ŠKO-ENERGO’s Biomass Modernisation: Questions Raised Over Tender Process and Transparency

In one of the largest heating-sector investments in Czech history, the Mladá Boleslav-based energy company ŠKO-ENERGO s.r.o., a subsidiary of ŠKODA Auto under the Volkswagen Group, has launched a massive modernisation project aimed at replacing brown coal with biomass. Yet behind this ambitious green transition, a series of controversial procurement decisions, opaque tender processes, and potential ethical breaches have raised serious questions about governance and transparency.

A €180 Million Modernisation and a Vanished EU Subsidy

The project, worth an estimated €180 million, seeks to transform ŠKO-ENERGO’s heat plant into a more sustainable facility. A crucial component of the plan, the so-called OB4 package, includes the construction of a wagon tippler to unload wood chips brought in by rail. According to early project documentation, Innofreight was expected to provide the unloading technology, but TESYCO Group later emerged as a competing bidder.

Initially, the company intended to run an open public tender, a requirement for drawing on EU co-funding worth approximately €87 million. However, in autumn 2024, ŠKO-ENERGO abruptly withdrew from the public procurement procedure for undisclosed reasons, effectively forfeiting nearly half of the project’s funding. Instead, it opted for an internal selection process, citing operational considerations.

Internal Tender Turmoil: From Innofreight to TESYCO Group

The internal tender that followed soon became the subject of further controversy. Sources told RAILTARGET that TESYCO Group initially submitted the highest bid, yet after being allowed to revise its price in a "final offer" round, a standard practice within the Volkswagen Group’s internal procurement system, it lowered the bid enough to undercut Innofreight and secured the contract. When questioned about these developments, ŠKO-ENERGO provided partial responses but no comprehensive explanations, leaving key aspects of the selection process and pricing adjustments unclear.

According to insiders, the winning process was later annulled, reportedly around the time journalists began investigating the case. Consequently, ŠKO-ENERGO is now preparing for what will be the third round of supplier selection, amid growing pressure from Innofreight, whose solution had been part of the original project documentation.

Conflict-of-Interest Allegations

Perhaps the most troubling revelation involves a potential conflict of interest. RAILTARGET uncovered that Milan Poddaný’s wife is employed by TESYCO spol. s r.o., one of the companies owned by Pavel Peška, who also controls TESYCO Group, a bidder in the contested tender. Moreover, Poddaný and Peška are said to be long-time personal acquaintances.

Given Poddaný’s role in evaluating technical parameters and bids, this connection raises serious compliance and ethical concerns. ŠKO-ENERGO has confirmed that Poddaný indeed belongs to the technical division that had full access to all offers submitted during the tender. However, the company has not disclosed whether management or ŠKODA Auto’s ownership were aware of this relationship, nor whether any measures were taken to mitigate potential bias.

ŠKO-ENERGO Responds, but Questions Remain

Following RAILTARGET’s initial exposé, ŠKO-ENERGO sent an official letter of response, signed by managing director Tomáš Kubín, challenging some of the article’s interpretations but largely confirming the change in the tender mechanism. The company explained that the first public tender received no bids, the second (internal) one was cancelled due to a lack of transparency, and that a third tender, also internal, is currently ongoing.

ŠKO-ENERGO insists that this process does not jeopardise EU subsidies allocated to other parts of the modernisation project, though it acknowledges losing eligibility for EU funding specific to the OB4 unloading facility.

When asked whether the decision to abandon the public tender was made with the knowledge or approval of ŠKODA Auto’s top management, ŠKO-ENERGO declined to comment. The company also did not explain why no bids were received in the initial public competition or why multiple offers later appeared once parameters were reportedly changed.

Unanswered Questions and Ongoing Investigation

Despite repeated requests for clarification, ŠKO-ENERGO’s leadership has provided no further explanation regarding the tender’s irregularities or the conflict-of-interest concerns. RAILTARGET’s investigation suggests that the combination of internal tendering, personal ties, and lost subsidies points to systemic weaknesses in oversight within the Volkswagen subsidiary’s procurement process.

With the third round of selection still underway, both the Czech energy and rail-freight sectors are closely watching how the case unfolds. The outcome will not only determine who supplies the crucial unloading system but may also shape public trust in how EU-funded green-transition projects are managed in the Czech Republic.