Legislation, Lithuania, Railways

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Skinest's appeal against Lithuanian Railways' sleeper contract with Swetrak rejected

BC, Vilnius, 28.12.2018.Print version
A Lithuanian court has ruled that a railway sleeper supply contract signed between Lietuvos Gelezinkeliai (Lithuanian Railways) and Estonian-Lithuanian joint venture Swetrak through a negotiated procedure is lawful and that Estonian-owned Skinest Baltija's offer did not meet the technical requirements, informed LETA/BNS.

The Lithuanian Court of Appeals on December 20 upheld the Vilnius Regional Court's ruling of August 2018 to dismiss Skinest Baltija's lawsuit and grant that filed by Swetrak

Swetrak appealed Lietuvos Gelezinkeliai's decision to name Skinest Baltija as the winning bidder, claiming that the technical parameters of reinforced concrete sleepers made by Belarus' Dorstroymontazhtrest, which Skinest Baltija offered to supply, did not meet the requirements. 

Skinest Baltija and the state railway company disagreed with the assessment, but their arguments failed to convince the court. 

"The written evidence provided does not substantiate claims that the products offered by Skinest Baltija comply with the technical qualification requirement for the proposed sleepers to have been used for at least the past three years on railway trunk lines with a gross train load of at least 30 million tons per year," the Court of Appeals ruled.  


Skinest Baltija, in turn, challenged the sleeper supply contract that Lietuvos Gelezinkeliai signed with Swetrak on May 24, 2018 after the Commission for Coordination of Protection of Objects of Importance to Ensuring National Security stated that a contract with Skinest Baltija, which had been named the winning bidder in the tender procedure, would not be in line with national security interests. 

"In circumstances where the contract with the winner (Skinest Baltija) could not be concluded, a minimum amount of reinforced concrete sleepers that was necessary to fulfill the terms and conditions of a signed contract and to carry out repairs was purchased," the Court of Appeals said. 

"It follows that the procurement is compatible with the principles and objectives set out in the Law on Public Procurement," it added. 

The Lithuanian government confirmed in June that the planned deal with Skinest Baltija, worth over 3 million euros, would run counter to national security interests. 

It said in a resolution that Oleg Ossinovski, the owner of Estonia's Skinest Rail, which is Skinest Baltija's shareholder, "maintains relations with institutions of foreign states or natural or legal persons from those states which increase the risk or pose a threat to national security". Also, Ossinovski is a suspect in a corruption case in Latvia.

Skinest Baltija, Skinest Rail, Skinest Grupp and Ossinovski have challenged the government's decisions in courts. 

Skinest Rail said last August it would turn to the Washington-based International Centre for Settlement of Investment Disputes (ICSID) over a violation of the Lithuania-Estonia bilateral investment promotion agreement if no amicable agreement was reached within six months. 

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