The new head of the State Road Agency (Ukravtodor), Oleksandr Kubrakov, said at the end of last year that independent international companies would be involved in the “Big Construction” project as technical supervisors of road construction. “Technical supervision will be performed by foreign companies that provide such services professionally in many countries. They will bear legal responsibility. Such companies value their reputation because they have something to lose,” Kubrakov said.
The idea has now become a reality after only a few months. Ukravtodor has signed the first agreements with the major international engineering companies Egis (France) and iC (Austria) to perform technical supervision of repair and construction work in the road sector. The pilot projects include overhaul of the bridge over River Aidar (the Severodonetsk–Novoaidar Highway in the Luhansk region), overhaul of the railway overpass on the Starobilsk–Luhansk–Khrustalnyi–Makiivka–Donetsk Highway and overhaul of the Stryi–Ternopil–Kropyvnytskyi–Znamianka Highway.
Next in line are the Dnipro–Reshetylivka Highway, construction of a highway across River Dnipro to Zaporizhia, construction of the Zaporizhia–Melitopil Highway, construction of the Severodonetsk–Stanytsia Luhanska Highway, and construction of the Krasna Talivka–Luhansk highway with the involvement of a wider range of international engineering companies.
What is technical supervision, why is it needed, and which companies will provide it?
Getting away from monopoly
Today, international companies perform technical supervision exclusively during construction of roads that are financed by international financial institutions. “For projects financed by international financial institutions, the EBRD, and the World Bank, independent consultants are always hired to perform technical supervision and acceptance. Everything is fine there, everything works, and the quality is really good,” Kubrakov said earlier.
In the case of roads that are built with state funds, the state-owned DorYakist company is in charge of supervision. Ukravtodor wants to move away from this practice and increase the number of engineering companies involved in supervision. As in the case of projects funded by international financial institutions, Ukravtodor is betting on independent international companies. “I would like international companies to appear simultaneously to perform DorYakist’s functions during implementation of priority projects,” Kubrakov said in an interview.
According to Ukravtodor, involvement of international experts guarantees independent and high-quality assessment of road works. “We are already working with companies from Austria and France, but there will be more of them every day. We are thus reducing the influence of corruption and diversifying risks. I hope that Ukrainian companies will join the competition and thus develop a market of road consulting services in our country," the head of Ukravtodor said.
What is technical supervision?
The purpose of technical supervision is to monitor construction companies for compliance with design decisions and road standards, as well as the quality of the work that is performed during construction, reconstruction, or repair of public roads. Importantly, technical supervision should be performed by certified engineers.
“Everything has a price. Construction of roads is also expensive, and it will ultimately cost the state more if the quality of construction work is poor,” said Oleksandr Kubrakov.
The services of engineering companies are expensive. Construction supervisors charge 3-10% of the cost of a project, depending on the volume of work. Therefore, only major projects are currently being considered. However, according to Ukravtodor, such costs will ultimately pay offs. “It is quite expensive. Therefore, I am careful with the estimates and I cannot yet say that all the facilities will be accepted by foreign companies specializing in technical supervision. Again, everything has a price. Construction of roads is also expensive, and it will ultimately cost the state more if the quality of the construction work is poor," Kubrakov said.
Engineers have a long list of tasks, beginning with quality control and monitoring the volume of work and schedule and ending with ensuing that companies do not damage the environment. In addition, engineering companies must check documents certifying the quality of road construction materials, products, and structures, inspect and assess construction work at all stages, ensure that the contractor eliminates defects that could affect safety or preservation of public roads, keep photographic reports of work performed on facilities, and deliver monthly reports on the work done.
At the final stage, companies must accept the work performed by the contractor, sign and certify certificates of acceptance of the work that is performed, and submit them to the customer for payment.
Which foreign companies will help us?
The first international companies to be involved in technical supervision are Egis Ukraine and iC Consulenten. Both companies are known for their projects in various parts of the world. Egis’ recent projects include the reconstruction and maintenance of a 140-kilometer highway between Mexico City and the port of Tuxpan in Mexico, as well as the support of the L2 bypass project in Marseille (France). iC Consulenten’s portfolio includes tender support and technical supervision of the construction of a bridge on the Vienna motorway, supervision of the construction of a major traffic intersection in Belgrade, tendering and technical supervision of a transport project in Skopje. Both companies have branches in Ukraine. Egis Ukraine was opened in 1996. iC Consulenten has been operating in Ukraine since 2006. Egis had a turnover of EUR 1.13 billion the year before last. The company employs about 15,000 people in various countries. iC Consulenten has head offices in Vienna, Salzburg, and Ljubljana, as well as international offices in Sweden, Germany, Romania, Bulgaria, Canada and even Australia.
Another potential international consulting company is Temelsu International Engineering Services Inc. (Turkey). Temelsu is headquartered in Ankara. The company has 50 years of experience in provision of consulting and engineering services domestically and internationally. It operates in such areas as road construction, hydropower, pipeline transport, and construction. Temelsu has provided services during construction of major highways and tunnels in Turkey and highways in Georgia, Kazakhstan, Uzbekistan, and Azerbaijan.
In addition to the three international companies mentioned above, Donsung (South Korea), Project Planning & Management (Bulgaria), and DOLSAR Engineering Inc. (Turkey) could be involved in technical supervision of construction and repair of Ukrainian roads and bridges.
Headquartered in Seoul, Donsung was incorporated in 1991. It was licensed as a professional construction supervision company three years later. It has been operating internationally since 2005. Its areas of operation include roads and airports. In particular, the company performs road network planning at the national and local levels, prepares pre-feasibility and feasibility studies for road projects, and evaluates investments. The company has designed and supervised the construction of bridges and expressways in South Korea. On the international market, Donsung operates primarily in Southeast and Central Asia.
Project Planning & Management is a consulting and engineering company that has been in operation for over 10 years. It specializes in provision of technical assistance and design services in the fields of infrastructure development, transportation, environment, water supply, and hydraulic structures. It operates in Eastern Europe, the Balkans, Africa, Asia, the Middle East, and the Caribbean.
Founded in 1971, DOLSAR is a multidisciplinary engineering firm that provides engineering, consulting, and oversight services for major projects, including transport infrastructure projects. The company is one of the 150 leading engineering companies in Europe. In addition to projects in Turkey, its experience extends to projects in Azerbaijan, Georgia, India, Saudi Arabia, Turkmenistan, and Uzbekistan.
The practice of engaging international companies to provide technical supervision of implementation of projects in the road industry is new in Ukraine. It can be expected to initially meet with a wave of opposition from some market participants who are used to playing according to the old rules because it will become one of the mechanisms for countering corruption risks. However, this practice is being introduced specifically to minimize such risks in the field of road construction and to improve the quality of work. There is a good reason why independent construction supervision by engineering companies are a common and mandatory practice at facilities financed by the World Bank, the European Investment Bank, and the European Bank for Reconstruction and Development. Such organizations know how to count money, which means their example if worth following.