Business news from Ukraine

STATE-RUN UKRENERGO SIGNS EUR 19.4 MLN CONTRACT WITH CHINESE COMPANY TO RECONSTRUCT SUBSTATION

National Energy Company Ukrenergo has signed a contract with Xian Electric Engineering Co. Ltd. (China) to reconstruct the 330 kV Brovarska substation with the installation of an autotransformer, the press service of the company has reported. The press service said that 11 companies from eight countries took part in a tender under the rules of the European Investment Bank (EIB), which finances the project. The cost of the project fell by 25%, to EUR 19.4 million.
Reconstruction of the Brovarska substation envisages the installation of modern complete switchgears with SF insulation and the modernization of relay protection and emergency control systems.
In addition, an additional 330/110/35 kV autotransformer with a capacity of 200 MVA will be installed at the substation. This will ensure the reliability and security of energy supply to consumers of the Kyiv energy hub – Brovary, Boryspil and Baryshivka districts of Kyiv region, including the Boryspil airport, as well as expand opportunities for their further economic development.
“Modernization of the Brovarska substation is one of the strategic projects of Ukrenergo. In two and a half years, this substation will be fully automated in accordance with international requirements for reliability and safety,” Deputy Director for Investment Volodymyr Kudritsky said.
Ukrenergo operates trunk and interstate transmission lines, as well as centralized dispatching of the country’s integrated power grids. It is a state-owned enterprise managed by Ukraine’s Finance Ministry. The company will be soon reorganized into a private joint-stock company.

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PRINCIPAL OF KRAMATORSK-BASED DONETSK NATIONAL MEDICAL UNIVERSITY WANTS TO SCRAP CONTRACT WITH INTERMEDIARY OVER SCAMS WITH FOREIGN STUDENTS

Principal of Kramatorsk-based Donetsk National Medical University (Ukraine) Petro Kondratenko has said he plans to scrap his university’s contract with an intermediary company called Ukrainian Education Services (Ukrayinski Osvytni Posluhy). “The company’s debt to the university amounts to UAH 37 million. These are debts starting from 2016, when the international medical university began to function. We appealed to an economic court to terminate the relationship with that firm, terminate the contract and recover the funds that the firm owes,” Kondratenko at a press conference at the Kyiv-based Interfax-Ukraine news agency on Tuesday.
He said that in the summer of 2018 he discovered an “organized group” at the university that included an intermediary firm and university staff. He said the group “was patronized by employees of Ukraine’s SBU State Security Service.”
Kondratenko said, “This group earned money for illegal migration.”
“In 10 months, we issued 1,563 invitations for foreign citizens to come to study, but 243 people came. We could not but be interested in what happened to the rest of the invitations,” he said, adding that 95 invitees “were allegedly credited to our university by fake order, and money was taken from them as the fee for education. They were not our students, but Ukraine’s State Migration Service issued certificates of temporary residence in Ukraine for a period of five to six years.”
Kondratenko said the difference between the tuition fees that the intermediary firm takes and the cost established by the university is $5,000 per year.
“Plus $500 in insurance, $500 for a medical certificate, $500 for food, $500 for registration, $1,000 for accommodation in a hostel. In total, it turns out $8,500 per person. Multiply it all by 1,100 [the number of foreign students] and it works out to around $9.5 million. Plus the discount that the company received, depending on the number of students sent to study… The total amount is almost or more than $10 million, which went into the pockets of certain individuals,” the principal said.
He said that since September last year he had notified various officials, including the SBU’s main directorate in Donetsk and Luhansk regions, the police and the prosecutor’s office of Kramatorsk, and the Kropyvnytsky police. “Almost 20 criminal cases are opened for this company by a court decision, including, under Article 129 of Ukraine’s Criminal Code (threat of murder),” he said.
Kondratenko said he had received threats of physical violence and SMS messages, which said if he did not leave his job, he or someone from his family would be killed. The court granted him state protection. He said the medical university extended the deadline from January 8 to February 7 for foreign students who arrived by invitation to study and who did not pay tuition to pay it, offering them to sign a contract directly with the university. “Virtually no one has signed.… Out of 1,100 students, 850 did not sign the contract,” he said.
The reason for the refusal to sign contracts directly with the university, according to the principal, were threats to students from the dismissed teachers and other persons, who said Kondratenko would soon leave his post. “It is surprising to me that a Member of Parliament of Ukraine is also involved in this,” he said.
Kondratenko said students who had not signed contracts would be expelled from the university, and, according to Ukrainian legislation, would be forced to leave Ukraine. “We want the university to operate legally and don’t want anyone to interfere in personnel policy,” the university’s head said.
Donetsk National Medical University (dnmu.edu.ua) is based in the Ukrainian-controlled town of Kramatorsk and the Ukrainian-controlled city of Mariupol in Donetsk region, as well as in the city of Kropyvnytsky in Kirovohrad region.

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UKRENERGO SIGNS CONTRACT WITH SWISS LAW LALIVE TO PRESENT COMPANY’S INTEREST IN COURT IN CRIMEAN ASSETS CASE AGAINST RUSSIA

National Energy Company Ukrenergo has signed a contract with Lalive S.A. (Switzerland) to present the interests of the company in a case on compensation of losses due to annexation of Crimea by Russia. According to a company report in the ProZorro e-procurement system, the contract on the provision of legal services worth EUR 1.537 million (or UAH 49.9 million without VAT) was signed on February 6, 2019.
Covington & Burling, Hughes Hubbard & Reed, and Quinn Emanuel Urquhart & Sullivan UK also took part in the tender.
Lalive will provide Ukrenergo with the services of preparing and sending a notice of arbitration to the dispute, determining the nomination of arbitrators and shaping the composition of international arbitration, drafting a claim and applying to arbitration, representing the interests of the company in arbitration tribunal and obtaining the award.
As reported, Lalive represented the interests of the following companies in disputes against the Russian Federation regarding lost investments: Ukrnafta, Stabil, and Yukos Capital.
In April 2018 Ukrenergo officially notified the Russian Federation about the start of an investment dispute over the company’s assets seized in Crimea. According to estimates by Ukrenergo, only the cost of the company’s power grids in the peninsula is about $1 billion.
Ukrenergo operates trunk and interstate transmission lines, as well as centralized dispatching of the country’s integrated power grids. It is a state-owned enterprise, which was managed by Ukraine’s Energy and Coal Industry Ministry.

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UKRZALIZNYTSIA RECEIVES 30 LOCOMOTIVES FROM GENERAL ELECTRIC UNDER CONTRACT

JSC Ukrzaliznytsia has received the last five locomotive made by General Electric Transportation (the United States), Ukrzaliznytsia Board Chairman Yevhen Kravtsov has said on its Facebook page.
Ukrzaliznytsia received all 30 contracted locomotives GE. The last five met in Chornomorsk on Friday [February 1],” he said.
The received locomotives will be sent to Kriukov Car Building Works (KCBW, Poltava region) for retrofitting, where 10 more U.S. locomotives are already in work.
According to Kravtsov, GE locomotives show themselves to be extremely effective.
“As an example, we save fuel by 30% in the Zaporizhia-Kamysh-Zoria-Volnovakha section. In addition, the locomotives of the old fleet run an average of 360 km per day, and GE diesel locomotives – 540 km,” he said.
According to the head of Ukrzaliznytsia, 15 new locomotives now ensure a quarter of diesel locomotive traction in the three regional branches where they operate: Prydniprovska, Donetsk and Odesa.

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NOVA POSHTA GROUP SIGNS FIVE-YEAR CONTRACT WITH IKEA

NP Logistic, part of the Nova Poshta Group, has signed a contract on the provision of logistic services to the Swedish furniture and home accessories retailer IKEA, planning to open its first store in Ukraine in 2019.
The press service of Nova Poshta reported on Wednesday that the company will provide storage and order completion services for the first IKEA city store in Kyiv.
“We are glad that IKEA selected us. This would allow uniting prime standards of fulfillment and delivery with the furniture retail,” the co-owner of Nova Poshta, Viacheslav Klymov, said.
NP Logistic’s core business is fulfillment: storage of goods at warehouses, online order completion and delivering them to customers.
As reported, in September 2018, IKEA officially announced that the group plans to open a first city store in Ukraine in 2019 in the Ocean Mall in Kyiv.
The development of the network in Ukraine will be under the aegis of IKEA Southeast Europe, which is part of the IKEA Group (Ingka Holding B.V.). The company is engaged in retail business IKEA in Croatia, Serbia, Romania and Slovenia.
Swedish IKEA is the world’s largest retail chains for furniture and household goods with 367 stores on 30 markets.
Nova Poshta was founded in 2001. Its network has more than 2,350 depots and a fleet of more than 3,600 trucks. In 2017, more than 145 million items were delivered.

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DONBASENERGO SIGNS CONTRACT WITH CHINA DONGFANG ELECTRIC TO RECONSTRUCT ONE UNIT

PJSC Donbasenergo has signed a contract with Dongfang Electric International Corporation (China) for reconstruction of unit No. 6 of the Sloviansk thermal power plant (TPP) with its division into units 6A and 6B of 330 MW each.
According to the company’s press release, the cost of the contract for the reconstruction using CFB technology (the technology of coal combustion in a circulating fluidized bed) is $684.296 million.
According to the plan, unit No. 6A will be put into operation in July 2022, unit No. 6B in July 2023. The units will burn steam coal.
The project implementation will extend the life of thermal power plants by 40 years, increase their operation efficiency, reduce specific fuel consumption and maintenance costs. The new units will comply with all ENTSO-E technical requirements and the European environmental directives.
Reconstruction of unit No. 6 of the Sloviansk TPP will significantly reduce the cost of electricity produced, burn low grade coal without using natural gas in the load range of 40-100%.
Donbasenergo Director General Eduard Bondarenko said that efficiency of the units will be at least 42%. The company seeks to receive the funds for investment in the tariff for electricity transmission in the amount of 30%. The reconstruction will be financed using the loan from a Chinese bank by 70%.
Donbasenergo operates Starobesheve (located in the occupied territory) and Sloviansk thermal power plants.

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