Poles won arbitration, but lost the contract. Controversy around the construction of a waste plant

wprawo.pl 1 week ago

The dispute surrounding the construction of the Lviv Waste Processing Plant enters the next stage. Following the withdrawal of the agreement with the Polish company Control Process S.A., the Lviv authorities entrusted the completion of the Ukrainian investment to ‘Kawer Enerji Plus’. The fresh contractor is to carry out the remaining scope of work for 113 million hryvnia, which is much more than expected by the contract with the Polish company.

On 11 June, the State Inspection of Architecture and Urban Studies of Ukraine issued a “Kawer Enerji Plus” licence to carry out works on investment. This means the formal start of a fresh phase of construction, despite the legal dispute between the Lviv authorities and the erstwhile contractor which has lasted for many months.

Control Process S.A. was liable for the implementation of a task worth about EUR 40 million. In March 2026, the city unilaterally terminated the agreement, accusing the company of defaulting on any of its liabilities. The Polish company rejected these accusations, indicating that delays were a consequence of the war, and that the level of investment advancement exceeded 95 percent.

The position of the Polish company confirmed arbitration. The global Chamber of Commerce found that termination of the contract was unjustified. Control Process besides won 7 proceedings before the FIDIC arbitrator, who besides found the actions of the Lviv authorities unlawful.

Despite these decisions, the city did not pay out all the funds due to the Polish company or let it to complete its investment. Instead, it was decided to choice a fresh contractor.

The first effort to replace Control Process was already in June 2025. At the time, the State Inspection of Architecture and Urbanities refused permission, indicating deficiencies in environmental documentation. After the termination of the contract with the Polish company, the city re-submitted the application, but was rejected due to method errors. Only another procedure ended with the issue of a permit.

The fresh controversy concerns the cost of completing the construction. A announcement submitted by Ihor Hec, president of the Advisory Group of the National Association of Architects of Ukraine, was sent to the peculiar Anti-corruption Prosecutor's Office. According to him, the investment may be subject to financial irregularities.

Hec claims that the scope of the work which Control Process was to execute for about 69 million hryvnia was given to the fresh contractor for 113 million hryvnia. This means a difference of nearly 44 million hryvnia.

According to the author of the notice, specified a crucial increase in costs can prove that there is no economical or corruptive activity. In sharp words, he estimated that the dismissal of the Polish contractor could have created the anticipation of spending much larger public funds on the same scope of work.

Hec besides complains that despite the submitted notifications, the Specialised Anti-corruption Prosecutor's Office and the National Anti-corruption Office of Ukraine have not yet taken effective investigative action in cases concerning the construction of the plant and the circumstances of removal from the task of the Polish company.

Comment: The company has performed the service, but has not received the funds due... This is what “brotherly” Polish-Ukrainian relations look like in practice...

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