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National Audit Office: No shortcomings in EVR Cargo freight car transaction

EVR Cargo freight train.
EVR Cargo freight train. Source: (Wikimedia Commons)

Estonia's National Audit Office has found no shortcomings in the Russian freight car transaction of the state-owned rail cargo operator EVR Cargo AS.

"Having familiarized itself with the materials presented by EVR Cargo AS, heard the explanations of persons involved and based on the circumstance that realizing the business plan is only at an early stage, based on current information, the National Audit Office does not see the need to carry out additional audit procedures," Auditor General Alar Karis said in a letter in response to an inquiry from MPs Eerik-Niiles Kross (Reform) and Kristen Michal (Reform).

The two MPs had turned to the National Audit Office in September to ascertain the legal and effective use of EVR Cargo AS funds.

According to the MPs, what needed to be checked over were the approval of the transaction by the company's supervisory board and the responsible minister, the process of acquiring the freight cars, and the cost.

"A number of suspicions arose due to the fact that the state-owned EVR Cargo, without competition and the decision of the supervisory board or general meeting, but with the silent consent of both, has bought 500 freight cars from Russia at a higher price than was offered by five companies in a competition," the MPs said in their inquiry.

According to the National Audit Office, the company's supervisory board approved the business plan with decisions on April 17 and May 11, and granted the management board the power to invest €35 million. The Minister of Economic Affairs and Infrastructure on April 26 adopted the decision of an extraordinary general meeting and gave consent for entering into a contract.

The auditor general also said that when acquiring the railway cars, EVR Cargo compared the offers received and took into account the needs of the business plan agreed on by the supervisory board, including information regarding the freight car models, prices and supply times.

EVR Cargo in June entered into a €17.8 million contract to purchase 300 container platforms and 200 open wagons.

EVR Cargo's initial plan was to buy railway cars for up to €35 million, which they would then rent out on the Russian market.

The company's new supervisory board in July temporarily and partly halted the implementation of the purchase and rental plan, but later decided to go forward with it.

Editor: Aili Vahtla

Source: BNS

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