State-owned Kharkivoblenergo ordered cables at one-third higher prices than other tenders and the market

State-owned Kharkivoblenergo ordered cables at one-third higher prices than other tenders and the market

JSC Kharkivoblenergo 23 October, following the results of a tender, ordered cables and wires from PJSC Zavod Pivdenkabel for 88 million UAH.

This is reported in the Prozorro system.

By the end of 2024 year the manufacturer will deliver 20 types of cables and wires, the list of which with prices is shown in the table below. The goods will be paid for up to six months after delivery.

Cables account for 75 million UAH, or 86% of the procurement volume. Their prices turned out to be one third higher than the price list of a major supplier, Ukrprovid.

At the same time, cables can be found cheaper than Ukrprovid in other customers’ tenders.

For example, cable ASBl 3x120-10 was ordered at 2 228 UAH/m, while Ukrprovid offers it one third cheaper – at 1 638 UAH/m. Recently JSC Mykolaivoblenergo ordered it at 1 170 UAH/m excluding VAT, so with tax the price would be 1 404 UAH/m, which is one and a half times cheaper. In addition, the municipal enterprise Odesmiskelektrotrans ordered such a cable at 1 229 UAH/m, which is almost twice as cheap. In both cases the goods are to be delivered by the end of 2023 year with post-payment within six months.

Meanwhile, wires in this Kharkivoblenergo tender turned out to be 17% cheaper than Ukrprovid’s price list. But they account for only 12 million UAH, or 14% of the total procurement amount.

If all the goods in this tender were ordered at market prices, they could have spent 13 million UAH, or 15% less than the price of the contract with the winner.

Pivdenkabel received the Kharkivoblenergo order without competition because no one else came to the auction. To participate, bidders had to submit three fully executed similar contracts and have annual revenue (turnover) for the previous reporting period of at least 30% of the expected value.

Kharkiv’s Pivdenkabel has received contracts worth 1,12 billion UAH since 2017. The main shareholders of the plant are local firms Pivdenkabelinvest-Plus, Pivdenkabelinvest and Pivdenkabelprokat and the Cyprus company C.I.H.-Cable Industrial Holding Limited.

The owners of most of the share capital of Pivdenkabelinvest-Plus are the plant director and a Kharkiv city council deputy (formerly of the Party of Regions, then Revival, and now the Kernes Bloc – Successful Kharkiv!) Volodymyr Mykhailovych Zolotarov and his son Volodymyr Volodymyrovych Zolotarov. The latter was a deputy of the Kharkiv regional council from the Revival party, whose top-listed candidate was former Kharkiv mayor Hennadiy Kernes.

Also among the founders are Oleksiy Shevtsov, Volodymyr Chaika, Yuriy Antonets, Hryhoriy Solyar, Nina Puhachova, Olena Kryvenko and the aforementioned Cyprus company C.I.H.-Cable Industrial Holding Limited, whose ultimate beneficiary is listed as Zolotarov Jr.

The state, through the State Property Fund, owns 65% of Kharkivoblenergo’s shares. The company is managed by Kostyantyn Lohvynenko, appointed on submissions from the SPF of Ukraine.

Another 30% was in February 2021 purchased by the Cyprus company Smart Holding (Cyprus) Ltd of former MP from Opposition Bloc Vadym Novynskyi. In September 2022 the Supreme Court declared that purchase invalid. Since December 2022 Novynskyi has been subject to sanctions by the National Security and Defense Council of Ukraine.

Kostyantyn Lohvynenko is acting as CEO of Kharkivoblenergo.

Name of product

Unit

Price, UAH/unit with VAT

Ukrprovid, UAH/unit with VAT

Difference, %

Other tenders, UAH/unit with VAT

Cable AABl 3x95-10

m

1 581

1 173

+35

957–977

Cable AABl 3x120-10

m

1 828

1 360

+34

–

Cable AABl 3x185-10

m

2 536

1 852

+37

–

Cable AABl 3x240-10

m

3 042

2 253

+35

–

Cable AABl 4x120-1

m

1 670

–

–

–

Cable ACBl 3x70-10

m

1 694

1 283

+32

890

Cable ACBl 3x120-10

m

2 228

1 638

+36

1 170–1 229

Wire SIP-5ng 2x16

m

29

33

–12

–

Wire SIP-5ng 2x25

m

41

49

–14

–

Wire SIP-5ng 4x16

m

58

66

–12

–

Wire SIP-5ng 4x25

m

83

97

–14

–

Wire SIP-5ng 4x35

m

107

131

–18

–

Wire SIP-5ng 4x50

m

141

191

–26

–

Wire SIP-5ng 4x70

m

192

244

–21

–

Wire SIP-5ng 4x95

m

262

323

–19

–

Wire SIP-5ng 4x120

m

336

386

–13

–

Wire A-35

kg

202

242

–17

–

Wire A-50

kg

202

242

–17

–

Wire A-70

kg

199

242

–18

–

Wire A-95

kg

197

242

–18

–

Anna Soroka, Nashi Hroshi