How the approach to cost estimation in Ukraine has changed (considering reforms since 2021)

Introduction

Since 2021, Ukraine’s construction cost estimation system has undergone major reforms. The old Soviet-style DSTU standards and pricing collections were replaced with the modern “Cost Norms of Ukraine” (KNU). Over the following years, the system was repeatedly updated: new sector-specific collections were published, wartime amendments were introduced, inflation adjustments were formalized, and special procedures for inspecting war-damaged facilities were added.

Before 2021

Prior to the reforms, the cost estimation system relied on:

DSTU standards and pricing collections, largely inherited from the Soviet system;
rigid unit rates with limited flexibility;
insufficient attention to resource-based costing (materials, labor, machinery);
weak adaptation to real market prices.

This created a significant gap between actual construction costs and official estimates.

The 2021 Reform — Order No.281

On November 1, 2021, the Ministry of Regional Development issued Order No.281, approving the “Cost Norms of Ukraine in Construction” (KNU). This marked a turning point in cost estimation.

Key changes introduced by KNU:

adoption of the resource-element method (focusing on resources, consumption rates, and actual market value);
unification of cost documentation forms (No.2-P, No.3-Na, etc.);
clear rules for applying norms and calculating costs;
gradual replacement of numerous outdated DSTU standards and Soviet-style collections.

This was a step toward greater transparency and alignment with real market conditions.

Updates in 2022–2023

Order No.67 (April 30, 2022)

introduced the first amendments and clarifications to KNU guidelines;
defined the procedure for inspection of war-damaged facilities;
adjusted the application of certain collections.

Sectoral collections (February 2023)

publication of resource-element norms for different sectors (roads, bridges, utility networks, airfields);
provided detailed practical tools for applying KNU across industries.

Order No.854 (September 22, 2023)

addressed economic instability and wartime realities;
introduced rules for calculating reserves for risks and inflation;
clarified requirements regarding construction timelines and supply chains.

Wartime influence on cost estimation

The war significantly reshaped approaches to estimation:

development of special methodologies for war-damaged facilities;
dedicated cost tables and collections for reconstruction projects;
rules for inflation adjustments considering project duration and risk factors;
supply chain disruptions and material shortages reflected in cost calculations.

Technical and practical changes in methodology

Shift to the resource-element method instead of outdated unit pricing.
Clearer rules for investor cost documentation (mandatory forms by project type).
Focus on market-based pricing and inflation indices.
Wartime-specific adjustments: modified labor norms, extended project timelines, and risk reserves.
Digitalization: software vendors regularly update databases with new KNU collections and amendments.

Practical consequences for professionals and clients

Estimators must frequently update software libraries and stay current with Ministry orders.
Clients should demand explanatory notes with precise references to KNU editions, orders, and applied indices.
For state-funded projects, strict compliance with approved forms is mandatory; otherwise, projects may fail expertise or financing approval.

Chronology of reforms

Pre-2021 — reliance on DSTU and outdated pricing collections.
Nov 1, 2021 — Order No.281: adoption of KNU.
Apr 30, 2022 — Order No.67: clarifications, rules for damaged facilities.
Feb 2023 — publication of sector-specific collections.
Sep 22, 2023 — Order No.854: wartime adjustments and inflation rules.

Recommendations

For estimators: keep KNU libraries updated in software; reference orders and amendments in reports.
For clients: require cost documentation with explanatory notes, inflation reserves, and clear legal references.
For reconstruction projects: apply special wartime methodologies introduced in 2022–2023.

Conclusion

Since 2021, Ukraine’s cost estimation system has been completely restructured — moving from rigid Soviet-style norms to a modern resource-element approach based on KNU. Pandemic disruptions, economic instability, and wartime challenges accelerated the need for flexibility: new collections, inflation adjustments, and special procedures for damaged facilities.

Today, cost estimation in Ukraine combines detailed normative tools, market-oriented calculations, and digitalized processes — making it more transparent, adaptable, and aligned with global standards.