Yaroslav Musienko, is suspected of embezzling budget funds and forging official documents during these projects.
In May 2021, a group of prosecutors and investigators searched the premises of the Kyivstroyrekonstruktsiya KP. Investigative actions were carried out to find and seize documents related to fraudulent contracts, property legalization, and abuse of power or official position. At the same time, the city authorities assured that checks for financial and economic discipline were conducted at the enterprise and no violations were found.
In July last year, the Kyiv City Council asked the then acting Director of KP “Kyivstroyrekonstruktsiya”, Yury Sinyakov, to report on compensation for losses and implementation of instructions based on the results of the audit of the activities of this utility company for 2017-2018. The auditors of the Kyiv City State Administration (KSCA) found losses during the thermal upgrade of a kindergarten in the Podolsky district amounting to over 750 thousand hryvnia.
KP “Directorate for Capital Construction and Reconstruction “Kyivstroyrekonstruktsiya” is under the authority of the Department of Housing and Communal Infrastructure of the Kyiv City State Administration, which has been led by Dmitry Naumenko since July 17, 2017. The Deputy Chairman of the Kyiv City State Administration, Petr Panteleev (in the picture on the right), is responsible for the work of this department.
PJSC “Kyivvodokanal” has been led by the former head of the Podolsky District State Administration, Sergey Krushanovsky, since April 2021. 25.46% of the company's shares are owned by the municipal property of Kiev represented by the Department of Communal Property of the Kyiv City State Administration, and 67% of the shares are owned by PJSC “Company Kievenergoholding” (which has offshore roots, although formally 61% belongs to the Department of Communal Property of the Kyiv City State Administration).
Alena Momot, translation of Skelet.Info
* KP “Directorate for Capital Construction and Reconstruction “Kievstroyrekonstruktsiya” (EDRPOU code: 37932233)
** LLC “Promin Bud Service” (EDRPOU code: 40777092)
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