Kryukivka Wagon Threatened With Bid Order Cancellation.

The Donetsk Railway, part of Ukrzaliznytsya, is reviewing the technical characteristics of gondola carriages ordered from Kryukivka Wagon (KVBZ) in August. KVBZ management reacted by saying its victory earlier this month in a tender to deliver 800 wagons had been cancelled, while Donetsk Railway said no final decision had been made. Kryukivka Wagon said it had already produced 200 carriages to fill the order. Also, KVBZ said its September production plan was threatened by the conflict between difrerent shareholders at Kremenchug Steel Foundry, KVBZ’s main supplier of castings. The TAS business group owns a large stake in Kryukivka Wagon and is also involved in the fight for control of Kremenchug Steel Foundry. Olha Pankiv: The contract if lost would cost KVBZ ~$30m in revenues in 2006. The change in the mood at Ukrzaliznytsya, which had been favoring KVBZ, could be related to the appointment Volodymyr Kozak, a former manager at SCM, as Ukrzaliznytsya’s CEO. Further state railway orders could be directed to SCM-controlled Mariupol Heavy Machinery (MZVM: BUY) and Azovzahalmsh (AZGM: BUY). SCM also recently entered the battle for control of Kremenchug Steel Foundry, on the opposite side from TAS.