21.04.2025 Corruption Tenders

Kryukiv Carriage Works withdraws Ukrainian funds with Pertsovsky’s consent

In Ukraine, where the economy is suffering from war, inflation is rising, and international aid is disappearing into the dark corridors of corruption, schemes by Cabinet of Ministers officials under the cover of Prime Minister Shmyhal and Infrastructure Minister Kuleba continue to suck the state budget, including through the activities of Ukrzaliznytsia.

The shadow of Russian beneficiaries over the Kriukiv plant

PJSC Kryukiv Carriage Works is one of the key suppliers of passenger cars to Ukrzaliznytsia. At first glance, it seems to be a national giant that supports the economy. But behind the screen of patriotic slogans, it hides ties to Russia. Among the beneficiaries of the plant are Russian businessmen Vladimir Prikhodko, Natalia Prikhodko, and Sergey Gamzalov, who head the Metal Construction Plant in Russia.

According to YouControl, these individuals have a direct influence on the activities of KVSZ, and in 2022, the plant came under criminal investigation on suspicion of withdrawing UAH 192 million to the accounts of Russian companies through unprofitable contracts. According to the investigation, these funds were used to purchase components at inflated prices, although Ukrainian counterparts were much cheaper.

Interestingly, the 25% of KVSZ shares owned by Russian owners have been in limbo for three years. The ARMA cannot find the owner of the shares, which looks like an artificial delay in the process. Is this part of a conspiracy to keep the Russian beneficiaries in the shadows, allowing them to continue to profit from the Ukrainian budget?

Tender for 2 billion: how KVSZ “wins” contracts

On September 21, 2023, Ukrzaliznytsia announced a tender for the purchase of 44 passenger railcars for UAH 1.951 billion. The order included 12 sleeping cars, 20 compartment cars, 3 cars for people with disabilities, and 9 reserved seats. As expected, KVSZ became the winner. However, the tender requirements were written in such a way as to exclude other participants. In fact, KVSZ was the only bidder, which violates the antitrust laws of Ukraine.

Moreover, the certificates of conformity for the railcars were either outdated or missing altogether. For example, the certificate for cars for people with disabilities expired on August 19, 2024, and there were no certificates for reserved seats at all. Without additional tests and confirmation of safety standards, such cars cannot be used. However, Ukrzaliznytsia signed the contract without any changes, ignoring these violations. Doesn’t this indicate collusion between the management of UZ and KVSZ?

Overpricing and fake repairs

The Kryukiv plant not only supplies railcars at inflated prices, but also makes money on their repairs. According to the contracts, KVSZ was supposed to provide Ukrzaliznytsia with documentation for independent repairs of railcars, but this did not happen. Instead, all repairs are carried out at KVSZ, and their cost is artificially inflated. For example, the repair of electric and diesel trains, wheelsets and running gear costs tens of millions of hryvnias, but much of the work is done only on paper. Components purchased for repairs are often exported or sold through “necessary” stores.

Because of such schemes, each railcar costs 10-15 million hryvnias more than it should. For comparison: KVSZ with 4,500 employees produced only 32 passenger railcars in a year and a half. At the same time, Stadler in Kazakhstan plans to produce 100 cars a year with 400 employees. This difference in productivity and production costs is a clear indication of inefficiency and corruption at KVSZ.

Another example is the purchase of air conditioners for railcars. Their price was five times higher than the market price. This is just one of many schemes that allow budget funds to be diverted to the accounts of close associates.

The role of ARMA and state institutions

ARMA plays a questionable role in this story. As already mentioned, the 25% of KVSZ shares owned by Russian owners have not been confiscated or transferred to management. This looks like a deliberate delay, as ARMA has not been able to identify the owner of these shares in three years. At the same time, the seized assets of other sanctioned persons, such as subsoil companies, are promptly transferred to ARMA’s management, as was the case with the property of one of the liquidated banks in 2025.

This selectivity raises the question: Isn’t ARMA part of a corruption scheme that allows Russian beneficiaries to remain in the shadows? And why do state authorities, including the Office of the Prosecutor General, which provides procedural guidance in cases of sanctioned persons, not respond to obvious violations?

According to our materials, the Kyiv City Department of the BES has already initiated criminal proceedings under No. 72025102100000011, Part 5 of Article 191 of the Criminal Code of Ukraine, the Kyiv City Department of the State Bureau of Investigation – under No. 62025100110000004, Part 1 of Article 212 of the Criminal Code of Ukraine, and No. 62024100110000222 under Part 3 of Article 212 of the Criminal Code of Ukraine. However, as we can see, the situation with Ukrzaliznytsia’s procurement has not improved.

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