Ukrzaliznytsia sends documents of internal investigation into purchase of Hyundai trains to Interior Ministry

The control and internal audit department of Ukrzaliznytsia in the second quarter of 2014 conducted three checks of publications and addresses containing information on the possible infringements in the financial and economic operation of enterprises managed by Ukrzaliznytsia.

First Deputy Ukrzaliznytsia Director General Maksym Blank wrote on his Facebook page that the internal investigation was conducted into the purchase and exploitation of interregional high-speed electric trains Hyundai by Pivdenna railways and Ukrainian Railway High-Speed Company. The materials have been sent to the chief investigation department of the Interior Ministry of Ukraine.

The internal investigation into signing of agreements on equipping and washing of wagons by Pivdenno-Zakhidna railways and Iron Fist LLC, Master Clean LLC and Development XXI Century LLC. The materials have been sent to the Prosecutor General's Office.

Blank said that an investigation into abuse of office by the head of the Kyiv-Pasazhyrsky station when he paid bonuses to employees and payments by ticket clerks to passengers when they sold tickets.

"In addition, only in the period from June 1, 2014 at least two tenders were canceled; spare parts to diesel locomotives 2TE116, 2M62, 2TE10 worth UAH 14.205 million; parts of railway locomotives, tram wagons and rolling stock; fasteners and fittings, mechanical equipment worth UAH 34.198 million," Blank said.

He wrote that certain firm Ukrbusinessconsulting LLC (Poltava) sent a claim regarding a tender on the purchase of services on the appraisal of property and ownership rights to form the charter capital of public joint-stock company Ukrainska Zaliznytsia to the Antimonopoly Committee of Ukraine.

"Ukrzaliznytsia has announced a tender to appraise the assets with the purpose of going public. The requirements to the appraiser are tough, but the tender is open, transparent and all entities that wanted to participate were invited. The bids were opened. It's obvious that one of the largest international audit companies will be selected, but we learn that a company from Poltava, Ukrbusinessconsulting, managed to file a claim to the Antimonopoly Committee of Ukraine and the committee decided to consider the claim in a month," he said.

He added that this could slow the reformation of the railway sector.

As reported, large international consulting companies Deloitte & Touche, Ernst & Young and Baker Tilly Ukraine are participating in a tender on assessment of property and ownership rights for the formation of the charter capital of public joint-stock company Ukrainska Zaliznytsia.

The lowest price was given by Baker Tilly Ukraine: UAH 3.167 million (value added tax not included) and UAH 3.8 million (value added tax included).

Deloitte & Touche's price was UAH 12.5 million (value added tax not included) and UAH 15 million (value added tax included), while Ernst & Young's price was UAH 14.167 million (value added tax not included) and UAH 17 million (value added tax included).