Billion-dollar "schemes" for shelters: how budget funds are being utilized in Kyiv

Billion-dollar "schemes" for shelters: how budget funds are being utilized in Kyiv

“Schemes” follow the money,” — says a character from a modern play. The boom in the construction of shelters across the country indicates that significant funds are now being directed here. Consequently, schemes and their masters are already present: as if specialists in all types of "cutting" were drawn to this area like magnets. Just in the capital, several billion hryvnias are allocated for shelters.

In the publication “Kraina” they conducted a study of 200 tenders for shelters in Kyiv and clearly saw a familiar picture: invisible but obvious agreements between officials and developers, price hikes, cutting off competitors, and pushing through their own by all means. In other words, everyone to his own for something from others. Or rather, for state funds.

In 2024, mounds of soil appeared near schools and kindergartens in Kyiv: the construction of protective structures began. Before the start of the school year, 678 procurements worth 4.3 billion UAH were conducted, according to Prozorro. This money is meant to repair, build, or equip 449 shelters. Two-thirds of them will be put into operation by the end of 2025. Let’s see how this "works".

Customers and Their Favorite Performers

Mostly, repairs and construction of shelters in the capital were ordered by district education departments, less often – educational institutions. But shelters are being built with state funds. Usually, district education departments order one of two types of work – either major repairs or current repairs of a shelter. The second case means that the basement of an educational institution is adapted into a protective structure. Here, the amount of tender procurements ranges from one to several million hryvnias. But when a major repair or construction of a new underground shelter is involved, the sums skyrocket and can reach hundreds of millions of hryvnias.

Here’s the top three leaders by number of procurements: Darnytskyi district – 123 contracts were signed, Sviatoshynskyi – 101, Solomianskyi – 79, according to Prozorro. However, by total value, the first place is taken by Holosiivskyi district with 932 million UAH, second is Dniprovskyi with 886 million UAH, and third is Darnytskyi with 863 million UAH.

And here’s the first surprise. Recall that under martial law, procurement can be non-competitive. This means whichever company applied to the tender, won.

“Kraina” found out that each district education department has its favorites. For example, the education department of the Darnytskyi district administration in 2024 preferred the Vinnytsia-based LLC “Vinremsystems” and signed eight contracts with it for 95.5 million UAH in a year. Meanwhile, "Vinremsystems," when applying for a tender announced by the Darnytskyi district education department, in order to demonstrate its ability to execute the project, provides a review from… the Darnytskyi district education department. That is, the customer recommends the contractor to itself.

Another favorite company of Darnytsia educators is the Lviv-based LLC “BC “Zhytlo-Expert” registered at the beginning of 2023. Within a few months, the company began to win tenders, and guess which ones. Yes, exclusively with the Darnytskyi district education department. Of course, the favorite company has, as they say, a most-favored-nation status with the customer. For example, the builders failed to complete a shelter for school No. 255 by the start of the school year. And what are the consequences? None. The department did not impose any fines, but just signed an additional agreement and paid the full tender amount. Overall, "BC "Zhytlo-Expert" received 9.15 million UAH from the Darnytskyi education department in 2024.

In another city district – a different story. The Shevchenkivskyi district administration grants preference in tenders exclusively to LLC “Kyiv Construction Company”. In the materials of a planned audit of the activities of the construction, architecture, and land-use department of the Shevchenkivskyi district administration as a customer, studied by “Kraina”, seven remarks about this tandem’s activities are listed. The main one being a price markup on work almost by half. "During the major repair of the most straightforward shelter of school No. 38, the contractor’s overstatement of volumes and costs of construction work in December 2022 amounted to 1.24 million UAH, or 40.73% of the verified work’s cost," says the auditors’ report. Such a "mark-up", is nearly half the price, for the friendship between the customer and contractor.

In 2023, LLC “Kyiv Construction Company” wins a tender from the same customer for major repairs to convert a building in the district into a Complex Rehabilitation Center for People with Disabilities. The tender, competitors claimed, was essentially written for the winner: the conditions included a requirement to provide a certificate of conformity for sand, concrete, crushed stone-sand mixes, and other items. Even though another participant in the auction - a competitor - rightly pointed out that the law does not require certificates for this kind of product, as each batch has its own passport, the requirements were not changed.

The “Kyiv Construction Company” was recognized as the winner, although it did not offer the lowest price and has a "record" of a criminal case registered in August 2024. The Podilskyi district court examined a prosecutor’s application from the Podilskyi district prosecutor’s office in Kyiv to arrest the company’s assets on January 2, 2025. An analysis of a dozen procurements convinced the court to satisfy the prosecutors’ request.

And this is not the only case when contracts are signed with companies involved in criminal proceedings. On the one hand, it’s not prohibited, as the business’s culpability has not yet been proven. But customers should consider whether these events threaten the project’s realization.

Here the education department of the Holosiivskyi district administration, one of the districts with the highest spending, signed an agreement with LLC “I.B.K. Development” to build a shelter for gymnasium No. 236 for 231.9 million UAH. Two other companies, which offered a significantly lower price, also applied for the tender, but the tender committee found faults with their documentation, and their proposals were rejected. There were remarks on the "I.B.K. Development" documents as well, but, as they say in Odesa, feel the difference: the company was declared the winner and given time to correct errors.

In fact, regarding the project implementation, Dozorro data shows that construction material prices in the budget are significantly higher than market rates, indicating a possible overpayment of over 3.7 million UAH. At the same time, like the favorites of the educators from the Shevchenkivskyi district, the company can also "boast" numerous criminal cases. For instance, regarding the capital repair (as of May 2022) of the National University of Life and Environmental Sciences of Ukraine in Kyiv, which the company did not complete after receiving almost 30 million UAH.

If we dig deeper, the business paths of the company’s owners crossed with quite interesting figures. These same owners, Oleksandr Lukyanets and Vitaliy Zhukovskyi, as Dozorro analysts write, were beneficiaries of the Joint Stock Company "Closed Undiversified Venture Corporate Investment Fund ’Flesh’ before September 2018.” Shortly after, its owner becomes Nataliya Hordiyenko, mother of ex-MP Serhiy Katsuba and the former deputy head of the "Naftogaz of Ukraine" board Oleksandr Katsuba.

Note: what does it matter who she is the mother of? Do not say so. They both were suspects in the involvement in purchasing "Boyko towers" at an inflated price. Oleksandr Katsuba in 2017, being an accused in this case, made a deal with the investigation - pleaded guilty and received a punishment: imprisonment for a year and five months. Later, in 2024, his lawyers attempted to review the verdict (allegedly the convicted person pleaded guilty during the agreement with the investigation), but the Shevchenkivskyi district court did not satisfy the defence motion.

Thus, Oleksandr Katsuba remains convicted in one of the most high-profile fraud cases in the modern history of Ukraine. Furthermore, as of February 13, 2025, he is still listed in the National Agency on Corruption Prevention’s register of corrupt individuals. So these are the reputational nuances of the company - the favorite of the schools in Kyiv’s Holosiivskyi district.

Builders from Donetsk

Another story. In August 2024, the education department of Sviatoshynskyi district announced a tender to build a shelter for a specialized school No. 197 for more than 140 million UAH. Three companies submitted bids, the highest bidder was LLC "Ukrbud-project-reconstruction". And they were recognized as the winner. Can you guess why? Documentation deficiencies were found in the two other applicants, and their proposals were rejected.

"Ukrbud-project-reconstruction" also had issues - remarks on three pages. But for some reason, they were given the opportunity to fix the deficiencies. Why? Let’s speculate: was it the company’s spotless reputation and track record that impressed the customer? Let’s take a closer look at that reputation and list.

Although the company is registered in the Kyiv region, the director of LLC "Ukrbud-project-reconstruction" is David Kizimenko from Donetsk. The entire Kizimenko family – David, his brother Mark, their mother Alla, and their father Oleh – are involved in the construction business in some way, and each carries a criminal slur.

Moreover, against the father, there are accusations of treason. In 2012, he was the deputy head of the Sevastopol city administration of Volodymyr Yatsuba. Oleh Kizimenko did not stand out from the rest of the city administration heads. But after the Russians captured Sevastopol, he remained in the same position with the occupiers. After a year, the so-called governor of Sevastopol, Serhiy Minyaylo, dismissed him for embezzling over 45 million rubles from the budget, according to the Center for Journalistic Investigations.

In September 2018, Oleh Kizimenko fled from occupied Crimea, and he was arrested in Kherson, which was under Ukrainian control, on suspicion of treason. In December of the same year, he was sentenced conditionally with a probationary (!) term of one year for a milder article – separatism. Thus, an official who held a high position in the occupation government got off virtually with a slight fright. Even after the conditional sentence, receiving contracts for a person with such a reputation was obviously not easy. So in 2020, the owner of LLC "Ukrbud-project-reconstruction" becomes Oleh Kizimenko’s son – David. And the company, which previously did not work with budget funds, began to rapidly win one tender after another, actively earning state procurement. The sums speak for themselves: if in 2021 the firm completed orders for 113 million UAH, by 2024 it earned over 304 million UAH on tenders.

In total, this small Kyiv region company is rapidly approaching its first billion: since 2021 it received almost 890 million UAH on state tenders. Meanwhile, most of the tenders won ended in criminal cases. For example, the Zarichnyi district court of Sumy has been considering criminal cases where David Kizimenko is an accused person for two years now. Both cases concern embezzlement of funds intended for rebuilding the destroyed infrastructure in the Sumy region from the occupiers.

Among the objects supposed to be restored and repaired with this money are residential buildings, objects of civil and critical infrastructure, bridges, and roads. In 2023, an investigator applied to the Zarichnyi district court of Sumy with a petition to take David Kizimenko into custody with a bail of almost 1.5 million UAH, but the court was limited to personal obligations for the suspect.

Thus, he will continue to actively win tenders, building shelters across the country. In Kyiv, the company will "master" the mentioned 140 million UAH for the shelter at school No. 197 and concurrently, based on new tender results, build yet another shelter for 150 million UAH in the village of Velyka Oleksandrivka in the Kherson region. The procurement on the Prozorro site, as you might guess, was non-competitive. A sort of auction without an auction.

Benches from Ternopil for the Whole of Ukraine

Meanwhile, the education department of Kyiv’s Darnytskyi district announced a tender in October 2024 to purchase furniture for shelters and protective structures for civil protection of educational institutions in the district. The contract price is almost 7.5 million UAH. It could have been half a million cheaper. Such an offer was made by LLC "Sunny Valley", however, it could not win because the proposal was clearly written for their competitor. One condition was providing a report from the manufacturer by an environmental auditor issued by the Ministry of Environmental Protection and Natural Resources.

"We believe that the requirement set forth in the tender documentation violates the rights and legal interests of potential participants and also violates the principles of fair competition among participants," a representative of LLC "Sunny Valley" stated. But it was a voice crying in the wilderness: the tender committee rejected the company’s proposal and favored LLC "ENSO Group" from Ternopil. As specified in the contract, the price of one bench is 3260 UAH, with 2300 benches, according to the tender conditions.

What kind of unique bench supplier is this from Ternopil? "Kraina" found out: LLC "ENSO Group" was registered in December 2023, and within two months it received its first contract. Overall, in 2024 it signed 35 contracts for furniture supply but completed 13 successfully. Yet, over the year, the company received a dozen complaints for participating in tenders.

"Fortune" with Bunks and a Professional Coffee Maker

The most expensive shelter last year began to be built for the educational complex No. 183 of the "Fortunate Academy." The tender was announced at the beginning of June 2024. The declared cost was almost 300 million UAH. Four companies applied, three of which have experience in building shelters. The customer, the education department of Dniprovskyi district administration, declared LLC "Construction City K" as the winner, which declared the highest price – 297.8 million UAH. It was the only participant with no experience in building shelters. Neither the competitor’s statement about rejecting its proposal due to formal errors nor the executor’s procurement monitoring changed the situation, and the contract was signed in August.

What is this company? LLC "Construction City K" was registered in June 2023, within one and a half (!) months it won its first tender. By the year-end, they received 11.5 million UAH worth of state orders. By 2024, the firm with three employees earned over 100 million UAH on state contracts.

However, let’s return to "Fortune". "Kraina" studied 1300 line items of the final statement, which is part of the cost estimate documentation. What is planned to be purchased? 10 collective first-aid kits for protective structures at 3.3 thousand UAH each. On Rozetka such goods cost 2.6 thousand UAH each.

They will procure household electric stoves and electric kettles for 1.3 thousand UAH each, while supermarket prices for kettles start at 279 UAH. They will buy 268 metal bunks for 4.18 million UAH, a professional coffee maker for 47.7 thousand UAH, and a furniture set with a built-in sink for almost 80 thousand UAH. Last year a hospital in Volyn bought a furniture set with a built-in sink for 19 thousand UAH, that is, four times cheaper. As they say, the cherry on the cake: 5.747 million UAH for covering additional expenses related to inflation.

The New Year brought new tenders for the construction and repair of shelters in educational institutions: in 2025, the government allocated a record 6.2 billion UAH for these needs across the country.

"Cut-24" has successfully ended. Long live "Cut-25"?