Efforts to combat corruption in Ukraine’s public procurement have started to bear fruit as the new electronic online system “ProZorro” has become increasingly effective and competent, writes James Wilson.
According to Ukrainian law all public procurement tenders must be offered on “ProZorro” which guarantees transparency and the openness of competitive bids in the procurement of products and services.
The Ukrainian nuclear energy sector is no exception in using the nation-wide electronic anti-corruption system. This is important taking into account the sector’s share in the energy mix (about 60%), its significant financial turnover, and the potential negative impact on the economy if public procurement is mishandled.
ProZorro ensures that all the purchases made by Energoatom, Ukraine’s main nuclear operator and a public company, are transparent. The EU-Ukraine Association Agreement has played a significant part in streamlining procurement procedures specifically for the nuclear power sector.
Increased transparency and efficient purchase procedures signal new opportunities for European companies wishing to contract with Energoatom and tap into a wide range of nuclear-related projects.
Reining in corruption is not the only factor in the growth of project and procurement opportunities for European companies in Ukraine’s nuclear sector. The adverse political situation aggravated by hostilities with Ukraine’s closest neighbour – Russia – has forced Energoatom to diversify its supply base and look for new suppliers outside Russia. The EU is a primary beneficiary of this strategy, thanks to the Association Agreement.
Recent examples include the contract to supply spare parts to diesel generators for the South-Ukrainian Nuclear Power Plant (NPP) awarded by Energoatom to the Finnish company Wärtsilä via its subsidiary Wärtsilä France in February of this year. The contract was awarded on the basis of an open tender procedure using the ProZorro platform. Energoatom has procured the spare parts under the 2019 major repair program for the reserve diesel power plant of the second safety system of the NPP’s Unit 3.
Commenting on the signing of the contract, President of Energoatom Yuri Nedashkovsky praised Wärtsilä France on winning an open and transparent tender. “Thank you for believing in the sincerity of our desire to work directly with the leading world manufacturers of equipment for nuclear power plants. We signed the Memorandum of Understanding outlining a wide range of the ways of our cooperation. Today, we are making the first practical step towards the implementation of the Memorandum. I am convinced that a great way to expand our cooperation lies ahead of us”. Director of VP Services of Wärtsilä France Michel Kubbinga thanked Energoatom for the opportunity, the openness of the procedure and emphasised that the tender won by Wärtsilä was indeed transparent.
The European nuclear power sector is presently undergoing a painful process of reform compounded by political strategy, consumer fears, and the different actions of the competing power sectors. The final outcome of the process is still unclear but one thing for certain is that it remains essential to develop the sector making it increasingly cleaner and safer.
In that respect European companies are interested in cooperating with Energoatom as providers of specific services adding efficiency, sustainability and cleanness to the key nuclear production processes. The French company Orano SA has agreed to prepare a feasibility study for Energoatom of the reprocessing of spent fuel assemblies from Ukrainian VVER-1000 nuclear reactors at Orano’s La Hague site. Orano’s technology will recycle used fuel which contains as much as 96% of recyclable materials and 4% of final waste.
Energoatom is constantly working to ensure that the products and services it procures are as cost-efficient as possible, and this policy is assisted by the “ProZorro” system as the platform for open tenders. To this end working directly with manufacturers is vital. One example of eliminating intermediaries is a recent direct contract between Energoatom and the French company Weir Sebim using tenders promoted on the “ProZorro” system. Every year Energoatom is buts spare parts from Weir Sebim for a steam generator for the power units of Ukrainian NPPs. For about 10 years Sebim has been a supplier for Energoatom only through intermediaries.
Thanks to the Association Agreement between the EU and Ukraine, as the trade dynamics show, more and more European companies are becoming suppliers for the Ukrainian market discovering its big and diverse potential. Establishing “ProZorro”, which is growing to be very similar to the EU’s Ted, is proving to be highly conducive to business opportunities for European companies in Ukraine.
James Wilson is the Editor of EU Political Report.
