Archive for July 2nd, 2017


Tender talk – Odessa

July 2, 2017

After several attempts at a tender to repair/rebuild Pier 7 at Odessa Seaport the Ministry of  Infrastructure has eventually announced a tender winner.  GT Project Ukraine Ltd was successful with a bid of UAH 787,557,000 – a project that will be overseen by the Ukrainian Seaports Authority (an issue to which this entry will return.)

GT Project Ukraine Ltd is an Odessa company fully owned by Sasha Zinoviev.  A bonus for the local economy that a local firm won a contract for (almost) UAH 788 million, and no doubt the ever-interesting and/or “creative” Vadim Morohovsky will be pleased as his bank (Vostok) now runs the GT Project Ukraine Ltd account.

At least that is what a reader is meant to believe when it comes to corporate ownership and local economy benefits.

Alexander Zinoviev was a minority shareholder until last year when the tenders were announced.  Prior to that the majority share was owned by the Estonian registered GT Corporation SE, behind which sits Russian businessman Igor Alekseev, President of GT Group.

Ergo a cynical reader will no doubt consider the full recent ownership of GT Project Ukraine Ltd by Alexander Zinoviev to be something of a ruse.

Indeed a painfully thin facade.

No doubt it remains, somewhere and somehow, part of the GT Group and the “ownership change” was purely to facilitate a politically expedient/appeasing lack of Russian ownership when handing over approximately UAH 800 million of taxpayers money.

Nevertheless GT Group does have a reputation and history for dealing with such work going back many years and in many seaports in the region – from the Balts, to the Med, in the Black Sea, to the Caspian.  There is much more to a tender than providing the lowest price after all.  The ability to actually do the work and have a history of doing such work well is also a very real consideration when awarding tenders – which is why the lowest price often does not win.

However it is not these corporate ownership games alone that catch the eye.

In January 2017, Ukraine appointed Latvian citizen Raivis Vetskagans as Head of the Ukrainian Seaports – a position long associated with significant levels of corruption.  Thus the appointment of a foreigner was naturally framed as “breaking the cycle”.

Perceptions count.

Unfortunately, prior to this Ukrainian appointment, Mr Vetskagans was for many years the CFO of GT Group’s Latvian subsidiary.

Thus the GT Group thread runs, prima facie unseen through this tender from beginning to end – and ultimately to its oversight too.  Perceptions count – as indicated throughout this particular tender process and the mirrors and smoke employed.

A cynical reader will thus perhaps doubt that this tender will be executed with total propriety.

%d bloggers like this: