Member of the Ukrzaliznytsya Supervisory Board stopped company tenders for scrap metal sales.

According to them, the initiator of the suspension was a member of the Ukrzaliznytsya Supervisory Board Christian Kuhn, whose domain of competence includes the procurement and sale of property of the railway company. There are suggestions not to send the written-off railcars for scrap, but to repair them.

Earlier, Ukrzaliznytsya announced plans to ramp up the sales of scrap metal in 2020 to 276 thousand tons for the amount of UAH 1.1 billion. There was an intention to commit these resources to maintaining the financial stability of the company. Ukrzaliznytsya staff is now on a 4-day work schedule.

For a long time Ukrzaliznytsya could not agree upon with metallurgy enterprises – major scrap consumers – on the shipment conditions for its raw materials. Railroad operator’s employees insisted that buyers had to take out the scrap metal from the company's sites by themselves. At the same time, iron and steel industry actors called this approach risky and offered a traditional option – to buy raw materials already loaded into railcars.

And as soon as Ukrzaliznytsya took the position of key scrap metal consumers into consideration, in June 2020, out of 38 lots with a total volume of 79 thousand tons of scrap, 18 lots totaling 53 thousand tons were sold. The revenue of the company from these tenders amounted to UAH 215 million.

According to ProZorro.Sales, in the first half of 2020, Ukrzaliznytsya sold 105 thousand tons of scrap worth UAH 433 million.

In the spring, industry association Ukrmetallurgprom called on Ukrzaliznytsya to take steps to push up the sales of metal scrap. The problem of scrap collection has become relevant for metallurgists amid quarantine restrictions caused by the coronavirus pandemic. That is why the iron and steel industry enterprises asked the railway company to improve the efficiency of scrap metal sales and to intensify the decommissioning of railcars.

Ukrzaliznytsya has over 300 thousand tons of scrap at its disposal.

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