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Automatically translated version. May contain inaccuracies compared to the original.
Journalists learned details of one of the criminal proceedings concerning the construction of water pipelines during the war. For the case against Avtomagistral-Pivden the police used a rather original expert assessment. The company explains that these are not excess capacities but a reserve necessary for better operation of the pipeline.
In 2023 the Service for Restoration and Infrastructure Development in the Dnipropetrovsk region signed three contracts without tendering to build main water pipelines to eliminate the consequences of the Russian destruction of the Kakhovka Hydroelectric Power Plant. The total cost of the works was 12,62 billion hryvnias.
The first pipeline—from the Inhulets River to the Pivdenne reservoir to supply water to Kryvyi Rih—was assigned to be built by Avtomagistral-Pivden for 5,32 billion hryvnias. The third, Marhanets–Nikopol–Pokrov, was assigned to Rostdorstroy for 2,00 billion hryvnias. In addition to the pipelines themselves, the client provided for various structures such as water intakes and pumping stations.
Procurements were carried out under a design-and-build principle. Contractors were awarded contracts simultaneously to develop design documentation and perform construction and installation works. This approach creates a risk for the client: the company designs the facility it will later build and may have an incentive to include larger volumes of work or more expensive materials in the design. Therefore, independent and thorough control by the client over design decisions, volumes, and costs is especially important.
Criminal proceeding
According to Nashi Hroshi, the National Police is investigating the construction of the pipeline in Dnipropetrovsk region as part of criminal proceeding No. 42022142240000051.
As part of the pre-trial investigation, possible abuses during the construction of the pipeline from the Inhulets River to the Pivdenne reservoir are being checked.
According to the investigation’s version, Avtomagistral-Pivden may have acted in collusion with officials of the Ukraine representative office of “B-Akt” Spilka Aksiyna (engineer-consultant), LLC NVO Transinzhyniring (project developer), and LLC Expert Proekt Group (project expertise) during the development, compilation, and approval of the design and estimate documentation.
The investigation believes that the documentation contained inflated volumes of work. In particular, it provided for construction of pumping station No.3 (PS-3), the necessity of which is questioned, and for laying four pipeline branches with diameters 1 000-1 200 mm instead of two branches with diameters 1 300 mm. According to the investigation’s estimate, such decisions could have caused damage to the state of 2,8 billion hryvnias.
The order allocating duties among the Chair, the First Deputy Chair, and the Deputy Chairs states that the First Deputy Chair of the Recovery Agency (at that time Andrii Ivko) organizes and controls work including ensuring the development, examination, and approval of design and estimate documentation in the prescribed manner; and conducting monitoring of the market for road-construction materials, machinery, and mechanisms for construction.
Loss assessment made according to an original scheme
National Police investigators commissioned an alternative pipeline construction project from DRPI SE Ukrpivdendniprovodgosp. They also received a specialist’s certificate from DI UkrNDIVodokanalproekt, which stated the impracticality of constructing Pumping Station-3 and laying two extra pipeline branches.
The actually implemented project from LLC NVO Transinzhyniring provided for laying four parallel pipeline strings with diameters 1 000-1 200 mm. Its cost was 4,47 billion hryvnias.
The alternative project by DRPI Ukrpivdendniprovodgosp provided for laying two pipeline strings with diameters 1 300 mm. Its cost was estimated at 2,13 billion hryvnias. In other words, half as many pipes of slightly larger diameter made it possible to save on digging narrower trenches.
The difference between the cost of the two options is more than 2,34 billion hryvnias.
Another 0,44 billion hryvnias was the cost of building PS-3. These components together form the sum of about 2,8 billion hryvnias that experts determined as damage to the state.
According to the conclusions of KNDISE experts, the total cost of building the pipeline under the contracts with Avtomagistral-Pivden No. B-V-1 dated 19.07.2023 and No. B-V-1/1 dated 30.04.2024 is 7,12 billion hryvnias.
Unconnected pumps
During an on-site inspection of PS-3 experts from KNDISE found that pump units DHV.700-590 PA were not connected to operation, and the gate valves DN 1000 PN16 EPDM were sealed. At the same time the station was built according to the design documentation: it consists of a technological part (machinery hall) and an administrative and household semi-buried part, and the installed equipment matches the project in list, quantity, and location.
According to the acceptance certificates for completed works, construction of PS-3 cost 442,20 million hryvnias.
Chief specialist Ihor Greban, who provided a certificate with analysis of the design documentation and hydraulic calculations, concluded that the capacity and head of the pump units at the first (PS-1) and second (PS-2) lift stations are sufficient to provide the design capacity of the entire pipeline.
Hydraulic calculations by specialists of the institute Ukrpivdendniprovodgosp showed that PS-1 and PS-2 can provide water supply both in normal operation and in emergency situations. At the location of PS-3, they concluded, it would have been sufficient to equip a switching chamber. Therefore, the specialists recognized construction of PS-3 as impractical.
In his certificate Ihor Greban also noted that laying four pipeline branches with diameters 1 000-1 200 mm requires larger volumes of construction and installation work than laying two branches with diameters 1 300 mm. Specialists from Ukrpivdendniprovodgosp concluded that building four parallel pipelines of different diameters is impractical.
Historical background on the need for the pipeline
Construction began immediately after the detonation of the Kakhovka HPP in 2023. Within seven months they completed design works, delivered materials, and installed the pipelines. At the same time there were difficulties supplying pipes: Ukrainian manufacturers could cover only a quarter of the need, so suppliers included, among others, Romania and Poland. There were also delays in supplying pumps, the production of which could take from a year to a year and a half.
Recovery Agency head Mustafa Nayyem then assured that project funding was confirmed and that the project had passed all necessary examinations, including a technical audit by an independent foreign company. Separately, he said, the project was checked by the Accounting Chamber. Construction was financed from a special Fund for the elimination of the consequences of Russian armed aggression.
In July 2023 then-deputy prime minister for recovery Oleksandr Kubrakov visited Dnipropetrovsk region and inspected preparatory works for construction of main water pipelines intended to supply drinking water to regions affected by the detonation of the Kakhovka HPP.
“The construction of main water pipelines is the most important restoration project right now. They will literally be built from scratch. International partners are involved in the procurement and logistics of pipes of the necessary diameter, as well as high-power pumps. We set ourselves an ambitious task—to complete the work as quickly as possible,” Kubrakov said.
After the publication, Avtomagistral-Pivden informed Nashi Hroshi of its position in this matter:
At first glance, laying two large pipes seems like a simpler and cheaper solution. However, analysis shows that such an option is risky and economically unprofitable.
That is why the project “New construction of main water pipelines r. Inhulets – Pivdenne reservoir to supply water to Kryvyi Rih” received a positive assessment in the comprehensive technical and economic review commissioned by the State Agency for Restoration and the USAID ERA Project.
We note separately that the so-called “alternative project” for the construction of the facility referenced in the article, namely the materials developed by DRPVI “UKRPIVDENDNIPROVODGOSP” at the request of the pre-trial investigation authority, as well as the specialist certificate from DI UkrNDIVodokanalproekt, are not design documentation within the meaning of current Ukrainian legislation.
Yurii Nikolov, Hanna Kysliakova, Nashi Hroshi
Document: PDF proof of the original version of the news item "Водогін для Кривого Рогу за 5,32 мільярда гривень: поліція виявила можливе завищення робіт на 2,8 мільярда". It records the publication content at the moment of the first scan, the preservation date and the source: HAB Media.
