Ukrzaliznytsia buys air conditioners for $1.2 million, five times market price

An old locomotive belonging to Ukraine’s state-owned monopoly Ukrzaliznytsia parked at the Darnytsia Railway Station in Kyiv on June 19, 2019. (Oleg Petrasiuk)Photo by Oleg Petrasiuk

A subsidiary of Ukrzaliznytsia, Ukraine’s state-owned railway monopoly, ordered 19 train air conditioning systems for a total of $1.2 million. The maximum price online for 19 conditioning systems of a similar type is $260,000, Ukrainian investigative media Nashi Hroshi reported on Jan. 17.

The procurement was ordered by Ukrzaliznytsia’s Manufacturing Support Center via the Prozorro online procurement system. Only two companies participated – Ekvator factory and A.T.O.R. company, both offering the same Ekvator conditioning systems produced by the former.

A.T.O.R. produced remotes for the Ekvator conditioning systems.

According to the tender, each air conditioning system was bought for $65,000, with those purchased only slightly different from $13,750 units produced by world-renowned brand Mitsubishi.

The air conditioning systems are to be shipped by the end of the year.

“We can’t control (the buying of) each air conditioner, each door knob,” Prozorro head Vasyl Zadvornyy told the Kyiv Post over the phone on Jan. 17. He said that those who are dissatisfied with the procurement can file a complaint with the Anti-Monopoly Committee.

Additionally, Tida Technic Ltd., a company registered in the United Kingdom, asked Ukrzaliznytsia’s subsidiary to combine 15 similar procurements issued by the company. Tida Technic stated that Ukrzaliznytsia’s subsidiary had split the procurement to conduct bidding without a required English-language version for larger procurement offers, which made it impossible for Tida to take part.

According to Zadvornnyy, Prozorro acted in line with European Union regulations, which asks buyers to list their requests in English if they exceed 133,000 euros.

“If you want to sell something in Poland, go learn Polish,” says Zadvornyy. However, he added that if the procurer divided his bid specifically to exclude foreign sellers, then that is against Ukrainian law.

Ekvator’s factory is owned by Serhiy Kantor, a regional lawmaker and businessman from Mykolaiv, a city of 500,000 people 500 kilometers south of Kyiv.

Ukrzaliznytsia’s Manufacturing Support Center responded to the Kyiv Post by saying their workday ended at 3:45 p.m. and asked the reporter to call again Monday.



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