Ukraine fined the Chinese contractor $12 million for unfulfilled road repairs in Poltava and Khmelnytskyi regions

Through the court, Ukraine recovered almost UAH 500 million from the unscrupulous Chinese contractor Xinjiang Communications Construction Group. They carried out low-quality road repairs in Poltava region and Khmelnytskyi region.

This was reported by the press service of the Ministry of Justice.

The company had to repair several sections of the M-03 road in the Poltava region with a total length of almost 84 km and a 41-kilometer section of the M-12 road in the Khmelnytskyi region. Both contracts were terminated in 2018-2019.

The company did not even start work on M-03, and only 1% of the planned work on M-12 was completed.

The contracts provided for the Chinese contractor to provide two performance guarantees at the Bank of China for $3.3 million and $5.2 million, as well as providing a guarantee of the return of an advance payment for one of the contracts in the amount of $3.85 million.

After the contracts were terminated, Ukravtodor applied for a guarantee, but Xinjiang filed to enforce the alleged fraudulent practices, blocking the recovery.

The pre-trial settlement did not yield results, and Ukraine filed a lawsuit.

During August-December 2023, the courts of first instance and appeals in Urumqi (administrative center of the Xinjiang Uyghur Autonomous Region of China) ruled in favor of Ukraine and removed obstacles to the return of money.

"On January 17, 2024, funds totaling almost half a billion hryvnias in dollar equivalent were transferred by the Bank of China to the account of the State Agency for Reconstruction and Development of Infrastructure of Ukraine and to the account of the International Bank for Reconstruction and Development. The case is closed," Deputy Minister of Justice Iryna Mudra said.

The Turkish Onur was later chosen as the new contractor for the repair of the M-12 road in Khmelnytskyi region instead of Xinjiang, it won the contract for $54 million. The contract with Xinjiang was about $15 million cheaper.

The Xinjiang contract for the repair of the M-03 road in the Poltava region was divided between three contractors: Onur, Altkom and Rostdorstroy (infection — RDS). In total, their services cost $91 million, the contract with the Chinese was $33 million cheaper.