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June 1, 2016

Volume 17 Issue 52

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Court Cuts Off Ukrainian Railway’s Lube Supply

Ukraine’s state railway monopoly Ukrzaliznytsia’s lubricant supply was disrupted after a court rejected the railway’s lube supply agreement last week.

Kiev’s business court decided in favor of Miroil, one of the lube supply tender bidders that objected to Ukrzaliznytsia’s decision to grant its supply agreement to another bidder, Trade Commodity. The disputed agreement was signed on May 11. The business court didn’t respond to Lube Report’s requests for comment by deadline.

Photo: Ukrzaliznytsia

Ukraine state railway Ukrzaliznytsia's lubricant supply will remain disrupted for an indefinite amount of time following a recent business court decision.

“The Ukrainian railways consume around 28 tons of lubricants daily and we have in stock enough lubes just for one week,” the railway monopoly said in its May 25 news release. “At this moment, Trade Commodity is our sole lube supplier because in three previous bids, the winners were two other companies that were disputed by Ukraine’s antimonopoly committee due to another Miroil claim.”

Meanwhile, the state railway lube supply will be disrupted for an indefinite time, Ukrzaliznytsia said. “It could be a blow to the country’s rail transportation and efforts toward reconstruction of the destroyed railway routes in Southeast Ukraine. It could also threaten the transportation of army forces and machinery, and result in inability to execute the deals signed with the defense ministry.”

Ukraine’s Donbas region has been the scene of fierce fighting between the regular Ukrainian army forces and pro-Russian militants after Russia annexed Crimea in March 2014.

Ukrzaliznytsia plans to file a counterclaim to Kiev's business appeals court.