Company sponsored by enforcers monopolized fumigation business in Kherson region: grain traders

The Customs Service in Kherson region is obstructing fumigation access for market participants by providing a monopoly position for the company ESV Service («ЕСВ Сервис»), grain traders and fumigation specialists told Latifundist.com.

"Since last week, ESV Service has been a single monopoly fumigating cargo in Kherson. Other companies are not authorised by customs. They do not sign fumigation letters/applications and do not physically allow them to access vessels to carry out the work. The tariff of ESV Service is 50 cents + VAT, which is half the price offered in the market," says a local trader on condition of anonymity.

According to him, customs officers openly say it is "the SSU's(The Security Service of Ukraine) instruction".

Vasyl Padalka, who is allegedly part of former MP Ruslan Solvarn's business circle, is the director of ESV Service.

One of Latifundist.com sources, Nikita Poletayev, director of the fumigation company Biocontrol, claims that customs poses obstacles to fumigation conduct.

"We have applied to customs, to border guards to be admitted to fumigation services provision. And the customs deliberately has not signed the letters. At first, they argued it was due to a lack of documents. I used to bring them the documents. Then they said that there was no authorisation. I presented the documents required. Then they said: "Well, we will consider it within a month." Then they said straight out that only one company, ESV Service, is authorized to fumigate. They announced this to all fumigation companies," says Nikita Poletayev.

He adds that the average fumigation price in Kherson is 20-30 cents per ton. At the same time, he suggests that the enforcers are trying to raise the average price of this service through the monopoly of ESV Service.

"ESV Service has always had a higher tariff, not many wanted to work with them. Now the thing is that everyone will have 50 cents: half for the company and half to the officials. They say, "Don't worry, you will work, only we are now deciding how," adds a representative of the fumigation company who wished to remain anonymous.

ESV Service representative Mikhail Yavorsky denies that the company has privileged conditions in the fumigation services market. At the same time, he says, the company also has problems of a similar nature.

"The issue is that, like all the other companies, we are now facing the same kind of trouble. Look, our client's steamer in Kherson is being loaded now. And I have to fumigate it tomorrow. I technically cannot, as the letters are not signed. Tomorrow my client calls me: "Why don't you fumigate?" It is demurrage. Who will pay for it? We refuse new clients. Last week we didn't contract any new clients, only old ones. The border guards don't say how long a letter can be delayed. We have annual passes issued for a whole year. I don't understand why we submit letters to border guards if we have passes for a year," he notes.

Latifundist.com applied to the Customs Service in Kherson region, the Autonomous Republic of Crimea and the city of Sevastopol seeking clarification in relation to this issue.

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