Press Release, 27.10.2020

The Chelyabinsk branch of the Anti-Corruption Policy Centre of the Yabloko party revealed signs of cartel collusion between municipalities and prisons in construction contracts worth 500 million roubels. Yaroslav Shcherbakov, head of the Chelyabinsk branch of the Centre and Chairman of the regional branch of Yabloko, applied to the Antimonopoly Service with a statement to initiate a case on violation of antimonopoly legislation.

The investigation was launched after reports in the media about the improvement of urban spaces by the penal colonies of the Chelyabinsk region. The text of the investigation is available here.

Anti-Corruption Policy Centre of the Yabloko party found out that over the past three years, the institutions of the penal enforcement system in the Chelyabinsk region received government contracts for almost half a billion roubels without bidding. The list of customers includes the following municipalities: Chelyabinsk, Magnitogorsk, Kopeisk, Verkhneuralsk, Verkhny Ufaley, as well as Sosnovsky, Yemanzhelinsky, Agapovsky and Chebarkulsky districts of the region. The contractors are six penal colonies and one prison.

The amount and number of such contracts has been growing exponentially from year to year: in 2018 – 32.5 million roubels, in 2019 – 177.4 million roubels, and contracts for 271.5 million roubels have already been concluded for the ten months of 2020.

Starting with purchases for manufacturing and installation of fences, municipalities began to purchase without bidding a large range of works on the improvement of urban spaces and repair of engineering networks.

However, correctional institutions often cannot independently implement such contracts: they do not have qualified workers, and convicts are not entitled to leave the territory of the penal colony in accordance with a general rule.

To carry out the work, penal colonies and prisons hire subcontractors also without bidding, based on their own preferences, and the regional Directorate of the Federal Penitentiary Service does not disclose the names of the companies working for the penal colonies as subcontractors.

Yabloko’s investigation showed that purchases from penal colonies were more expensive than purchases at regular tenders, and when ordering from subcontracts, the penal colonies can keep some of the money for themselves. Delays and claims to the quality of work are not frequent. Vivid examples are the purchase of bus stops in Magnitogorsk, repair of fences and a road to the Chelyabinsk airport.

“The market for the improvement of the urban environment is highly competitive, and bidding on it often leads to significant budget savings. Further inaction in this situation may lead to monopolisation of this market. The often mentioned competitive advantages of institutions of the penal system – the low costs and good quality of work – must be confirmed at the auction. If this is so, they will win,” Yaroslav Shcherbakov, Chairman of the Chelyabinsk regional branch of the Yabloko party and head of the Chelyabinsk branch of the Anti-Corruption Policy Centre, said.

According to Yaroslav Shcherbakov, he applied to the Chelyabinsk region department of the Federal Antimonopoly Service with a statement to initiate a case on violation of antimonopoly legislation by municipal customers and institutions of the Federal Penitentiary Service in the Chelyabinsk region and would seek recognition of all contracts concluded without bidding as agreements restricting competition.

The Chelyabinsk branch of the Anti-Corruption Policy Centre also demands from the Main Directorate of the Federal Penitentiary Service in the Chelyabinsk Region to disclose information on all subcontractors as part of the execution of municipal contracts for the improvement of urban space.