Just before Lockdown, Moscow Awarded $40mn Contract to Politically Connected Firm

A day before Russia’s massive coronavirus shutdown took effect, on March 27, the Moscow Mayor’s office signed a contract reportedly worth 3.2 billion rubles ($42.4 million) to purchase new concrete curbsides for the city, Meduza reports. 

The city’s largest contract for curbstone supplies so far was with “Bashkirsky Kamen” (Bashir Stone) Ltd., signed in August last year for a sum more than three times smaller than the latest procurement – 957 million rubles (now about $12.7 million). The deal was for the delivery of 376 kilometers (233 miles) of granite curbsides. 

The new contract is for curbsides made of concrete — a far cheaper alternative to granite. The paperwork currently available to the public does not indicate how many kilometers these supplies are meant to cover throughout the city.

The supplier that won the city contract was Betonnyi Zavod 222 (Concrete Plant № 222). There were no competing bids and the deal was awarded at asking price. Before winning the contract, Betonnyi Zavod had submitted a bid for a government contract just once before — seven years ago.

Betonnyi Zavod is part of construction conglomerate Krost, which is owned by Alexey Dobashin, who acted as an official proxy for Moscow Mayor Sergey Sobyanin and President Vladimir Putin in their latest re-election campaigns in 2018.

According to Russia’s register of companies, a woman named Yulia Shevchenko is the only person who has owned Betonnyi Zavod № 222 since 2015. (Before she was the listed proprietor, the company belonged directly to Alexey Dobashin.) In Moscow’s new contract for concrete curbsides, however, Betonnyi Zavod’s contact information lists an email address registered to Krost’s domain (222@krost.ru) and the company’s own website says it is part of the Krost conglomerate. 

In 2017, Meduza reported that one of Moscow’s biggest suppliers of concrete tiling for the city at the time was the company Bekam, which was also linked to the Krost-owned Gotika factory, judging by labeling on the tile packaging. Before the tiling contract in 2017, Bekam submitted a bid on just one other government contract: a winning bid in 2016 to supply paving flagstones for 398,000 rubles (now roughly $5,270) to the Presidential Affairs Department. 

After 2017, Bekam didn’t bid on any state procurement contracts for several years, until winning another deal with the Moscow Mayor’s Office in March 2020 worth 5.4 million rubles ($71,550) to supply curbstone to the “Avtomobilnye Dorogi Southern Administrative Okrug” public enterprise. The contract was signed as a single-source procurement agreement on the grounds that the purchaser needed the supplies “within a short timeframe.” 

Bekam’s new deal was also signed on March 27, the last “working day” before Russia suspended normal business operations to fight the spread of COVID-19. In the contract, Bekam’s office telephone number and factory address both coincide with properties owned by the Krost conglomerate.