Concrete pillars stick out of the Dnipro River in the provincial capital of Zaporizhia, home to 750,000 people located 500 kilometers southeast of Kyiv. They were erected in 2004 and were meant to be the backbone of a new bridge.
But the bridge hasn’t been finished for 16 years.
The rusty pillars remind local residents of their dream — to have a second bridge to connect their densely populated city center and help ease traffic jams.
But this year, construction has been renewed on the 660-meter bridge, which locals call “a symbol of the city’s corruption.” There is now fresh hope that the work will be completed.
The bridge was included in the government’s highly touted Big Construction program. Turkish company Onur Taahhut from the Onur Group started building it after winning a $440-million tender in March.
While the bridge in Zaporizhia is just a drop in the ocean of Ukraine’s infrastructure problems, this is far from the only construction project that is currently being carried out by a Turkish firm in Ukraine.
“When the Ukrainian government announced its big plan, many Turkish construction companies got interested in the market and started to take part in tenders,” said Emre Karaahmetoglu, general coordinator at Onur Group Ukraine.
According to nonprofit Infrastructure Transparency Initiative, for the first six months of 2020, two Turkish firms were among the top five contractors for Ukraine’s infrastructure projects,
During this year, Onur Group alone has won tenders with a total value of $880 million.
Newcomer Turkish developer Ozaltin Insaat Ticaret won a $43-million tender in April to repair part of the country’s key highway that connects Kharkiv, Ukraine’s second largest city with 1.4 million residents located 500 kilometers east of Kyiv, with southern Ukraine.
Overall, in 2020, the Ukrainian government decided to allocate an unprecedented $3.9 billion for road repairs, including money from the COVID‑19 fund — a highly criticized move in a country where the disease is spreading rapidly.
“Road construction is a priority — even higher than health care,” said Fatih Sahin, representative of Marini Makina, a Turkish-Italian asphalt machinery company. “Most of the budget funds are invested into road construction.”
Oleksandr Kubrakov, head of Ukraine’s state road agency Ukravtodor, sees growing interest from different foreign companies during this year since the funding for the road sector has increased five-fold compared to last year.
As for Turkish companies, he believes that it is easier for them to enter the Ukrainian market due to the long-term activity of Onur Group. “They see the success of their compatriots, and, thanks to this, they begin to trust our market,” said Kubrakov.
Next year, according to Prime Minister Denys Shmyhal, the infrastructure spending figure will be even more impressive — $5.1 billion.
“I think we’ll see more Turkish construction companies on the Ukrainian market,” said Burak Pehlivan, chairman of the more than 200-member Turkish Ukrainian Business Association (TUID), which includes the Kyiv Post.
The workers of the Onur construction company lay asphalt on the Kyiv-Chop highway during the project that was completed on Nov. 12, 2010. The Turkish company, which currently is one of the key market player in the country, has entered Ukraine in 2004 and performed a number of infrastructure projects across Ukraine, including road repairs, building airports and dams. (Onur Group)
Reasonable choice
During a press conference on May 20, President Volodymyr Zelensky stated that he wanted to be remembered for building roads.
Although today many political experts believe it’s his strategy to keep his popularity from sliding even more, from a high of 73% to 29% as of September 2020, Zelensky’s ambitious goal might become a great opportunity for foreign construction companies.
For Pehlivan, Turkish companies’ interest in the Ukrainian market is logical.
According to a survey conducted by the U.S.-based Engineering News Record analytical magazine, among 250 largest construction companies in the world last year, 44 were Turkish. This makes the country the world’s second biggest contractor after China.
With a 4.6% share on the global market, construction companies from Turkey are not afraid of riskier markets like Africa and the Middle East or to bid competitively, according to Pehlivan.
Ukraine is on that list too. “Turkish companies are more ready to work with a lower margin than companies from Western countries,” said Pehlivan.
Plus, the countries are Black Sea neighbors, and such proximity gives a good reason for Turkish companies to do business in Ukraine.
“Because of many, many parameters they are very active and successful in Ukraine,” said Pehlivan, who also noted that Turkish companies had been interested in Ukraine long before Zelensky announced his top construction priority.
After almost three decades, they completed over 200 infrastructure projects across the country with a total worth of $7 billion.
Today Turkish construction companies have even stronger interest.
“Ukraine is considered as one of the largest countries in our region, which would require construction of vast amounts of new high quality roads and rehabilitation of existing road networks,” said Karaahmetoglu from Onur Group, which currently employs 6,000 workers and undertakes projects at 12 regions across the country — mainly in Poltava and Zaporizhia oblasts.
While Ukraine suffers from an economic downturn caused by the COVID‑19 pandemic, Turkish company Marini Makina has had record sales of equipment for Ukrainian asphalt plants among other eastern European countries this year.
While, during the previous five years, the total amount of sales was 20 million euros, in 2020 alone, the figure has already reached 30 million euros.
“We used to be among leading importers, but this year we left local producers behind and managed to become the industry leader in Ukraine,” said Sahin the company’s representative, according to a story published in the TUID website on Oct. 4.
Sahin forecasts that the firm will further grow on the Ukrainian market, benefiting from the political will of Zelensky. Despite rapid growth in newly detected coronavirus cases and possible another economic lockdown in the country, he believes that the construction trend will have an overall positive effect on the economy.
“With good and quality roads, trade between cities and countries will increase,” said Sahin. “And we decided to take advantage of these opportunities.”
Accusations of collusion
Over the past few years, the Nashi Groshi investigative project repeatedly revealed documents that allegedly indicate collusion on Ukrainian road construction market backed by Ukravtodor, where Turkish Onur Group often wins giant tenders. That also includes the tender for the Zaporizhia bridge, where only two Turkish companies participated — Onur Taakhhyut and Gocay.
The investigation suggests loyalty to Turkish companies from top officials, including Zelensky.
Both Ukravtodor and Onur Group deny any such accusations.
Ukravtodor responded to the Kyiv Post that it does not provide any preferences for domestic or foreign companies, insisting “the main value is the company’s experience and quality of work.”
Onur’s Karaahmetoglu called such insinuations “false, groundless and purposeful,” saying that since the current Ukrainian government wants to do a “major infrastructure improvement revolution,” it is looking for “experienced, skilled, and capable firms to do such high-level projects successfully.”
Pehlivan from the TUID also doesn’t believe there’s any corruption schemes in tenders involving Turkish firms.
“It cannot be true, we always trust our Turkish construction companies,” he said. “They are big businesses and there are complaints sometimes. It’s normal.”
