Business news from Ukraine


The RDS Group of road construction companies will repair a section of M-14 road in Kherson region, which will be the ninth region of Ukraine in which the company carries out works, the co-founder of RDS, Yevhen Konovalov, told Interfax-Ukraine.
“Our production will be based in Nova Kakhovka. The south, Kherson region are strategically important for the development of both passenger flow and trade infrastructure of our country,” he said.
According to Konovalov, the group plans to join projects in other regions of the country within the president’s Big Construction program by the end of this year.

According to the ProZorro system, Rostdorstroy LLC, which is a part of the RDS Group, won two lots in the tender for medium repairs of M-14 Odesa-Melitopol-Novoazovsk road in Kherson region worth UAH 22.998 million and UAH 46.98 million (PJSC Khmelnytsky Road Construction Department No. 56 won two other lots).
In addition, Rostdorstroy has passed prequalification along with Khmelnytsky Road Construction Department No. 56 and Avtomagistral-Pivden LLC in several more tenders for medium repairs of this road in Kherson region.
In 2020, the State Agency of Automobile Roads of Ukraine (Ukravtodor) plans to repair 177.5 kilometers of national roads in Kherson region for UAH 2.1 billion, including 36.1 kilometers of M-14 Odesa-Melitopol-Novoazovsk road.

RDS Group is included in the top three road construction companies of Ukraine. It includes Kyivshliakhbud and Rostdorstroy. The core business is construction, reconstruction and maintenance of roads and bridges, construction of airfield complexes.
The ultimate beneficial owners of RDS Group are Ukrainian citizens Yuriy Shumakher and Yevhen Konovalov.

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A tender worth UAH 452 million to repair 25 km of Kropyvnytsky’s bypass road towards Kryvy Rih on the H-23 Kropyvnytsky-Kryvy Rih-Zaporizhia highway was won by a group of road construction companies RDS, the co-founder of the company Yuriy Shumakher has told Interfax-Ukraine.
“We have already formed working brigades in full, and this Saturday [July 4] we are starting construction,” he said.
Schumacher said that the RDS group, as one of the largest players in the Ukrainian road market, understands the importance of the Big Construction project announced by the president, therefore, it is responsible for the quality and deadlines for the work performed.
Turkish Onur Construction International with the best offer of UAH 452.899 million and the Ukrainian-German company Avtostrada with the best offer of UAH 452.9 million also participated in the tender with an expected value of UAH 477.08 million.
The total volume of H-23 road repair in Kirovohrad region this year is 83 km.
RDS Group is included in the top three road construction companies of Ukraine. It includes Kyivshliakhbud and Rostdorstroy. The core business is construction, reconstruction and maintenance of roads and bridges, construction of airfield complexes.
The ultimate beneficial owners of RDS Group are Ukrainian citizens Shumakher and Yevhen Konovalov.

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The RDS group of road construction companies annually congratulates children from needy families on World Children’s Day.
This year more than 50 multi-child families and children with disabilities registered at the Prymorsky territorial social services center in Odesa received gifts on World Children’s Day, the co-founder of the group, Yevhen Konovalov, said.

He noted that the company could not organize its annual concert for children due to the coronavirus (COVID-19) pandemic. Therefore it decided to present its young care recipients with sweets and tickets to the dolphin show valid until the end of the quarantine.

RDS Group is one of the top three road construction companies of Ukraine. It includes Kyivshliakhbud and Rostdorstroy. Its core business is construction, modernization and maintenance of roads and bridges, construction of airfield complexes.
As of April 2020, the company operates in eight regions of Ukraine and has ten production facilities.
Today the group carries out the repairs of the N-21 highway in Luhansk region within the Big Construction program. A part of the road connecting Severodonetsk and Stanytsia Luhanska is the only entry point to the temporarily occupied territory of Donbas. The company is also building concrete road N-31 Dnipro-Reshetylivka in Poltava region and overhauls the N-14 Kropyvnytsky-Mykolaiv highway.

The RDS group of road construction companies is also implementing a project financed by the World Bank for repairs of the M-03 Kyiv-Kharkiv-Dovzhansky highway.
The ultimate beneficial owners of RDS are Ukrainian citizens Yuriy Shumakher and Yevhen Konovalov.

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Construction on the N-01 Kyiv-Znamyanka highway, which in three sections is being carried out by RDS group of road construction companies within the government’s and president’s “Big Construction” program, is three months ahead of schedule, the company has said.
“We are ahead of schedule on the N-01 highway. There are only three sections. According to the contract, we must hand over the first one in September, the second one in October, the third one in November, but we will finish everything in July,” Yuriy Shumakher, the co-owner of the group, told Interfax-Ukraine.
According to him, almost 100 people work at the facility, employees comply with sanitary safety standards.
The company said that it had signed agreements on this site for a total of UAH 658 million with the Automobile Road Service of Cherkasy region. Repairs are underway in Horodysche and Smila districts. Some 36.8 km of old pavement have been dismantled. The new coating will be two-layer. The bottom layer of asphalt concrete pavement has been laid. In Horodysche district, some 14 km of the upper finish layer have been laid. Now traffic is in a reverse mode.
RDS Group is included in the top three road construction companies of Ukraine. It includes Kyivshliakhbud” and Rostdorstroy. The core business is construction, reconstruction and maintenance of roads and bridges, construction of airfield complexes.
The ultimate beneficial owners of RDS Group are Ukrainian citizens Yuriy Shumakher and Yevhen Konovalov.

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Exclusive interview of Kyivshliakhbud road construction company CEO Oleksandr Raschupkin for Interfax-Ukraine
– The coronavirus (COVID-19) pandemic has dramatically influenced on the economic situation in the country. However, the government decided to refuse from scrapping its infrastructure projects. Why?
– We are grateful to the president for taking a correct view of the branches that can support the country’s economy during the quarantine. The road construction industry financing has provided enterprises with orders and launched the goods and money chains. Hence, the number of jobs is growing and the state receives taxes from business operations of hundreds of enterprises and suppliers.
In particular, the road industry was put on the list of priority branches for financing, the budgeting was not cut by even a kopeck and, moreover, a significant amount of money was added to it. The plans the president had at the end of 2019 and the beginning of 2020 are being implemented in full.
If they decided to scrap the Big Construction project, Ukraine’s economy would fall into an abyss.
– What anti-epidemic protection measures does your company take amid the spread of COVID-19 in Kyiv? Do your workers use special protective equipment during road repairs? Are there any COVID-19 cases among your employees?
– Kyivshliakhbud operates within the limits of a megalopolis – Kyiv. Of course, there is a lot of responsibility on our company. We have taken all necessary measures at all of our bases, facilities, dormitories where our employees live and the plant: sanitizers and face masks have been purchased. The premises are treated with disinfectant, we also have express tests and we use them even when the least cold symptoms are detected.
What’s more, we have toughened discipline among employees and strengthened our healthcare teams. We have twenty medical workers today. They carry out temperature screening among all employees every day in order to take necessary measures if anything goes wrong. Thank God, we don’t have COVID-19 cases as of the end of April.
– The number of unemployed people is growing due to the pandemic in Kyiv and all over Ukraine. In addition, dozens of thousands of citizens have returned from abroad. Will Kyivshliakhbud provide crisis-affected Ukrainians with new jobs within the governmental program?
– Definitely. The RDS group, a part of which is Kyivshliakhbud, has announced its plans to increase its personnel by 900 employees, but they are mostly connected with the Ukravtodor’s projects which we are working on.
As to Kyiv, we are working on seven facilities in Kyiv. We hope that by the end of H1 we will overcome the peak of the pandemic and the financing of our project will be increased. We want people, who have returned from abroad and lost their jobs, as well as many people, who have been laid off in Ukraine, to get jobs. According to a moderately optimistic scenario, we will additionally employ around 300 people in Kyiv by the end of the year.
– The prime minister said that the people, who have lost their jobs recently, will have an opportunity to earn UAH 6,000-8,000 in road construction. What level of wages do you have in your sector? How did the epidemic influence it? Has labor supply increased?
– UAH 6,000-8,000 is a beginner’s salary. Of course highway engineers earn much more. We will do the utmost to revive the prestige of our job, and the level of wages you’ve mentioned is just the beginning.
– Foreign contractors, including Turkish, Azerbaijani, Belarusian companies, have been actively working on the Ukrainian market in recent years. How has the crisis affected or may affect their activities? Is there a possibility of them passing the contracts they had won in tenders?
– The foreign companies continue working. The only problem they may face during the quarantine is the fact that their employees, who are often citizens of other countries, could be banned from entering the country. The implementation of some projects may slow down due to this fact. The companies cannot pass the contracts they had won in tenders. A contract may be only dissolved and a new tender will be held after that.
As a national company we are aware of the importance of proceeding with works on all big and significant tenders. If necessary, we are ready to provide assistance to our foreign colleagues who work shoulder to shoulder with us, but I am sure that foreign companies won’t face any problems in Ukraine.
– What plans do RDS and Kyivshliakhbud have regarding the entry to European markets amid the quarantine and lockdown restrictions?
– We constantly monitor tenders in Bulgaria, Moldova, Romania, and Poland. These countries are close to us, although there are some nuances there. If we meet the qualification requirements of the tendering authorities, of course we will file bids for it, we have ambitions and skills.
– Did the situation in the country affect Kyivshliakhbud’s contractors? Is there a shortage of asphalt or other materials necessary for the production?
– No, there are no shortages, all contractors are working. Why is the road construction industry important to Ukraine today? Because, for example, when we win a tender, a range of industries is getting involved. Soil, crushed stone and sand quarries start to work. Mineral filler, concrete and many other raw materials are necessary for the production. We need high quality granite paving slabs and everything related to diesel fuel. Kremenchuk [Oil Processing] Plant is operating.
All these spheres start to work as soon as we win a tender. The processing and goods and money chains are created.
– Intensive traffic on Kyiv roads has become one of the main problems of the city in recent years. A traffic standstill during rush hours has become a norm in some districts. How does Kyivshliakhbud participate in the elimination of the traffic problems in the capital? Are you planning to build new road junctions?
– We are not an authority and we cannot directly influence the development strategy of Kyiv. However, as far as I know, Kyiv City State Administration and the mayor, Mr. [Vitali] Klitschko pay much attention to the settlement of this problem. As a contractor, we carry out the set tasks after winning a tender. We have to fulfill them.
I know that many works are being carried out on road junctions in Kyiv downtown and expansion of bridges, which are being constructed and repaired today in order to facilitate traffic. I know that Kyiv had ordered and is studying now a traffic survey. Taking it into account the city plans the construction of new road junctions, expansion of streets, and modernization of the traffic lights system. I know that these works are in progress and we cannot ignore this so as not to lose our competitive ability.
I wish we were involved as consultants on the issues of further infrastructure development in Kyiv and other cities.
– Repairs and construction of bridges and highways is also one of the key infrastructure problems in Kyiv and all over the country. Do you plan to participate in projects in this sphere?
– We regularly file bids for such tenders as we have our bridge department, which has to be provided with orders. We have completed work on five road junctions in the country as of today. And now we are working in Poltava and Odesa regions, we have completed an overhaul of road junction on Odeska Square in Kyiv.
Currently we are working on highways as a subcontractor for the organizations that have won tenders. Today construction of bridges is a priority all over the country and especially in Kyiv. In general, it is one of the most important directions for our development as well.
– It is known that the RDS group uses concrete technologies. In your opinion, is it reasonable to build concrete roads in Kyiv and other cities?
– A few years ago we successfully entered the concrete construction market. The issue of reasonability of such construction is regularly discussed in the country. There are clear reasons for use of concrete: concrete is a raw material which is produced by Ukrainian manufacturers and it should cost less and be more durable taking into account the fact that construction solutions are rather serious and a guarantee for them is provided for a longer term than for asphalt.
At the same time, we should take into account the technology of concrete road construction. In my opinion, concrete surface should be used mainly on roads of first category with a median strip. When we build a new road, it doesn’t matter what we use – concrete or asphalt – because it has a separate land allocation and it does not hinder traffic. However, construction costs and constructability should be taken into account. We are building concrete roads N-31 in Poltava region and N-14 in Mykolaiv region.
Speaking about Kyiv, I think, concrete roads could be built on large avenues or belt highways. The concrete technology can be used today.
– In what concrete road construction projects of the RDS group outside Kyiv do you plan to participate?
– We are working on the N-31 Poltava-Dnipropetrovsk project in Poltava region and N-14 in Mykolaiv region, which is known as one of the worst roads in the country. We won tenders for more than UAH 1 billion in one region and for UAH 1.5 billion in the second one and we perform works without delays.
The government has allocated financing in full. We are planning to bid for tenders for the construction of the N-14 Mykolaiv-Kirovohrad road. We are also planning to participate in the construction of the M-05 Kyiv-Odesa road in Odesa region. It was reported that there are plans to build a concrete road between Kherson and Mykolaiv seaports. We will be taking interest in this project. We have invested a lot in the concrete pouring technology and we are very competitive in this segment.
– Are there any new technologies in the sphere you are planning to use?
– The road construction industry has been actively developing in recent years. We never miss important exhibitions abroad and actively participate in trade shows from Germany to the UAE. We won’t be competitive without buying new equipment.
Automated equipment ensures higher quality of laying asphalt as well as base layers. The compounds that are added to asphalt and geogrids that are used in the technology of laying the base layers. We constantly monitor all of this in order to stay an advanced company on the market. We have our own design organizations which controls these tasks.
We do the utmost to show our customers the implementation of various technologies which improve quality and sustainability of roads.
– Do you have a vision of Kyiv’s road infrastructure in future? What should the municipal authorities focus on while planning road construction?
– Naturally, as a company that has been working in the road construction business for 15 years, we have overhauled roads from the greenfield: from replacing all utility lines – all engineering networks – to coating with asphalt and road furniture. And we have been working in Kyiv for nine years.
I think a comprehensive approach to road construction is important as it allows making them durable and helps to prevent replacement of pipes and breaking new asphalt in future. As utility lines in the city are very old, it is obviously impossible to change everything immediately. All cities have the same problem.
On the sites where new construction is planned and the cities’ general plans are approved, it would be clear where a new residential district and a new shopping mall would be built. Of course, then we could instruct monopoly owners of gas, electricity, water supply systems and other organizations to plan all of these projects for a 10-15 years perspective before road overhauls. And this road would serve there for a long time and one would not need to dig anything there. Speaking about replacement of old utility lines, the city as a customer always takes these technical conditions into account.
I can see a strategy in approving the city’s general construction plan with Kyivavtodor, and replacement of all supply systems could be envisaged by it. We also need a traffic survey as it is something you plan for a five to seven years perspective depending on the construction of residential and non-residential buildings. An increase in traffic, expansion of streets and other things should be planned.
– On April 29, the Antimonopoly Committee of Ukraine received from non-governmental organizations an appeal on the alleged violation of the antimonopoly legislation by the RDS group and Avtomagistral-Pivden. Can you comment on the issue?
What a curious coincidence! On April 28, Head of the state-run Ukravtodor Oleksandr Kubrakov spoke about the industry’s most acute problem of the domination of “tender trolls” (that’s how we in our professional community call the companies that disrupt tenders), called the names of the organizers, the names of the companies, estimated the total number of broken-down tenders at UAH 8.7 billion, and in a day the Antimonopoly Committee of Ukraine receives this appeal…
I think the owners of the RDS group will comment on the situation on their own. As a top manager I can say for sure that we work in line with the legislation, cooperate with our western partners and it is unprofitable and unacceptable for us to break any rules. Such appeals to the anti-trust agency are obviously a result of a shadow fight for the introduction of harmful to the country principles in the new procurement methodology in the sphere of road construction.
– The National Association of Road Builders of Ukraine and several other self-regulating associations stood up for this new methodology of procurements in the sphere of road construction, but the document also has opponents. What is your opinion about it?
– I support the new methodology of holding tenders. Ukraine has been actively adopting European experience, norms and legislation for recent ten years, therefore we should not neglect the laws and rules that exist in the European practice of road construction companies.
Today events in our country are developing in two directions: world financial institutions invest money in our country for road overhauls, the financing is provided by the World Bank and the European Bank for Reconstruction and Development, which work according to tough rules and criteria. Among them there is a requirement to demonstrate a fulfilled contract for the same amount for which a new tender is announced, availability of the volume of works fulfilled under the contract which is put up for tender, availability of equipment, qualified specialists and many other things.
It is a worldwide trend that experienced companies should work on big national roads. It guarantees reliability and quality of roads in the future. Without this it will be hard to implement initiatives of the country’s leadership aimed at the improvement of road quality, while the so-called “tender trolls” (small companies that disrupt tenders in order to blackmail big companies) will remain on the market with all consequences for the government and citizens.
We have invested big money in the development of our capacities over 15 years, we raised loans, we leased assets and took credits in order to reach the level at which we meet European criteria and build national roads. We are strong enough to fulfill any kinds of projects in Ukraine and abroad.

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The RDS group of road construction companies as part of the tender of the Automobile Road Service in Luhansk Region won by the group with the approved cost of UAH 816.99 million will repair 32 km of the road on the section from the city of Schastia to Novoaidar on the N-21 highway, which connects Severodonetsk and Stanytsia Luhanska.
“In the city of Novoaidar, we have built a production base. Investment has already reached some $3 million. There will be an Amomatic-LMK VS 240S asphalt concrete plant with a capacity of 240 tonnes per hour. From here we will supply all inert materials and asphalt to the site,” the co-owner of the group, Yevhen Konovalov, told Interfax-Ukraine.
According to information in the ProZorro system, the expected purchase price was UAH 832.5 million, the competitors of RDS, which was represented by Rostdorbud LLC in this tender, were Avtomahystral-Pivden LLC and Onur Construction International LLC. The contract with the winner was signed this week.
Konovalov said that the company will have to carry out the following work: shaping of old asphalt and concrete surface, laying a 15 cm roadbed consisting of a mixture of the material obtained from the shaping of the old surface and the new stone sand mixture, prepared by mixing with cement and bitumen emulsion, adding two layers of asphalt and concrete of 10 cm and 5 cm and repair of exits, stops and road marking.
“The implementation of this project will create 450 new jobs in this sensitive region. Geodetic survey work is already underway at the site. Inert materials are being delivered to the production facilities and the installation of a mixer plant and the asphalt concrete plant is underway. Some 121,370 tonnes of asphalt and 137,000 tonnes of the mixture need to be produced and laid in three months,” the co-owner of RDS said.
According to the data in ProZorro, the contract cost is dynamic. The main work (UAH 788.8 million) is expected to be done this year. The term for the provision of services is until the end of 2021.
The village of Stanytsia Luhanska is the only checkpoint between Ukraine and government uncontrolled areas in Luhansk region. From 10,000 to 13,000 people daily crossed it before quarantine. This road also unites different regions of Luhansk region and it is of key economic importance.
The Ukrainian group of companies RDS, which is among top three largest road construction companies in Ukraine, includes Kyivshliakhbud and Rostdorstroy. Its core business is construction, modernization and maintenance of roads and bridges, construction of airfield complexes.
The company is building concrete road H-14 Kropyvnytsky-Mykolaiv. As part of the reconstruction of the H-31 Dnipro-Reshetylivka highway in Poltava region, RDS is building an overpass over the railway and the section of the first concrete road in Ukraine. In 2019, the company won a World Bank tender for work on the first category highway M-03 Kyiv-Kharkiv-Dovzhansky.
As of April 2020, the company operates in eight regions of Ukraine and has ten production facilities.
The ultimate beneficial owners of RDS are Ukrainian citizens Yuriy Shumakher and Yevhen Konovalov.

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