Business news from Ukraine

RDS GROUP OF ROAD CONSTRUCTION COMPANIES CONGRATULATES CHILDREN ON WORLD CHILDREN’S DAY

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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KYIVSHLIAKHBUD CEO OLEKSANDR RASCHUPKIN: IF THEY DECIDED TO SCRAP THE BIG CONSTRUCTION PROJECT, UKRAINE’S ECONOMY WOULD FALL INTO AN ABYSS

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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KYIVSHLIAKHBUD TO EMPLOY 300 PEOPLE IN KIEV TO PARTICIPATE IN ADDITIONAL TENDERS

Kyivshliakhbud road construction company from RDS group of road construction companies intends to participate in tenders for the completion of the N-14 Mykolaiv-Kirovohrad road and the construction of the M-05 Kyiv-Odesa road in Odesa region, company CEO Oleksandr Raschupkin has said.
“There was information that it is planned to build a concrete road that will connect the ports of Kherson and Mykolaiv. We will also be interested in this project. We have already made large investments in concrete laying technologies, and in this segment we are very competitive,” he said in an interview with the Interfax-Ukraine agency.
Speaking about the current work, he noted that Kyivshliakhbud operates at seven sites in Kyiv, therefore, it is in strict compliance with quarantine restrictions. In particular, antiseptics, masks were purchased at all bases and dormitories, sanitary treatments were carried out, rapid tests that are used for the most minimal colds were purchased, 20 medical staff conduct daily temperature measurements for all employees. According to the director, at the end of April there were no COVID-19 patients from the company.
He also said that under a “moderately optimistic” scenario, involving the passage of the peak of the pandemic in the first half of the year, the company will be able to additionally employ about 300 people by the end of the year.

According to the head, despite the quarantine, there is no shortage in the supply of goods and services from contractors.
He also expressed hope that the company will act as a consultant on the further infrastructure development of Kyiv and other cities.
“I see a strategy in that the general plan for building the city is coordinated with Kyivavtodor and it would be possible to lay the replacement of all networks there. We also need studies regarding traffic, this is what you lay for 5-7 years in advance depending on the construction of residential and non-residential buildings,” he said.
The CEO added that despite the pandemic, the company and the group remain interested in entering neighboring markets.
“We constantly monitor announced tenders in Bulgaria, Moldova, Romania, Poland, these countries are close to us, although they have their own nuances. If we meet the qualifications of the organizers of tenders, of course we will file bids, we have ambitions and skills,” he said.
Speaking about new technology, Raschupkin expressed the opinion that in Kyiv concrete roads can be built on large avenues or on circular highways.
RDS Group is included in the top three road building companies of Ukraine. Its structure includes Kyivshliakhbud and Rostdorstroy. The core business is construction, reconstruction and maintenance of roads and bridges, construction of airfield complexes.

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UKRAINIAN RDS GROUP READY TO PROVIDE 850 JOBS

The RDS group of road construction companies is ready to provide 850 jobs to Ukrainians returning from abroad, as well as to all people who have lost their jobs due to the COVID-19 pandemic, co-owner of the group Yuriy Shumakher has said.
“Our team has more than 1,200 employees. And we will be glad to welcome about 850 new specialists to work in eight regions of Ukraine, where we build roads and important infrastructure facilities,” he told Interfax-Ukraine.
According to him, the coronavirus not only threatens the health of people, it also robs them of their work, confidence in the future.
“The construction industry is not quarantined! And we want to provide jobs for those who need it most,” he said.
The Ukrainian group of companies RDS 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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