Mykolaiv region overpaid half a million for pipes because of the war in the Middle East

The global conflicts suddenly hit the "pocket" of Mykolaiv region: even a simple purchase of pipes resulted in additional costs for the community. Due to logistical failures and a spike in oil prices, the local company was forced to sign a more expensive contract, losing the chance to save more than half a million hryvnias.

This was reported by Nashi Hroshi.

The aggravation of the situation in the Middle East has even affected local procurement in Ukraine. On April 8, the Vodoprovodni Networks utility company of the Novobuzka City Council (Mykolaiv region) signed an agreement with Polymer Group Terpolimergaz LLC for the supply of polyethylene pipes worth UAH 14.65 million following a tender.

Despite the fact that the winner did not offer the lowest price, two companies with cheaper offers - Instalplast LLC (UAH 14.08 million) and Gamaplast Ukraine LLC (UAH 14.42 million) - refused to sign the contract. They cited geopolitical instability in the Middle East, attacks on ships and the disruption of supply chains as the reason, which led to a sharp rise in the price of raw materials.

Polyethylene pipes are made from petroleum products, so the rise in global oil prices directly affected their cost. According to market participants, after the US and Israeli strikes in late February, oil prices rose by about 50%, which led to higher prices for fuel and other derivatives.

As a result, the purchase of pipes was made at a higher price than it could have been - the difference between the cheapest offer and the contract is more than half a million hryvnias.

According to the contract, the prices for pipes are:

• UAH 295 per meter for PE-100 SDR 26 160×6.2;
• UAH 455 per meter for PE-100 SDR 26 200×7.7;
• UAH 1,806 per meter for PE-100 SDR 26 400×15.3.

Six companies took part in the bidding, and the winning bid was 30% lower than the expected cost. The utility company is headed by Vadym Vysotskyi, and the founder of the winning company is Volodymyr Petruska from Lviv.

Also in April, a contract to renovate boiler rooms at a lyceum in Voznesensk was awarded to an entrepreneur who was previously linked to alleged overpricing in public procurement. Despite this background, he was the only bidder and was awarded a new contract for budget funds without competition.

Анна Бальчінос