After the full-scale invasion, the scheme of corrupt earnings in Ukraine underwent a certain transformation. The profit margin made on asphalt within the framework of President Zelenskyy’s Great Construction project was no longer converted into under-the-table salaries for pro-government officials, as large-scale road repairs stopped, and those that remained were scanty compared to pre-war times. The scandal with the MoD contract on overpriced eggs for the army prevented the establishment of a feeding trough for non-lethal procurement by the Ministry of Defense. And the constant attention to civil construction with its alchemical estimates has led to the draft law 11057 on the obligation to publish prices of construction materials in the Prozorro procurement system.
However, the authorities, accustomed to luxuries, on the one hand, preserved the old ones, and on the other hand, found new niches for shadow earnings:
- Customs benefits and tax “nuances” (“eternal classics” with modifications for new money flows);
- Law enforcement racketeering (flourished under the pretext of “you need money for secret operations against Ruscists, which we cannot officially finance from the state budget”);
- “Igorka” (flourished, among other things, due to the spread of gambling addiction among the military, and thanks to the prolonged dizziness of the National Bank and other financial controllers who “did not see” the huge flows of money going through payment systems);
- Tobacco (Ukraine was flooded with trays of excise-free cigarettes and TV channels loaded with them, and the security forces were not even interested in looking at it);
- Weapons (procurement of domestic drones was immediately moved into the shadows outside of Prozorro, price control was left to chance, and imports were and are non-transparent to all but the “chekists”);
- Non-transparent construction because, as you know, if you want to steal, start building.
We will focus on the latter point in this article.
By and large, Ukraine has the following types of construction at public expense.
Shady road construction. It is carried out according to the rules that Oleksandr Kubrakov, former Minister of Infrastructure, introduced during the Great Construction of President Zelenskyy and Yurii Holyk. This is when the estimated prices of construction materials are hidden along with the estimates themselves, and everyone is left with the figure “how much it costs to asphalt a square meter of road.” In the context of cartel-style price fixing, this is an ideal way to inflate prices because no one will see what price you have written for a square meter, and competitors will not drive the price down. During the year-long management of Mustafa Nayem’s team at the State Agency for Reconstruction and Development, no changes were made to this procedure. Therefore, this potentially remains an interesting niche for earnings when money flows into road construction. But right now, there is no money, and even the Road Fund itself, which used to collect money for asphalt, has been destroyed.
Non-military, non-transparent. At the same time, Nayem’s team made a lot of efforts to squeeze out excessive margins from contracts for the reconstruction of damaged housing and other social infrastructure. First of all, this was done through the mandatory publication of estimate documentation at all stages. Now, when the customer publishes the estimates, Nashi Hroshi spends more time and energy looking for inflated prices. Yes, we still continue to find them, even in projects funded by the UN and the European Investment Bank, not to mention projects funded from the Ukrainian budget. Even at the Okhmatdyt children's hospital, it was planned to cut the money of philanthropists into shares and misappropriate it. However, it is becoming increasingly difficult to find such gems.
Untransparent civil engineering. Of course, many did not perceive this trend as a new modus vivendi, and instead began to hide their estimates. For example, last year, the Kyiv Veterans Hospital published estimates of its renovation worth a billion hryvnias, overstating the price of construction materials by 2–4 times, and this year it simply did not fill in the price column.
Some do it boldly, while others try to save face. For example, the Zaporizhzhia regional administration refused to provide journalists and a people’s deputy with estimates for the construction of school shelters worth half a billion hryvnias because of... a power outage. They said they could not turn on the printer to print out a few tables.
Another “life hack” is to hide the names of construction materials in the estimate. For example, some glue for millions of hryvnias may be mentioned without a brand or manufacturer. That's it, it's impossible to establish price reasonableness without an on-site examination. This was done in the estimate for the repair of a hospital in Kryvyi Rih worth UAH 1.3 billion, which has just been given to Yurii Holyk's protégé firm that featured in the Bigus.info investigation.
Military construction outside of ProZorro. For obvious reasons, the details of military construction, such as addresses, design solutions and contractors, should remain secret. However, none of these circumstances should be an obstacle to disclosing the prices of construction materials. The enemy will not get anything if the customer reports the price per ton of rebar or meter of barbed wire without specifying the number of these units and the addresses of these facilities. This is an exclusively commercial secret, which is so convenient for “overpriced egg contracts” to germinate. Or for wood logs at 11,000 UAH per cubic meter, which is three times the market price, as it turned out in the fortification projects of the Mykolaiv Regional Administration.
The subordinates of Vitalii Kim, head of the Mykolaiv Regional Administration, provided data on the prices of their construction materials, which turned out to be so extravagant that, at the request of the Anti-Corruption Action Center, the Specialized Anti-Corruption Prosecutor’s Office and the National Anti-Corruption Bureau even initiated criminal proceedings (№42024000050000025) under Part 5 of Article 191 of the Criminal Code – misappropriation of budget funds on an especially large scale.
We hope that the investigation will not take into account Kim's strange explanations for the inflated prices: he simply photoshopped the page of Nashi Hroshi to show how he thought our article should look like. This is not a joke. This is a photographic fact.
Energy construction outside of ProZorro. It began after the Russians started attacking our energy sector in 2022. The main areas of spending were the construction of anti-drone protection over electrical facilities by Ukrenergo, the State Agency for Restoration and Ukrhydroenergo. Here, with the government's blessing, everything is non-transparent because of the military implications of the construction. And they took advantage of it.
For example, Ukrhydroenergo closed all data on a 4-billion-hryvnia contract with a company whose main achievement was previously repairing schools in the Zhytomyr region.
The State Agency for Restoration and Ukrenergo at different times showed the prices of building materials for the anti-drone covers. However, the secrecy of the projects themselves left a lot of room for guesswork and the attention of investigators. There is currently no data on the comparative examination of the projects with the scope of work. Nashi Hroshi cannot conduct such an examination, as the projects themselves are under seal for mere mortals.
So, although construction remains a possible way to make billions in income without working, it is becoming increasingly dangerous to earn a margin there. That's why a new story performed by Energoatom at a cost of $5 billion is rushing to the rescue.
The “great laborers” have high hopes for the project to complete two power units at the Khmelnytskyi nuclear power plant (KhNPP). Their construction began in the Soviet times and was abandoned in the 1980s. Forty years of rain, snow, weathering and corrosion seemed to leave the long-term construction units no chance. But no, the project has been resurrected and is closer to completion than ever, as it is ideally suited to all the tasks of the Presidential Office.
This is an instant launch of the “Great Concreting.” Of course, it will take ten years to build those power units, if not more. But all this time, the concrete will be poured, the certificates of completion will be paid for, and the margin will drip into your pocket. We are definitely talking about tens of billions of hryvnias in the coming years. They will not be spent on fortifications in the east or on power equipment that is needed now for this winter and for distributed generation. This money will be spent on something that may work someday in the future, but maybe never.
What is very important is that this will be a non-transparent story. All construction projects related to the recovery from Russian shelling are already covered by all levels of protection under government regulations. Therefore, the construction of such a strategic facility as a nuclear power plant will also inevitably be closed. This means no public or expert control.
The excitement is fueled by the surprisingly loyal attitude of American partners to the nuclear projects of the Presidential Office. U.S. Ambassador Bridget Brink took part in the pouring of the first cubic meter of concrete into KhNPP Unit 5. Penny Pritzker, now the former U.S. Special Representative for Ukraine's Economic Recovery, emphasized that “to quickly solve the problem, building up nuclear power is a completely rational solution.”
The reasons for this loyalty are quite natural and mercenary. The Americans expect that Ukraine will install reactors purchased from the Americans and buy American fuel for the new units. Therefore, the pressure exerted by the State Department on the energy minister in charge, Hennadii Halushchenko, is minimal.
This allowed Halushchenko and his team to start preparatory processes for a large construction project.
A bunch of tenders for the Khmelnytskyi NPP are now being defiantly held through the Prozorro system. They are purchasing dozens of canteen wagons, dressing rooms and meeting rooms for construction workers, as well as protective equipment for welders and installers. Moreover, in million-hryvnia tenders, they buy everything at normal prices so as not to draw premature attention to future purchases worth billions.
The authorities have also already started designing an apartment building for construction workers in Netyshyn, near the KhNPP. They even ordered their own concrete mixing plant so as not to pay a single penny for the main building material. And all this is worth tens of millions of hryvnias.
However, luckily for all of us, there is one problem. To get the Great Nuclear Construction going, a law needs to be passed. Halushchenko already tried this in June, but his promotional campaign was so inept that even the “servants of the people” did not vote for this project. As a result, the construction of nuclear units worth hundreds of billions risks never starting.
This is definitely not what the Presidential Office is waiting for. So it is either Halushchenko will bring the law to completion this autumn, finding the necessary amount of arguments to motivate unmotivated MPs, or his work will be done by another minister. Otherwise, Volodymyr Zelenskyy himself, who sometimes goes to parliament, will have to take up the case. In extreme circumstances.
We are confident that the trusted servants, Mr. Halushchenko and Mr. Kotin, the head of Energoatom, will prove their worth to the common cause this time. They have been caught a hundred times for inflating the prices of construction materials, but it’s just water off a duck’s back. Because people are needed. For example, last year, Energoatom decided to build a production facility in Yuzhnoukrainsk for UAH 89 million. After Nashi Hroshi saw concrete and rebar in the estimate at twice the price, and this fact became the subject of consideration by the Temporary Investigation Commission of the Verkhovna Rada, the tender was canceled and a new one was held instead, with very good savings, for only UAH 71 million.
No one was punished for that and a bunch of other misappropriations. It also allowed Halushchenko and Kotin to increase the degree of impudence and irresponsibility.
It's an open secret that Energoatom’s transformers are currently the most vulnerable to attack. Ukrenergo, together with the State Agency for Reconstruction, is already completing the anti-drone protection of critical substations and can protect everything they need at least from the Shahed drones by the heating season. But the points through which energy leaves the nuclear power plants are the sole responsibility of Energoatom itself. They are even physically separated by a fence from the rest of Ukraine. So, no one has even asked about concrete protection of “nuclear” transformers.
Neither Energoatom, nor the Ministry of Energy, nor the Presidential Office. They don’t have time for that...