Moscow and its urban development 

Moscow and its urban development
Photo: Andrey Gordeev / Vedomosti

"Repairs cannot be finished, only stopped," a well-known Russian satirist Zhvanetskiy once said. This joke is the best illustration of what is now happening on the streets of Moscow. Dilapidated roads and pavements, workers in orange vests trotting about, and piles of construction waste have become a sure sign of summer in the capital.

This year, the scale of urban land improvement in the city is nothing short of astounding – the construction works will be conducted on the Varshavskoye, Kashirskoye, Yaroslavskoye, Leningradskoye and Mozhayskoe highways, on the Garden and Boulevard Rings, on the Tverskaya, Lyusinovskaya, Mytnaya, Novy Arbat and 48 other streets. The cost of works is 22.4 billion rubles. The administration is obviously striving for perfection, and that would have been worth a praise, if not for a small detail - most of these streets and highways had already been repaired in 2015, 2014 and 2013.

Highways to Heaven

In recent years, Moscow highways became the center of attention for the metropolitan officials. Just five years ago, they launched a large-scale reconstruction work on the main highways: Yaroslavskoye, Varshavskoye, Kashirskoye, Leningradskoye, and Mozhayskoye. Some 20 billion rubles were allocated from the budget for this purpose. No sooner had the initial stage of the urban development finished, than workers once again started repairing the renewed roads. In 2015, a new urban project was launched under the title "My Street."

More than 5 billion rubles were spent on highways alone. In total, the "My Street" program cost more than 20 billion rubles over the past year. These funds were used to replace curbs, bus stops, benches and trash cans. The same went for sidewalks and lawns, which all of a sudden became inappropriate. Curiously, the urban developer of the Yaroslavskoye highway, the Megapark Company, was honest enough to explain that most objects were replaced only to fit in the new design, in style of the Russian North. The mayor's office appreciated such a creative approach. Last year, the cost of the works on the Yaroslavl highway amounted to 651 million rubles. At the same time period, the air-cable networks were moved, and the fronts and roofs of buildings adjacent to the highway were repaired. All of the work statements for the improvement of the rest of the highways were almost identical. Only the figures were different, in particular, the price of the contracts. Similar work was worth 816 million rubles on Kashirskoye highway, 1.35 billion on Leningradskoye highway, and even 1.67 billion on the Varshavskoye. The Muscovites were promised cost-effectiveness thanks to the durability of paving slabs, but in the end the money remained "in the family," meaning in a few families close to the mayor’s office.

Развязка на Каширском шоссе

A junction at the Kashirskoye highway
Photo by:

The tender for repairs on the Varshavskoye highway was won by the Union Construction Company, owned by Denis Dedov. The company has been winning tenders of the metropolitan institutions practically since its foundation in 2012. Another company participates hand in hand with Union in the procurement programs - the Alliance Limited Liability Company of Vadim Samylovskih. According to the RBC data as of October 2015, both firms won the tenders announced by the mayor's office in the amount of 2.3 and 5.69 billion rubles, respectively. In addition to situations when Alliance and Union accidentally meet during the auctions, they also share a common legal address - Varshavskoye highway, 104. A series of strange coincidences follows after that.

Before 2013, the Alliance Company had a prefix "USL" in its title, which stood for "UniversStroyLyuks." The company of the same name was owned by Alexey Biryukov (brother of the Moscow First Deputy Mayor Pyotr Biryukov), and had a whole construction holding under its wing. Smyslovskih had the pleasure of not only working as chief engineer in UniversStroyLyuks, but also being the co-owner of the EVS Company, together with Evgeny Biryukov (Pyotr Biryukov nephew, as some sources imply). Last year, this EVS Company won the urban development on the Serpukhovskaya and Lyusinovskaya streets. This drama would not have been complete without an underdog competitor, played by inseparable Alliance and Union. And the last actor in our list is the Avtodorstroy LLC, which won the last year's tender for the repairs on the Podolsk highway, Pavlovskaya and Bolshaya Tulskaya streets. Avtodorstroy’s contact information matches with that of Union. Moreover, the two companies, as well as EVS, are serviced by a small bank Gorod, RBC reported. The Gorod’s office is also a legal address for organizations not only of Pyotr Biryukov’s brother, but also his daughter. And it is Pyotr Biryukov, who is in charge of the "My Street" project in the Moscow city government. In February 2016, the Moscow Department of the Russian Federal Antimonopoly System opened a case № 1-11-1913/77-15 into the antitrust offence, committed by Union, EMS, Avtodorstroy, Alliance, and Story Vest of the West, on suspicion of price fixing. However, the case has stalled and a final decision has not been made so far.

In fact, the Moscow mayor's office has tamed its own team of permanent procurement winners. Together they participate in the tenders, occasionally giving each other a place in the sun. For instance, in 2015, the tenders for the repairs on the Yaroslavskoye highway and Mira Avenue were attended by the companies Moskapstroy and Magma-1. Forbes reported that 50.33% of Moskapstro is owned by Sistema Joint Stock Finanicial Corporation, which belongs to Vladimir Yevtushenko. At the same time, Moskapstroy is a co-owner of Magma-1. Both participants did not quarrel about the state contracts, since each got its share – Magma-1 received Yaroslavskoye highway, and Moskapstroy – Mira Avenue. It would seem that the issue of highways was closed. But in reality, this was just the beginning.

Margin for error

In November 2015, Moscow Capital Repairs Department started setting new tenders for the same highways. It appears that the previous contractors were too eager to spend every ruble of the allocated funds, and somehow forgot, for example, to build a total of 40 km of cable collectors. However, the mayor’s office has no grudges against them, and concludes new contracts with the same companies, which had made all this mess. New constructions requires further urban development. Which means the history is likely to repeat itself, with a new set of tiles, lawns, curbs, and other objects that always fail to remain in place in the Russian capital.

Источник: сайт госзакупок, расчеты РБК

Table: the cost of an additional development of the streets of Moscow. 

Source: website of state contracts, RBC calculations

We will get back to the topic of streets development a little later, but for now we will focus on the repairs of highways. Most major contracts went to perennial favorites - the companies Avtodorstroy, Union and SpetsStroy (Federal Agency for Special Construction). The latter is the undisputed leader in obtaining state contracts under the "My Street" program. In last year alone, SpetsStroy won tenders worth a total of 5.47 billion rubles, Vedomosti reported. This year, the company managed to win tender for repairs of the Boulevard Ring worth 4.6 billion rubles.

Результат определения поставщика и сведения о контракте из реестра контрактов

The result of an attempt to find the supplier and the contract information from the register of contracts


Spetsstroy was founded in 2003, but started participating in the public procurement in 2014. Since that time, the company has been constantly enjoying its numerous victories. But this blind luck bears the traits of a certain person, who is now very familiar to us, Pyotr Biryukov. We can start with the fact that, having signed the first contracts with the Moscow mayor’s office, the permanent chairman and owner of Spetsstroy Gennady Pak sells the company to Anton Bazanov. RBC reported that a user of the LinkedIn social network with the same name mentions the Capital Group construction holding as his employer. The owners of Capital Group are Vladislav Doronin, Pavel Tyo, and Edward Berman.

A certain Story Tvik Company participated in multiple procurements won by SpetsStroy. Apart from participating hand in hand with SpetStroy on tenders, this company is known only for the construction of apartments in Novokosino. The client is TekhnoAviaAlyans, 50% of which is owned by Pavel Tyo. Moreover, as soon as Story Tvik had become a contractor of the TekhnoAviaAlyans, Tyo sold 50% of its shares to his business partner Igor Cherdyntsev. Tyo and Cherdyntsev are also the owners of two other companies. And finally, the daughter of First Deputy Mayor Pyotr Biryukov, named Irina, had joint business with a certain Olga Tyo. Together they headed the Teskla Company. For now, it has not been possible to establish if Olga Tyo and Pavel Tyo are related. Still, the fact of partnership between the Biryukovs and the Tyos can be substantiated by the activities of Pyotr Biryukov’s son, named Alexander, who began his career in Capital Group.

SpetsStroy has obtained a contract which indeed suits the company’s ambitions. Some 6 km of concrete curbs will be replaced with noble granite. SpetsStroy will also replace 60 bus stops, which managed to get old in just a year, laying granite tile beneath them. The fact that lawns are gonna be renewed once again, is not even the subject of discussion. The same goes for other highways, granite will be used almost everywhere. On Leningradskoye highway, air pipes of utility tunnels will be coated with this material, and even billboards on certain streets will be encased in granite. It is worth noting that the estimates for Varshavskoye and Kashirskoye highways contain an express indication as to which companies should supply the materials, and whose products the contractor should purchase. For instance, the expense budget for both highways in 2015 contains the line "drain shaft, PK NIS LLC." The budget for Kashirskoye highway in 2016 has the line "Air pipe housing. Aludeka-K Company." In general, an indication of trademarks, articles, etc. can be found in a variety of state contracts for urban development. "Specific brands and manufacturers cannot be included without an adscript "equivalent," and this is a violation of and a limitation of competition," the lawyer of the Anti-Corruption Foundation (FBK) Lyudmila Sobol said. However, the authors of the "My Street" program seem to think that all of the Moscow streets are literally theirs.

All around me are familiar faces

Among the roads, which are subject to constant renovations, is the Mozhayskoe highway. This year, the funds allocated for its development are rather scarce. The winner of this tender though, is a much more intriguing topic – the Atex Federal State Unitary Enterprise. Being a part of the Federal Guard Service of the Russian Federation (FSO), Atex has access to objects of any security level. As a result, the company gets all the tenders for landscaping of sensitive facilities. Only recently, the company received two large state orders - the landscaping of entrance to Rublevskoye and Mozhayskoe highways and the design and survey works on the landscaping of the Garden Ring. Atex prefers to entrust subcontractors with these works. Its all-time favorite is the Forum Group of Dmitry Mikhalchenko and affiliated structures, including the Dormet, "Stroykomplekt and Stroyfasad companies.

For some time, the director general of Baltstroy LLC (one of the Forum’s key companies) Dmitry Sergeyev has been the co-owner of Dormeta and Stroykomplekt. A certain Stanislav Kuner served as the director general of Stroyfasad at about the same time period. The New Times claims that Kuner and Sergeyev are friends. Kuner’s record list also specifies that he was the director for construction in Baltstroy. Still, these companies could hardly become absolute winners in the tenders of Atex, if not for Mikhalchenko’s business partner and co-owner of Forum, former KGB General Nikolay Negodov. The New Times reported that since his service, Negodov has been tight friends with Evgeny Murov, who until recently headed the FSO. Strong friendship also strengthens business relationship. In 2011-2013, the same Stanislav Kuner served as deputy director of Atex, and the company’s current director had gained his management experience in the Fenix Company, controlled by Mikhalchenko. Friendship and mutual assistance turned Mikhalchenko-Negodov structures into almost full-time contractors of Atex. At the procurements, both companies participated together, passing the right for championship to each other from time to time.

This spring, the business reputation of Baltstroya was practically destroyed by the so-called "case of restoration." FSB investigators uncovered a corruption scheme, created by Deputy Culture Minister Grigory Pirumov. The director of Baltstroy Dmitry Sergeyev also went in prison, as the investigation claimed his company was part of Pirumov’s criminal group. The budget lost about 50 billion rubles, according to the estimates of the investigators. But nobody would dare to assess the true damage caused by these barbaric restorations conducted by Baltstroya. Despite all of that, Atex keeps forgiving its friends, and Mikhalchenko-Negodov companies keep winning state contracts as if nothing had happened. For example, the landscaping contract for the Sakharov prospect was entrusted to Dormet. The capital repairs of residential houses on the Kotelnicheskaya embankment will be performed by Stroyfasad. The design and survey works on the Garden Ring for 355 million rubles will be carried out by Baltstroy, which previously had mutilated the Izborsk Fortress. It appears that the Garden Ring will become a dangerous place, not a beautiful one.

Решения комиссии об утверждении победителя закупки

The decision of the committee regarding the winner of the procurement


Streets of granite

As we mentioned in the beginning, this summer the construction works will be conducted on 47 streets and boulevards of Moscow. Many of them were trenched the year before, the examples being the Mira Avenue, the Bolshaya Tulskaya, Lyusinovskaya and Mytnaya streets. Contractors and the costs of their work are presented in the table above. To illustrate the scale of summer psychosis the city administration is having, we will elaborate on two of the most expensive street tenders. The second place goes to landscaping on the Tverskaya Street. The contractor here is an unknown firm Rador M, which, apparently, is also engaged in the production of granite. This year, Rador M has become a supplier of granite curbs for Moscow state-financed institution Avtomobilniye dorogi (meaning, "motorways"), Vedomosti reported. The cost of the contract amounted to 1.4 billion rubles. Rador M" was created in 2011 by Denis Denisenko, and a year later sold to Viktor Polyakov. These businessmen seemingly have no connections with state structures, but the contact information of Rador M matches the phone of the Road Process & Products LLC. This year, the latter also concluded major contracts with Avtomobilniye dorogi.

The repairs on the Tverskaya Street will cost the city budget 895.9 million rubles. On these funds the workers will dug the street once more and dress it in granite. They will lay the missing cables, repair control wells and front sides of houses, throw out some grass here and there and add 126 trees to it. Muscovites should recalled that the same thing happened in 2013.

Three years ago, the Moscow mayor’s office recalled that there had once been trees on the Tverskaya Street. Without hesitation, the officials rushed in to landscape the street. This included a lot of money - a total of 281.5 million rubles. To justify this astronomical sum, the landscaping process was described as "experimental." In the end, they authorities failed to bring back the linden alleys there, only certain individuals for sure gained some green stuff.

Результаты озеленения Тверской в 2013 году

Results of landscaping on the Tverskaya Street in 2013

Photo by: Ilya Varlamov

It all started when the Moscow mayor's office placed a state order worth 269.5 million rubles for a mere landscaping of the Tverskaya Street. These funds were to be spent on 69 trees, 619 shrubs and 631 minor objects. The plants were to be placed in containers with an annual replacement of all this splendor. The ensuing storm of indignation forced the authorities to back off, and the auction was canceled. However, it turned out that the guile of those sitting in the mayor's office knew no bounds. They immediately came up with a new idea how to obtain the money without causing themselves too much trouble. As a result, we have a Decree of the Moscow Government № 128-PP "On the execution of the landscaping on the Tverskaya Street with the use of experimental methods of landscaping and infrastructure development and providing subsidies to state enterprise "Center for the implementation of works and the provision of environmental protection services" in order to reimburse for the conduction of said works" signed by Moscow Mayor Sergey Sobyanin himself. It was at this stage that the landscaping became experimental. Without too much noise or any tenders, the money was gone from the city budget. The above mentioned state enterprise received more than 219 million rubles for its experiments. But that was not even the end of the story. 

After that, the state enterprise decided to hire a subcontractor to check if the linden tress had actually been planted. The company announced a tender with a certain NMTsK LLC worth 289.6 million rubles. Apparently, they thought that 219 million was not enough, and that some money would not hurt – after all, their corporation was financed from the budget, and the budget is a bottomless hole. The terms of reference was copied from another project canceled a long time ago. The number of trees, bushes and benches even got smaller. The order stipulated 20 days for the works, although the Decree № 128-PP mentioned the final date of the landscaping works as the end of 2017. So, what did this contradiction stand for? Naturally, it helped organize a few more tenders for additional works, because linden trees and bushes in containers would have to be taken up, if they were to survive. Incidentally, the first additional order came soon enough. The general contractor thought that the land for the trees needs to be prepared, and the existing contract for 298.6 million rubles unfortunately was not enough for that. As a result, a new tender was set up with a starting price of more than 2 million rubles. Later, the TV channel Dozhd found out that in the end, each tree and shrub had cost 8 million rubles.

The winner of the tender was MISK JSC. According to the SPARC database, the company was established in 2010, in the course of reorganization of Moscow Engineering and Construction Company JSC (in brief, MosInzhStroy), which, in turn, happened thanks to the reorganization of the eponymous LLC. In the same year, when the MosInzhStroy was reorganized into MISK JSC, the company’s Board of Directors introduced a new member, Vladimir Resin. Now it is small surprise that MISK regularly wins state contracts worth tens of billions of rubles.

After previous scandals, current works worth 895.9 million rubles on the Tverskaya Street look like sheer mockery. Another example of such mockery will be seen on the Novy Arbat, where the landscaping works are going to cost 1.9 billion rubles. The winner of the contract was the same old Dormet. The terms of reference includes a typical list of assignments: laying cables, installation of wells, repair of existing wells and of building facades, street paving with granite and landscaping. By the way, Novy Arbat can consider itself luckier than Tverskaya - the trees there will be planted in the ground. Additionally, the budget documents are even more interesting this time than the terms of reference. It turns out that two granite benches 150 m in length will cost nearly 78.8 million rubles. At the same time, a single round bench, also made of granite, is worth much less - only 2.7 million rubles. Like always, the mayor's office found a spare coin for the greenery. Each of the 187 trees to be planted on Novy Arbat will cost more than 189.8 thousand rubles.

To sum it up, we will quote the director of the Institute of Transport Economics and Transport Policy of the Higher School of Economics Mikhail Blinkin. The specialist explained the essence of the "My Street" program in a clear and concise manner: "We are doing this not because we are hungry, this is all a dessert now." Indeed, it looks like a feast during the plague. And it is unlikely to end any time soon.



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