Yurii Holyk and the Billions on the Roads: How Budget Funds Were Embezzled Through Favored Contractors Under the Guise of the “Great Construction”

For years Yurii Holyk stood at the intersection of road budgets, “his” contractors, and the PR of the “Great Construction.” Through shell companies and inflated estimates, billions were buried in asphalt, while responsibility stopped at convenient figures. Today the excavator operator is already abroad and is systematically erasing mentions of his schemes. We propose to remind readers of the specific deals in which the excavator operator of the “Great Construction” was involved.

Holyk’s political career began in 2014, but it was his 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 him well.

A few months later Holyk’s close friend Valentyn Reznichenko became governor and held that position for the longest period in the history of independence – 1557 days. During the presentation of the new head of the regional administration, everyone knew that Reznichenko was Lozhkin’s protégé and would work exclusively for his patrons. Although Reznichenko held office for more than 4 years, he is not remembered for anything coherent. Instead, his freelance advisor Holyk was visible everywhere. He presented all the region’s positive news and was the main ideologist of the regional administration’s PR service.

Was everything fine?

For Holyk — yes, but for the region the situation turned out poorly. Despite the government’s and the regional administration’s course toward large-scale construction and road repairs, the highways 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 during the last 4 years the Reznichenko–Holyk duo rigged tenders for favored enterprises for 10–15% kickbacks from the purchase price.

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

One criminal proceeding No. ¹120180400000000232, which is being investigated in Dnipropetrovsk region on the fact of officials of enterprises embezzling funds intended for the construction and maintenance of infrastructure, 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 share one thing: they were created within a year and registered to front people. LLC “Stroyinvest Inzhyniring,” date of establishment: 19.11.2015. LLC “Alias-Company,” date of establishment: 29.07.2014. LLC “Stroymaks-Company,” date of establishment: 11.02.2014. LLC “Mistokombud,” date of establishment: 17.09.2014. LLC “Ukr-Remmontazh,” date of establishment: 06.11.2015. LLC “Komunalnyk,” date of establishment: 25.01.2014. LLC “Dniprospecliftservice,” date of establishment: 09.06.2015.

The most scandalous of these contractors is “Budinvest Inzhyniring.” For the repair of 8 kilometers of the rural road Malozakharyne–Bahate–Sonyachne they billed 61,2 million UAH. This is while other firms do such repairs 2–2,5 times cheaper.

In just a few years “Budinvest Inzhyniring” received half a billion hryvnias from the regional administration just for roads. And that does not count other lines of activity — construction, services for maintenance of internal building heating and water supply networks, and cleaning of adjacent territories.

One would think 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 company’s director is a front.

The court decisions register has 105 mentions of the company “Mistokombud,” but their colleagues from “Budmaks-Compani” take precedence in the relay and appear in 127 criminal cases. During 6 years of existence the company won 141 tenders for a total amount of 800 million hryvnias.

Today LLC “Mistokombud” is in the process of liquidation, but this did not prevent the company from winning a tender of 135,8 million UAH to restore the hydrological regime of rivers and protection against flooding.

Stealing from children is easier!

The aforementioned enterprises are directly connected to the scandalous Dubynskyi brothers and have repeatedly been involved 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 publicized the modern kindergartens and stated that conditions for children would be no worse than in large cities.

Kindergarten project in the village of Obukhivka

More than 80 million hryvnias were allocated for kindergarten construction — 44 million for Obukhivka and 39 million for Pidhorodne. Known firms entered the tender — in Pidhorodne LLC “Stroymaks-Compani,” in Obukhivka LLC “Mistokombud.” During the tender their competitor was LLC “Komunalnyk,” which is also controlled by the Dubynskyi brothers. In February 2018 LLC “Budmaks-Compani” again participated in a tender to build at the same address in Pidhorodne, with formally existing competition from the same LLC “Komunalnyk.” Although the tender was clearly fixed, this did not prevent the squandering of over 35 million hryvnias.

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

Things were even worse in Obukhivka — a few months after the “grand construction” the kindergarten roof began leaking and, as a result, the ceiling started to fall apart. A criminal case 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 renewing personnel at the local level. In the summer of 2019 the head of the Dnipropetrovsk ODA Valentyn Reznichenko was dismissed. Accordingly, his advisor Holyk lost his workplace and the opportunity to skim. But, as it turned out, only briefly.

On 19 July Zelensky held a meeting on road construction issues in Ukraine; one of the invitees 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, in turn, stated that Holyk would advise Honcharuk on the country’s infrastructure issues. Sources close to the former prime minister revealed that Holyk interested Honcharuk in the possibility of skimming 30-percent kickbacks on road repairs. Since the state budget for 2020 foresees the largest sum for road repairs in Ukraine in all years of independence — over 113 billion hryvnias — the topic greatly interested the authorities.

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

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

Since in recent years such contracts and the money for them were received only 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 signing a memorandum with the German company Deutsche Bahn on transferring parts of Ukrzaliznytsia’s servicing. At the end of 2019 that news loudly circulated in all media, but as it turned out it was fake. Holyk was the initiator of this deception. The Germans, in turn, stated that the discussion was not about servicing but about providing consulting services.

New Cabinet — without Holyk–Honcharuk skimming?

A stroke of fate interfered with the grand project of stealing funds on road construction and repairs. The Honcharuk Cabinet did not live up to expectations, brought the country’s economy to a terrible state, and was sent into resignation at the beginning of March. Along with Honcharuk went his advisor Holyk.

But even here Holyk found a way and now actively skims budget funds under the cover of the national project “Great Construction.” As in Dnipropetrovsk region, he publicizes the construction of social institutions and receives a generous kickback from contractors. On 07 December 2019 the National Police registered criminal proceeding No. 12019160000001104, in which the head of Avanhard village council (Mykolaiv region) Serhii Khrustovskyi and the director of the firm ESMBK “ESTM-BUD” are featured. The listed 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 prices for construction materials were inflated. The cost of waterproofing film per 1 sq. m was inflated by 10 times; prices for hot-rolled rebar and concrete grade “200” were also inflated relative to their market price. Holyk, as coordinator of the “Great Construction” project, part of which is the construction of the kindergarten in the settlement of Avanhard, covers the head of Avanhard’s united territorial community Khrustovskyi and actively praises him on social networks, despite the criminal proceeding opened against him.

Screenshot from social networks

Rumor has it that Holyk, under the patronage of well-known Dnipro politicians-businessmen Korban, Filatov and their deputy head of the OP friends Yermak’s Tymoshenko and Smyrnov, is trying to return to Dnipropetrovsk region to continue what he started — skimming the regional road repair budget. So far unsuccessfully.

But for how long?..