Spacecom CEO detained on suspicion of involvement in cartel arrangement

  • 2005-04-13
  • By TBT staff
TALLINN - The chief executive of a private rail operator was detained by security police last week on suspicion that he had concluded a cartel agreement with another Estonian transit operator. Spacecom CEO Oleg Osinovsky was questioned by investigators for two days and released April 8.

The incident, part of an ongoing investigation that began Feb. 2, triggered a wave of controversy and speculation about Estonia's transit industry.

The security police detained Osinovsky on April 6 upon his arrival in Tallinn from Moscow, citing a penal code article that prohibits any deal that jeopardizes competition.

Commenting after his release, Osinovsky said his detention was "clearly a commissioned job." "[The detention] coincides with the timeframe when a final decision on [rail transportation] tariffs will be made," he said.

Spacecom is a private transit operator owned by Russia's Severstaltrans group. It uses rail infrastructure owned by Estonian Railway. The two companies have had a rocky history, with each accusing the other of bad business practices.

The Postimees, a leading daily, speculated that Osinovsky was suspected of having concluded a cartel-like arrangement with Eesti Raudtee (Estonian Railway), the country's main rail operator.

Officials at Estonian Railway, which is partially owned by the state, reacted bitterly to the speculation. "The paper appears to have presented preliminary assumptions as fact; furthermore, no mention is made of the source of the information," Eesti Raudtee development director Raivo Vare said.

"Unfortunately the journalist, while aware of the actual state of things... has misled the public and claimed that a decision on the allocation of capacity can be expected next week, when in reality this happened already several weeks ago," said Vare.

Osinovsky echoed the sentiment. "We agree with Raivo Vare that the agreements we are being suspected in are impossible. There haven't been any [such agreements], and there won't be. We would rather have an agreement with the Vatikan than with the Estonian Railways," he told The Baltic Times through his spokeswoman.

If there was a cartel agreement, he explained, it made no sense that only one party to it was detained.

In a seemingly related incident, on April 8 Spacecom reportedly brought train traffic at Maardu, near the key transit port of Muuga, to a halt to prevent Estonian Railway from taking an oil shipment to the Trendgate company's fuel terminal at Iru. As a result, by 11:45 a.m. a train belonging to Transoil, a transit company, with 66 cars of crude had to stop.

"This is clearly an escalated conflict which will be at once linked with the detention of Osinovsky," Vare said. "We see with some concern that Spacecom is preparing a major anti-Eesti Raudtee campaign, as according to our information such an order has been passed down the command chain from the owners."

Under an agreement with Trendgate, freight trains are shifted from the Maardu station to the Trendgate terminal by Estonian Railway, which is owned by the state and private investors.

Spacecom officials rejected the accusation that it had blocked the rail, saying it is Estonian Railways dispatchers who actually control railroad traffic. They stressed that their locomotive could not move because the dispatcher had the red light on, which left their locomotive standing on the track that belongs to Trendgate (a company connected with Spacecom) for almost a day.

"There is no connection whatsoever between these two things 's it was just an error of the dispatcher," a Spacecom official told the Baltic News Service. "It is possible to use a locomotive of either Spacecom or Eesti Raudtee at the station of Maardu. The train was coupled with a Spacecom locomotive, but the dispatcher works for Eesti Raudtee and wouldn't allow it to pass."

Eventually Spacecom cleared the path, according to Estonian Railway officials, though only partially. "They simply shifted their locomotive closer to the terminal, because a client had to be served by precisely this branch line," Vare said. "Things have changed insofar as the station is no longer blocked, but we still cannot take trains to the fuel terminal."