17.09.2024 Business of Occupiers

Are the Cabinet of Ministers and Shmyhal in collusion with Ukrzaliznytsia financing Russia and Gazprom?

Not long ago, it became known that Ukrzaliznytsia signed a contract for the purchase of 10,000 tons of diesel fuel (worth UAH 540 million) with the Ukrainian division of the Azerbaijani state-owned company Socar. This agreement was concluded against the backdrop of news that Socar and Russia’s Gazprom had reached an agreement to expand their strategic partnership.

The media in Erefia actively covered the details of the deal, writing: “The mutually beneficial, partnership interaction between Gazprom and SOCAR is developing dynamically. In particular, we are talking about the North-South project and the signing of a program of comprehensive scientific and technical cooperation in September this year. An agreement was reached to expand the diverse strategic partnership.”

Obviously, from this cooperation, the Russian company Gazprom will receive significant funds, which will later be used by the Russian leadership to wage an aggressive war against Ukraine.

However, this did not affect the decision of the management of Ukrzaliznytsia. And although at first telegram channels and media categorically wrote about the announcement of a boycott of SOCAR and set out the requirements for the termination of the contract, the situation remained unchanged. Surprisingly, in a few days the resonance subsided, and the same telegram channels of millionaires stopped speaking out about the ignoring of their requests and requests to the JSC and the authorities.

As a reminder, JSC “Ukrzaliznytsia” is subordinated to and managed by the Cabinet of Ministers of Ukraine through the Ministry of Community and Territorial Development of Ukraine. This means that the decision to sign an agreement with SOCAR was known not only at the company level. So can this sudden silence of the media and the end of the media attack and boycotts be linked to internal approvals and agreements of the Cabinet of Ministers and Prime Minister Shmyhal personally?

Returning to the management, the director of Ukrzaliznytsia is Yevhen Lyashchenko.

As for SOCAR, it is represented in Ukraine by SOCAR ENERGY UKRAINE LLC, registered at 52a Khmelnytskoho Bohdana Street, Kyiv. The director of the company is Mammadov Elchin Aydin Ogly. And the owner is the state oil company of the Republic of Azerbaijan SOCAR. In addition, the above-mentioned company is the founder of another one – Trading House SOCAR Ukraine LLC.

For reference, Sokar Ukraine Trading House is one of the major suppliers of diesel from Hungary via pipeline (the other major supplier is Alliance Energy Trade, a contractor of Ukrgasvydobuvannya). Pipeline deliveries are much cheaper than railroad and even more so than road transportation. In Hungary, diesel is produced at a plant of the local MOL Corporation. Hungary receives oil for diesel production from Russia via an oil pipeline that runs through Ukraine.

On July 17, 2024, it became known that Ukraine’s sanctions blocked the transit of Lukoil’s Russian oil to Hungary and Slovakia. At the same time, oil supplies from Russia were not affected, as oil from other Russian suppliers replaced Lukoil’s.

And despite the second circumstance, which testifies to SOCAR’s cooperation with Russia, Ukrzaliznytsia and the Branch “Production Support Center” of JSC “Ukrainian Railways” continue to deliberately create conditions for public procurement so that the winners are SOCAR ENERGY Ukraine LLC and SOCAR UKRAINE TRADING HOUSE LLC.

It is worth noting that earlier the Cabinet of Ministers decided to prohibit JSC “Ukrzaliznytsia” from entering into direct agreements with foreign fuel producers in order to avoid non-transparent financial schemes and prevent economic risks. This ban was introduced to reduce dependence on external suppliers and prevent the risks of cooperation with companies that may have ties to aggressor countries. This decision was a strategic step to ensure transparency of public procurement and minimize financial losses for the country during the war.

Despite this, the Prime Minister of Ukraine Shmyhal, abusing his official position, unofficially authorized the management of JSC Ukrzaliznytsia to enter into agreements with LLC SOKAR ENERGY UKRAINE and LLC TRADING HOUSE SOKAR UKRAINE.

What could have been the reason for this – whether it was a promised reward or conscious cooperation – is up to you to think about. However, by doing so, Ukrzaliznytsia not only ignored the ban, but also canceled the transparency of tenders and put the country’s national security at risk.

So, strategically important infrastructure, including the railroad, has actually ended up in the hands of companies with ties to Russia?

We still have many questions to ask the monopolist in the Ukrainian rail transportation market and one of the largest state-owned enterprises, which has recently begun to spend budget funds too actively. First, it was the purchase of curtains for railcars at UAH 7,000 per piece, and then a legal advisor for UAH 2 million. This is despite the fact that Ukrzaliznytsia has an entire department of lawyers.

And, of course, there are questions to the highest controller, the Cabinet of Ministers and Prime Minister Shmyhal, who are obviously interested in this distribution of cases.

The legal department of the NGO “Non-Stop” sent materials to law enforcement agencies, as well as a number of regulatory authorities, including the Antimonopoly Committee, which was supposed to monitor the competitiveness of the procedure and the transparency of the bidding, but obviously did not do so because of its own financial interest. In addition, we are appealing to the U.S. Department of Justice and other agencies to impose personal sanctions on the list of related entities and individuals.

We will also initiate the annulment of the agreement with Socar, including by appealing to judges.

We urge you to report any facts of abuse, corruption collusion and extortion by state-owned and municipal enterprises, including Ukrzaliznytsia. Write to our chatbot or email info.nonstopukraine@gmail.com.

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Let us know about it. We will help protect the violated rights!

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