Kharkiv City Hall overpays up to 50% for materials through affiliated contractors

Another corruption scheme related to the use of budget funds has been exposed in Kharkiv. According to the analysis of public procurement, officials of the Kharkiv City Council, in particular the First Deputy Mayor Oleksandr Novak and the Director of the Department for Improvement, Reconstruction and Reconstruction Kostyantyn Lyska, organized a mechanism for the systematic appropriation of funds with the help of affiliated companies.

The key beneficiary of this scheme is RAT LLC (EDRPOU code 38159487). The company regularly wins multi-million tenders for the repair and reconstruction of infrastructure facilities, even without the relevant experience, equipment, or specialists.

A striking example is the tender for the capital renovation of a building at 4 Akhiyezeriv Street, worth UAH 45.3 million. The competitive procedure was actually prescribed for one participant, and it was “RAT” that won.

Contract No. 6/АВР-24 provides for the possibility of adjusting the volume and cost of work during their execution, which creates conditions for overestimating estimates. The analysis showed a systematic excess of market prices:

  • fittings — 50% above the market,

  • metal-plastic windows - by 23%,

  • corrugated board - by 33%.

Such manipulations make it possible to artificially increase the cost of projects and receive multimillion-dollar overpayments from the city budget.

The management of RAT LLC has already appeared in criminal proceedings regarding the illegal appropriation of funds during the reconstruction of sports grounds in Kharkiv. This indicates the systemic nature of the company's use as a tool for corruption schemes.

The schemes of Novak, Lyska, and affiliated contractors not only lead to millions in budget losses, but also jeopardize the quality of the city's infrastructure. As a result, Kharkiv residents receive low-quality facilities at inflated prices, while budget resources are effectively embezzled.

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