Rebuilding Mariupol by Russia: dangerous housing and companies that profit from reconstruction

Financial Times reсalls, that in May 2022, when Russian forces seized control of Mariupol, the United Nations estimated that 90 percent of the residential buildings in the city had suffered damage or destruction.  

Mariupol residents were adapting to the realities of life under Russian occupation and striving to reconstruct their shattered lives. Nearly two years later, a considerable number are still in a state of limbo, awaiting meaningful progress in rebuilding efforts. 

Russian model was based on outdated Ukrainian plans 

Just two weeks before the surrender of the last Ukrainian fighters, Russia revealed a comprehensive master plan for the city, crafted by the Russian Ministry of Construction in collaboration with the Moscow-based Unified Research and Design Institute. 

The document was a sham, writes Financial Times. The Russian model relied on outdated Ukrainian plans dating back to before 2016, failing to incorporate any of the subsequent developments that had occurred in the city. 

In the years leading up to the conflict, Mariupol had undergone significant progress, streamlining bureaucracy, investing in services and infrastructure, and creating new public spaces. This transformation had led to Mariupol becoming notably more modern and European. Vadym Boychenko, the Ukrainian mayor of Mariupol, now in exile, said that

"The Russians are dragging us back to Soviet times." 

Russia has 'rebranded' Ukrainian projects

In March 2023, during his visit to Mariupol, Putin toured the rebuilt facilities and the newly built Nevsky district. In protest, one woman exclaimed: "This is not real! It's all for show!" 

Ukrainian officials who escaped to government-controlled territory recognized their own projects. The Russian authorities, boasting of new schools and kindergartens, simply finalized the facilities built by Ukrainians. 

The new buses and trams with the inscription "Mariupol and St. Petersburg are twin cities" were rebranded Ukrainian models purchased before the war.

"It's our tram, it even has our license plates," says Mykyta Biryukov, former deputy director of the Mariupol Transportation Department.
 

“Reconstruction” by R-Stroy

Moscow poured billions of roubles into reconstruction, often through contracts awarded to private construction firms like R-Stroy, established just as Russia took control in May 2022. However, many Russian administrators and contractors lacked experience, with bureaucrats often being inexperienced, while construction firms had ties to government officials rather than expertise. This rushed rebuilding reflects a classic Russian "mega-project" approach, characterized by massive state budgets and tight timelines, often overlooking practical realities and fostering corruption due to a lack of transparency.

As R-Stroy secured high-profile projects like refurbishing the Illichivets Stadium and rebuilding university campuses in Mariupol, complaints from residents about their work increased. The FT interviewed numerous residents living in buildings under construction by the company and gathered testimonies from social media, painting a bleak picture of the situation.

While Russian contractors profit, Mariupol locals endure unsafe, half-built homes with shoddy renovation work

Residents endured harsh conditions with no heating, sewage flooding, and frozen pipes. Holes in concrete structures, caused by artillery strikes, allowed icy air to penetrate homes, worsening the already challenging situation.

“We waited 483 days for work to start on our house,” says Dmitri, resident of a 12-storey building under R-Stroy’s purview, located just south of Victory Avenue. “All sorts of excuses were given, but no one started the work.”

After checking the property in October 2022 and measuring for new windows in November, no real repairs started. Angry residents posted on social media about how bad things were. Some made walkways out of doors to cross gaps. Others put mattresses over broken windows. Videos showed rain coming in, and water freezing in buckets.

We called it the ‘Mariupol Flood’,” says Dmitri, who lives on one of the lower floors.

Mariupol residents have difficulties proving their ownership of pre-war apartments

Owners of historic sea-view apartments have discovered their buildings demolished and replaced with upscale housing promoted by Russian construction firms as "luxury" options. Original owners are often offered replacement housing on the city's outskirts.

Another resident told the FT she’d fought and lost a two-year battle to keep her home.

“All the flats have been sold,” she says. “The new people in power here, they promised far and wide that when the fighting was over, people would be able to return to their homes. And yet.”

“A big event is taking place today,” a resident says in a video posted online showing a new complex in the city centre. “Apartments are being handed over to their new tenants . . . but not to the real ones.”

Who stands behind R-Stroy?

After its establishment, R-Stroy opened an office on Victory Avenue, registering its local branch at a mall damaged during the war. The owners have diverse business ties, including connections to pharmaceutical giant R-Pharm, led by Alexey Repik, known for securing government contracts, according to Forbes.

The main shareholder, Nikolay Milkis, previously served as a deputy governor of a Siberian province. Milkis was associated with R-Pharm at the time of R-Stroy's establishment and formally joined R-Stroy in June 2022.

Repik sold all his shares in R-Pharm, with a third going to his mother, Valeria Daeva, and the remainder to management. Milkis invited Repik to invest in R-Stroy, but he declined and introduced Milkis to Ivan Sibirev, previously involved in the restaurant sector. Sibirev, who acquired 40% of R-Stroy in March 2023, transitioned from the gas industry to restaurants. 

Other shareholders include Konstantin Nuriev, the company's founder retaining 5%, and Valeriy Zolotukhin, who purchased 5% in March 2023. Zolotukhin is also the general director of the hospital construction company Petrusco, owned by Daeva, Repik’s mother. Petrusco made over 100 financial transfers to R-Stroy for worker salaries, according to transactions discovered by Russian investigative group, the Scanner Project, and seen by the FT.

Repik claims that R-Stroy was hired by his mother's company for a project unrelated to Mariupol's reconstruction. He asserts no involvement in R-Stroy's creation or operations and does not receive income from its work. Neither Repik nor R-Pharm are listed in R-Stroy's official records. However, when R-Stroy was established shortly after Russia's invasion, it adopted a logo remarkably similar to R-Pharm's. 

• Dmytro Zabavin, a deputy of the Mariupol City Council, reveals the situation with housing construction in the temporarily occupied territory of Donetsk Oblast, where Russia plans to build 147,000 m² of mortgage housing.