Huge amounts of money are spent on laying asphalt
The absence of potholes on the roads and the creation of thousands of jobs are harmoniously tied to corruption scandals, manipulation, and cartel "traditions." These are the realities of the road mega-repair in Ukraine, which is taking place within the framework of the state program "Large-scale construction>>". The peculiarities of the "road issue" were studied by journalists Klymenko Time..
The quality of roads in modern Ukraine has always been a big issue. Today, you can see how the asphalt laid down in a few years becomes covered with a web of cracks, resulting in potholes. In some cases, the repaired road slides right after a heavy rainstorm, as happened to the M-05 highway in Odesa near the village of Troitske in July. Troitske in July. Troitske in July. According to experts, the road issue, just like decades ago, has not gotten rid of its childhood diseases: lack of strategic planning, financial deficit and corruption, in which a large number of people are interested, from contractors to security forces and local officials. Let's take a closer look at the situation.
Manipulation and corruption
"Playing with data Last year, more than 4 thousand kilometers of national roads were built and repaired in Ukraine. This year, it is planned to do about the same amount. The figures are significant, although they represent a small percentage of the total national mileage, given that out of 167 thousand kilometers of roads, 90% are in need of repair, not to mention bridges, of which 99% need urgent repair or even reconstruction.
However, even the "victorious" statistics are a bit of a stretch, given the possibility of manipulating numbers and terms. For example, road builders include emergency repairs in the total number of scheduled repairs. This affects the amount of money spent, because it costs UAH 200 to fill a pothole, while scheduled maintenance of the same area costs several thousand or even tens of thousands of hryvnias.
Also in the column of repair of roads of "national importance" to improve statistics is added repairing local roads, which cost significantly less.
Bottomless barrel Even a schoolchild can understand that a lot of money is laundered on the roads today. The situation is as follows. According to former MP Vitaly Zhuravsky, Each region is assigned a "supervisor" - a deputy who, together with the governor, determines which firms should win tenders and how much of the kickbacks will go into the pockets of the MP and the head of the regional administration. Of course, this scheme includes a "tip" to the head of Ukravtodor, he told the publication "Gordon“.
There are a lot of schemes to use the funds. These include the purchase of cheap and low-quality bitumen, curbs, and storm drains at inflated prices. It also includes the installation of expensive bumpers, as was the case on one of Kyiv's boulevards, where the company installed a Vario Guard bumper for UAH 15 thousand per linear meter, while the purchase price in Europe was UAH 8 thousand per meter. Let's also add manipulations with fuel for the equipment. For example, according to the standards, a roller should conditionally roll the ground 10 times, but it does it only 3 times. It's the same with the number of trucks/walkers.
According to the lawyer Rostyslav Kravets, In general, road repairs are significantly overestimates.
- If you make the width of the road 10-30 cm narrower, can you imagine the volume per 100 km? And no one checks this. And who controls the thickness of the asphalt pavement? Yes, there are state commissions that accept roads, but I think that if you check this state commission, you will find a one-and-a-half or even two-fold discrepancy with the standards," he told Klymenko Time.
Road cartel
In addition to corruption, the Ukrainian road market is being oligopolized. This means that the number of participating companies is declining, as Viktor Medvid, director of William Invest Expert, a consulting company, told our publication.
- Accordingly, the lower the competition, the higher the prices. As a result, we can count on one hand all the construction operators who can easily work not for 2-3% profitability, but for 30-40%," he said.
Let's make a comparison. In 2019, the total amount of payments for medium and major road repairs amounted to UAH 28 billion 880.3 million, which was divided among 570 contractors. Of these, the top 40 contractors received almost 82% of all funds paid by Ukravtodor. At the same time, the five largest contractors received 42% of all the money. The largest amount of money, almost 20%, was received by Avtomagistral-Pivden LLC in 2019, according to "Word and deed“.
In 2020. the total amount of payments was significantly higher - UAH 85 billion. This time, the top 40 companies received UAH 90%, and the top five companies received UAH 51%. Avtomagistral-Pivden LLC became the leader again, receiving 20.3% or UAH 17 billion 282.9 million.
As of August 16 2021 р. The value of the tenders is UAH 115 billion 491.9 million, which is to be distributed among 42 contractors. The largest part is to go to Avtomagistral-Pivden LLC - 23.7%.
It is worth noting that the top largest players, or as it is also called the "road cartel," include the following companies. Among them: the Turkish company Onur Taahhut Tasimacilik Insaat Tic. ve San. A.S. and its related Ukrainian company Onur Construction International LLC; Rostdorstroy, which owns a significant share in RDS-Poltava LLC; ShRBU-48; Technobudtsentr; Avtostrada, a joint Ukrainian-German venture; Energetic Road Construction; and SUAP Intervias Ukraine.
Lack of strategy
The high cost, modest quality, and corruption do not paint a rosy picture of major road repairs. The creation of tens of thousands of additional jobs, which the government is so proud of. Rostyslav Kravets believes that the employment figures are greatly exaggerated, especially since all companies, including many foreigners, hire their own workers, as the government has virtually removed the requirement for the number of Ukrainians to be involved in road construction.
Viktor Medved is confident that there is no strategic approach until the problem is solved. According to him, roads are repaired on an ad hoc basis, depending on whether there is money or not. But this is wrong, as the problem needs to be solved comprehensively and at the state level, not on an ad hoc basis.
- Several questions need to be answered. For example, how many years will we build roads? How much money is planned to solve this problem, say, for 20 years? There are no answers. As a result, it turns out that we are building here and not building there. We often see that roads in good condition are repaved several times, while roads in disgusting condition have not been repaired for many years. We have several thousand bridges that are in an emergency or pre-emergency condition. So will we build one big bridge or many small ones? This is an open question," the analyst said.
One of the most important criteria, according to Medved, is public investment. They should be as efficient as possible, so that the money spent can be returned to the budget and reinvested by the state. And in this matter, a very important aspect is import substitution and vertical integration. The main goal of the "Big Construction" is to PR.
- And we spend a lot of money from the state budget on this, but, according to my estimates, we get 40-50% less than we could. And this is without taking into account the corruption component, - Viktor Medvid summarized.
Bottom line. The economy cannot develop without high-quality infrastructure, and therefore the construction of roads, the restoration of railway stations, airports, and railways is definitely a necessary goal. Ukraine has moved in the direction of "big construction". Even to the detriment of its own citizens, as evidenced by cuts in social spending and systematic withdrawals from the COVID fund. The question is, will the government be able to continue to follow the chosen line? Road construction requires huge amounts of money, but given the way the state is selling itself to big business, as well as internal political discord, the mega-project may slow down in the near future.
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