Yurii Holyk and Billions on the Roads: How Budgets Were Embezzled Through “Friendly” Contractors Under the Cover of the “Great Construction”

For years Yurii Holyk stood at the intersection of road budgets, “friendly” contractors, and the PR of the “Great Construction.” Through front companies and inflated estimates, billions were buried in asphalt, and accountability stopped at convenient figures. Today the excavator operator is already abroad and systematically erases mentions of his schemes. We propose a reminder of the exact schemes in which the excavator operator of the “Great Construction” was involved.

Holyk’s political career began in 2014, but it was the acquaintance in 1999 with Borys Lozhkin, a close associate of Petro Poroshenko who after Poroshenko’s election became head of the presidential administration, that served it.

A few months later, Holyk’s close friend Valentyn Reznichenko became governor and held the position for the longest period in the history of independence – 1557 days. At the presentation of the new head of the regional state administration, everyone knew that Reznichenko was Lozhkin’s protégé and would work exclusively for his patrons. Although Reznichenko held the post for over 4 years, he didn’t leave any clear marks. Instead, his freelance advisor Holyk was everywhere. He presented all the region’s positive news and was the chief ideologist of the regional administration’s PR service.

Was everything fine?

For Holyk — yes, but for the region the situation was far from good. Despite the government and regional administration’s course toward large-scale construction and road repairs, the roads of Dnipropetrovsk region remain in very poor condition, and the purchased asphalt turned out to be 1,5–2 times more expensive than the market price.

At the end of 2019, deputies of the Dnipropetrovsk regional council from Batkivshchyna stated that over the past 4 years the Reznichenko–Holyk duo rigged tenders for favored companies for a 10–15% kickback on the purchase price.

All these facts forced regional council deputies to create a temporary control commission involving external audit to examine the thefts during road repairs. But such methods of fighting Holyk are absolutely ineffective.

One criminal proceeding No. 120180400000000232, being investigated in Dnipropetrovsk region for the embezzlement by officials of funds intended for construction and infrastructure maintenance, demonstrates the scale of the scheme. 8 different companies in the period 2015–2019 received 130 billion hryvnias for road repair and construction.

All these firms have one thing in common: they were created within a year and registered to straw persons. LLC “Stroyinvest Engineering,” date of creation: 19.11.2015. LLC “Alias-Company,” date of creation: 29.07.2014. LLC “Stroymax-Company,” date of creation: 11.02.2014. LLC “Mistokombud,” date of creation: 17.09.2014. LLC “Ukr-Remmontazh,” date of creation: 06.11.2015. LLC “Komunalnyk,” date of creation: 25.01.2014. LLC “Dniprospecliftservice,” date of creation: 09.06.2015.

The most scandalous of these contractors is “Budinvest Engineering.” For the repair of 8 kilometers of the rural road Malozaharyno–Bahate–Sonyachne they invoiced 61,2 million UAH. This is despite the fact that other companies carry out such repairs 2–2,5 times cheaper.

In just a few years “Budinvest Engineering” received half a billion hryvnias from the regional administration for roads alone. And that does not count other lines of business — construction, maintenance services for in-house heating and water supply networks, and yard cleaning.

One would assume such a profitable company would have a very wealthy owner, but public sources show its founder is Dmytro Lytnarovych. A person with the same name, age, and city of residence posted his resume on work.ua as a simple foreman. It is clear the real owner is well hidden, and the LLC director is a front.

The court decision register has 105 mentions of the company “Mistokombud,” but their colleagues from “Budmax-Company” lead the relay and appear in 127 criminal cases. In 6 years of existence the company won 141 tenders totaling 800 million hryvnias.

Currently LLC “Mistokombud” is in the process of liquidation, but this did not prevent the company from winning a tender worth 135,8 million UAH for restoring the hydrological regime of rivers and flood protection.

It’s easier to steal from children!

The aforementioned enterprises are directly connected to the scandalous Dubynsky brothers and repeatedly appeared in scandals related to construction of social facilities. They were the main contractors for building kindergartens in the cities of Pidhorodne and Obukhivka in Dnipropetrovsk region. Before construction began, Reznichenko and Holyk were doing PR on modern kindergartens and claimed that conditions for children would be no worse than in large cities.

Kindergarten project in the village of Obukhivka

Over 80 million UAH was allocated for kindergarten construction — 44 million for Obukhivka and 39 million for Pidhorodne. Known firms entered the tender — in Pidhorodne LLC “Stroymax-Company,” in Obukhivka LLC “Mistokombud.” Their competitor in the tender was LLC “Komunalnyk,” which is also controlled by the Dubynsky brothers. In February 2018 LLC “Budmax-Company” again took part in the tender for construction at the same address in Pidhorodne despite the formally existing competition from that same LLC “Komunalnyk.” Although the tender was clearly fictitious, this did not prevent more than 35 million UAH from being siphoned off.

The kindergartens were completed and even pompously opened, but parents immediately raised questions about the quality of the work.

Renovation of the kindergarten in Pidhorodne

In Obukhivka things were even worse — a few months after the “grand construction” the kindergarten’s roof began to leak and the ceiling started to crumble. A criminal proceeding was opened, but no one was held accountable.

Ceiling of the kindergarten in Obukhivka

Poroshenko’s departure — the end of the schemes?

After Volodymyr Zelensky’s victory in the elections he began to renew local cadres. In the summer of 2019 Valentyn Reznichenko was dismissed as head of the Dnipropetrovsk regional state administration. Accordingly, his advisor Holyk lost his workplace and opportunity to siphon funds. But as it turned out, not for long.

On 19 July Zelensky held a meeting on road construction in Ukraine; one of those invited to discuss the plans was Yurii Holyk.

By September Holyk’s name appeared as an adviser to the newly elected prime minister Oleksii Honcharuk. The cabinet stated Holyk would advise Honcharuk on the state’s infrastructure issues. From sources close to the former prime minister it became known that Holyk interested Honcharuk with the possibility of extracting a 30-percent kickback on road repairs. Since the state budget for 2020 envisaged the largest amount for road repairs in Ukraine’s history — over 113 billion hryvnias — the idea greatly interested the authorities.

Head of Ukravtodor A. Kubrakov, ex-PM A. Honcharuk, Y. Holyk

But to implement such a “large-scale project” competitors had to be removed. For this, Ukravtodor invented completely fictitious restrictions for firms wishing to take part in state road construction and repair tenders. The main innovation — if you want to win a billion-hryvnia tender, you must prove that in recent years you won a billion-hryvnia tender.

Since in recent years such contracts and the money for them were received by a small circle of “their” companies close to Poroshenko, only they could claim the new billions. And these, as is known, are companies close to Holyk himself.

In Honcharuk’s government Holyk also oversaw the signing of a memorandum with the German company Deutsche Bahn regarding the transfer of Ukrzaliznytsia to their maintenance. At the end of 2019 the news echoed loudly across all media, but it turned out to be fake. Holyk was the initiator of this deception. The Germans, for their part, stated the matter was not about maintenance but about providing consulting services.

New cabinet — without Holyk–Honcharuk siphoning?

An accident intervened in the grand project of stealing funds on road construction and repairs. Honcharuk’s cabinet did not live up to expectations, brought the country’s economy to a terrible state, and was sent into resignation in early March. Holyk left with Honcharuk.

But even here Holyk found himself and now actively siphons budget funds under the cover of the national project “Great Construction.” As in Dnipropetrovsk region, he does PR on building social institutions and receives a healthy kickback from contractors. On 07 December 2019 the National Police registered criminal proceeding No. 12019160000001104, in which the head of the Avanhard village council (Mykolaiv region) Serhii Khrustovskyi and the director of the firm ESMBK “ESTM-BUD” are involved. These officials are suspected of embezzling state funds on an especially large scale. The investigation established that in the acceptance certificates for works performed in November 2019 the prices of building materials were inflated. The cost of waterproofing film per 1 sq. m was inflated by 10 times, and prices for hot-rolled rebar and concrete of grade “200” were also inflated relative to their market price. Holyk, as coordinator of the “Great Construction” project, of which the Avanhard village kindergarten construction is a part, covers the head of the Avanhard OTG Khrustovskyi and actively praises him on social networks despite the open criminal proceeding against him.

Screenshot from social networks

There are rumors that under the patronage of well-known Dnipro politician-businessmen Hennadii Korban, Borys Filatov and their deputy friends of Head of the President’s Office Yermak, Tymoshenko and Smyrnov, Holyk is trying to return to Dnipropetrovsk region to continue what he started — siphoning the regional road repair budget. So far unsuccessfully.

But for how long?..