General contractor to complete SIZO works without founder arrested for Kresty-2 fraud

General contractor to complete SIZO works without founder arrested for Kresty-2 fraud
Viktor Kudrin, Former CEO of OJSC Generalnaya Stroitelnaya Kompaniya (OJSC GSK)

The management of the Federal Penitentiary Service (FSIN) made a decision not to terminate the contract with the general contractor of the predetention center (SIZO) despite its founder is in custody.

The FSIN in St. Petersburg and Leningrad Region is not going to terminate the state contract with Generalnaya Stroitelnaya Kompaniya (General Construction Company – GSK), the general contractor for Kresty-2 predetention center despite its founder Viktor Kudrin has been put in custody, announced Major General Igor Potapenko, the department head.

"GSK is the only general contractor we have a contractual relationship with that is solely responsible for the commissioning of the facility to the customer that is UFSIN. The contract will not be terminated, so GSK continues its work," Igor Potapenko told the agency.

Potapenko also said that under the law, the contract with the company could be terminated in case of failure to meet the construction deadlines. According to the FSIN Head, GSK is going to turn in the finished building of Kresty-2 in Kolpino in the first half of 2017. The cost of construction of the pre-trial detention facility increased from initially being 4.3 billion to 12.7 billion rubles (from $75m to $222m) in a decade. Potapenko assured that it is not going to rise any more. However, previously, GSK subcontractors stated that they need another 1.5 billion rubles to complete the project.

Viktor Kudrin, the GSK sole founder, was arrested on March 18 and confined the next day for Embezzlement (part 4 of Art. 160 of the Criminal Code of the Russian Federation). Kudrin is suspected of embezzling 56 million rubles ($978.000) intended for the construction of the pre-trial detention facility, by signing acts of completion while the work was still unfinished.

A violent murder of Nikolay Chernov, the chief of Regional FSIN Technical Supervision and Operation of Facilities Department was something that made the predetention center construction so memorable. The FSIN officer was shot at the 8th kilometer of the Koltushsky Highway on March 2. Doctors fought for Chernov’s life for several days, but he died on March 7. His boss Sergey Moiseenko, deputy chief for regional FSIN capital construction, was arrested on suspicion of a contract killing. The superior and his subordinate had had disagreements on Kresty-2 construction. Chernov that was a direct supervisor of the new pre-trial detention center refused to sign a number of documents, saying there were imperfections and shortcomings in the construction project.

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