Representatives of the Construction Sector Transparency Initiative (CoST), which monitors repair of automobile roads in Ukraine, presented the results of a study into the financing of the road sector in 2016 on Tuesday. The presentation identified six factors that negatively affect the quality of road repairs in Ukraine.
The first factor is the lack of competition in the road maintenance market. In the Zaporizhia, Zhytomyr, and Ternopil regions, the winner of all the relevant tenders was one company. In other regions, the percentage of wins by one participant is also high at 70-80%. As a result of the signing of contracts, the five biggest contractors received UAH 1.73 billion or 51% of the total amount. These companies are Avtomagistral-Yug, Rostdorstroy, Tekhno-Bud-Tsentr, Lukavtodor-Servis, and Avtomagistral.
According to the presentation, a small number of companies participated in the tenders. There were only two bidders in 38% of the tenders, only three in 30%, and only four in 21%. Few tenders had many bidders.
The second factor is the lack of confirmation of the reserve strength of the road sections being repaired, which leads to inefficient use of budgetary funds.
The third factor is unjustified distribution of funds for financing repair of roads among regions. According to estimates by CoST, five regions received 47% of the allocated funds or UAH 4.87 billion. The largest was recipient was the Lviv region, which received 16% of the funds, followed by the Odesa region with 13%, the Ivano-Frankivsk region with 7%, the Dnipropetrovsk region with 6%, and the Poltava region with 5%.
Among the other factors affecting the quality of road repairs, CoST experts cited the lack of proper quality control, the failure of repair work to meet smoothness and durability requirements, and delays in performance of repair works.
During preparation of the study, CoST experts analyzed 120 tenders organized in the road sector in 2016. The total value of the contracts exceeded UAH 3.39 billion. At the same time, about UAH 10.3 billion was scheduled for allocation for financing the road sector in 2016.
