Boris Ostapyuk
On September 8, at the request of Prime Minister Arseniy Yatsenyuk, an audit of the financial and economic activities of the state-owned enterprise Ukrzaliznytsia (UZ) was launched.
On September 8, at the direction of Prime Minister Arseniy Yatsenyuk, an audit of the financial and economic activities of the state-owned enterprise Ukrzaliznytsia (UZ) was launched. As a result, the company's CEO, Borys Ostapyuk, appointed by the new government, was temporarily suspended from his duties.
During the reign of President Viktor Yanukovych, Ukrzaliznytsia awarded a significant portion of its contracts to companies associated with the president's construction. INSIDER decided to investigate whether the situation has changed since the appointment of the new management.
Purchases at a rapid pace
Before becoming CEO, Ostapyuk had held several high-ranking positions within Ukrzaliznytsia. Previously, he served as the director of the state-owned enterprise Ukrzaliznychpostach and as deputy general director of Ukrzaliznytsia. All of his previous positions were related to the state-owned enterprise's procurement.
Since April 1 of this year, all divisions and enterprises within the Ukrzaliznytsia structure have held more than 600 tenders for a total of approximately UAH 2,8 billion.
Among other things, this included payment for utilities and food for each of the six railways, hospitals and other divisions of UZ.
Ukrzaliznychpostach, the state-owned railway company, held 120 tenders. About a third of them were cancelled for various reasons, while those that took place cost nearly 1,7 billion hryvnias.
75% of this money went toward repairing old cars and tracks—1,23 billion hryvnias. Another 356 million went toward fuel and lubricants, 46 million hryvnias toward textiles, and about 10 million hryvnias toward construction materials.
INSIDER previously reported that procurement for the needs of the ATO, for approximately the same period, cost the state three billion hryvnia.
Tender champions
The list of companies that won entire tenders and individual lots is quite long. But only a select few secured the truly major contracts. Of all the money spent by Ukrzaliznytskyi Postach since April 1, just ten companies will earn over 80%, or 1,4 billion hryvnias.
The largest contract, worth 220 million hryvnias, was awarded to Dniprozaliznychpostachannya (DZP). It is owned by Oleksandr Dyadechko and managed by Dmytro Abramov. Abramov was previously a shareholder in Dnipropetrovsk Switch Plant, DZP's only competitor in the tender. The winner will supply parts for switch points.
Viktor Pinchuk's Interpipe Ukraine will earn slightly less—207 million hryvnias—for supplying wheels for railway trains. Interpipe conducts such purchases annually.
Several rail supply contracts worth UAH 177 million were awarded to Transinvest Holding, part of Rinat Akhmetov's SCM. Transinvest also wins similar tenders every year. Its only competitor this year and last year was Dnipropetrovsk-based Spetsukrpostachannya, registered to the Cypriot company Umistreco Holdings Ltd.
The Lviv-based company "Ekspozitsia" won the bid for the supply of rubber gaskets and fasteners worth UAH 167 million. Its owner is listed as Andriy Bokhenok, but the company's real beneficiary is said to be Yaroslav Dubnevych, a member of parliament from the Ukrainian Railways (UDAR). "Ekspozitsia" had never previously won contracts from UZ. However, Yaroslav and Bohdan Dubnevych's "KRT" corporation was a major supplier of rail fasteners in 2008-2010, when UZ was headed by their fellow Lviv resident Mykhailo Kostyuk.
Inkomm will supply five tons of bolts and washers worth UAH 140 million to UZ. The company is officially owned by Nadiya Bohdan from the village of Trushky in the Kyiv region. Her only competition in the bidding was Alevarus, owned by Luxven LLC and Kyiv resident Oleksandr Tymoshenko. Until recently, Inkomm was managed by Pavlo Khlevnoy, who is associated with Luxven and Tymoshenko.
Azovkabelsbut will earn UAH 108 million from supplying cables to Ukrzaliznytsia. The company is registered to Kyiv resident Anna Beletskaya. She has not previously received any government contracts.
The company "EK Zenit," registered to Svetlana Grushko, won approximately 20 lots in various tenders for spare parts worth a total of UAH 56 million. In most cases, its only competitor was Leonid Kolosov's "NPP Lokomotiv." Until the summer of 2011, both companies were registered at the same address in Kyiv, and until January 2012, they shared a single phone number.
Another 48 million hryvnias will be received by BMZ, which, according to Nashi Groshi, is linked to Anton Prygodskyi, a member of the Party of Regions, and the Yanukovych group. The company began winning contracts with Ukrzaliznytskyi Postach just six months after its founding in August 2012. Since then, it has earned approximately 150 million hryvnias.
New trends
The example of the tender won by the two remaining companies on the list illustrates a certain trend in Ukrzaliznytsia's public procurement practices that emerged after the appointment of new management.
Large contracts began to be divided into several lots, which was intended to allow smaller contractors to participate. This method had been used before, but it is now used much more frequently.
The tender for the purchase of oils and lubricants for Ukrzaliznytsia, worth a total of 356 million hryvnias, was scheduled to take place in April, but the date was postponed several times. Furthermore, the technical specifications were changed nine times.
The tender was divided into five separate lots. Ten companies submitted bids for these lots. Six of them were later rejected. Because each company submitted bids for different lots, it was ultimately difficult to determine who was competing with whom.
In this case, all the winners—Levada Oil, Element Oil, and Trading House Agrinol (not among the top 10)—submitted bids for only one lot, so as not to compete with each other. After most of the bids were rejected, only one firm—East Mining Ukraine—continued to compete with all three.
East Mining is registered at 1 Umova Street in Donetsk. Apparently, this is a common location for legal entity registration, as several hundred other companies are registered there. East Mining is owned by Donetsk resident Oleksandra Tymoshenko and Hungarian company East Mek.
The main winner of the tender, Levada Oil, which will receive 163 million hryvnias, is also registered at this address. This company was established in April of this year and is registered to Andriy Gayevyi and Yuriy Kiyashko.
There is no power
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