Public procurement

PR during pandemic in Chisinau and millions, allocated in the absence of a tender to a "close" company to the mayor

Author: Julieta Savițchi
15/05/2020 11776

On April 22, the mayor of Chisinau Ion Ceban was taking pictures in the background of several equipment units and announced with great pomp that he had started the renovation works of the pedestrian alley on Mircea cel Batran Blvd. After the mayor left, the equipment that dug a few ditches at the intersection with Petru Zadnipru Str. was withdrawn, and the City Hall subdivisions were to deal with the tenders for the designation of the company in charge with the repair of the alley. "From too much of a hurry", the authorities of Chisinau did not organize a tender to identify the economic unit to perform the works. The municipal enterprise Exdrupo was designated "ex officio" to repair the pedestrian alley on Mircea cel Batran Blvd.

Ceban's promises and proofs of 4.7 million

On March 26, Ion Ceban issued a provision declaring Praetura of the Ciocana sector beneficiary of the repair works on the pedestrian alley on blvd. Mircea cel Bătrân and gives the green light to the praetor from Ciocana, Sinilga Școlnic to start the tender procedures for the works.

The document signed by Ceban shows that the entire segment from Alecu Russo Str. to Ion Dumeniuc Str. will be repaired. After the repair, 130 benches, 180 rubbish bins, six children's playgrounds and two sportsgrounds will be installed on the alley.

Pedestrian alley on bd. Mircea cel Bătrân. Summer 2019

A segment of the pedestrian alley on Mircea cel Batran Blvd., from Alecu Russo Str. to Petru Zadnipru Str, was repaired and arranged in 2017, works for which the municipality spent around three mln. lei.

On April 22, Ion Ceban said that 4.7 million lei were allocated from the municipal budget for the repair of the pedestrian alley, and the works involve the change of asphalt and curbs on a length of 1.5 km and a total area of 14 thousand square meters.

The mayor also said that he intends the works to be carried out within two months, the alley to be fully arranged with the completion of urban furniture, but also "other components, such as street lighting and installing new rest areas for residents".

The mayor of Chisinau argued his decision by the fact that the pedestrian alley, located between two sections of heavy traffic, each with two lanes, "is the main recreation area for the 147 thousand Chisinau residents in the Ciocana sector and other citizens”.

Doubtful tender for design services

On April 2, Praetura of Ciocana sector published the announcement for the tender for design services of the pedestrian alley on Mircea cel Batran Blvd.

The specification, approved by the Deputy Mayor Victor Chironda pointed that the panels for the placement of professional photos and paintings, the installation of benches, children's playgrounds, mini-sports fields, chessboards, fountains, lawns, etc. must be considered while drafting the project.

The bids were to be submitted by April 17, and their opening on April 21. The estimated value of the acquisition, without VAT, amounted to 300 thousand lei.

Four economic agents participated in the tender, Gorgona SRL, Chisinauproiect Municipal Design Institute, Maistcons Grup SRL and SA Intexnauca. On April 24, two days after Ion Ceban started the works, the winner of the tender was designated Chisinauproiect, which proposed an offer valued at 241.3 thousand lei.

The smallest offer, of 200 thousand lei, was that of SRL Gorgona, which was rejected on the grounds that "the bidder does not meet the technical and / or professional capacity". The company has been on the market for more than ten years and has won several international competitions, as well as successful projects in Moldova.

Vladimir Prodan, the manager of SRL Gorgona said that he would not challenge the result of the tender, but will call to account Praetura Ciocana for the discriminatory attitude towards the participants in the tender and for the attack over the company's image. "I will not insist much on this project, it does not cost a lot of money, we have much more advantageous and interesting offers. I have many acquaintances and even friends at Chisinauproiect. The company belongs to the municipality, is facing financial problems and it is clear that Praetura has favored it. But why did they have to mimic the tender and offend us? I don't want to upset those from Chisinauproiect, but our company is much better equipped ", said Prodan.

However, the contractor wrote a complaint to the Public Procurement Agency, requesting the prosecution of representatives from Praetura Ciocana for violating the procurement procedure. „Please hold liable the persons within the Praetura of the Ciocana sector of the Chisinau City Hall who admitted the following violations of the rules for initiating and conducting public procurement procedures (art. 327 of the Contravention Code):

a. restricting the access of economic units to the procedure for granting public procurement contracts;

b. violation of the rules for drawing up and keeping the public procurement file”.

SA Intexnauca, which proposed the highest price of 260 thousand lei, contested the tender result. The economic unit rejected the reasons invoked by the contracting authority, for not having presented all the requested documents. Another argument of the appellant is that the documents for participation in the tender of the Chisinauproiect Institute were not signed by the director, but by another employee, in the absence of the proxy.

2,3 million lei for furniture

Although Praetura Ciocana received the right to organize tenders for the repair of the alley, the General Directorate of Communal Housing and Planning of Chisinau City Hall was made responsible for purchasing the furniture for the pedestrian alley on Mircea cel Batran Blvd. In the absence of a renovation and modernization project, the General Directorate of Communal Housing and Development published on April, 16 the announcement for the purchase of urban furniture, worth 2,290,000 lei, and the opening of tenders was scheduled for May 7. The contract will be valid from May 19, 2020 to December 30, 2020, a term that far exceeds the two months announced by Ion Ceban for the repair and arrangement of the alley.

According to the tender documents, the number of unit furniture is the same as in the Order signed by Ion Ceban on March 26.

The tender was divided into four lots. One of them provides for the purchase of 130 benches- 720 thousand lei (5,538 lei for a bench). Benches must be made of natural wood on iron cast.

Moldovan producers sell such benches at the price of 2,800 - 3,000 lei each.

Bank at the price of 2800 lei, similar to the one in the Specifications

The second lot is estimated at 464.4 thousand lei and is provided for the purchase of 180 garbage bins, as written in the mayor's order. Thus, a wooden trash can on iron cast will cost around 2,580 lei.

A sum of 948 lei is scheduled for six playgrounds and 157.6 thousand lei for two fitness courts.

Contractor appointed from out the tender

The repair works of the pedestrian alley are to be carried out by the Municipal Enterprise Regia Exdrupo. The economic operator was appointed ex officio in the absence of a tender. The estimated calculations show that around 2.2 million lei will be spent for the repair of sidewalks and the installation of curbs, out of the 4.7 mln. promised by Ceban for the arrangement and modernization of the alley.

The repair works of the pedestrian alley on Mircea cel Batran Blvd. are confirmed by the official portal of Praetura Ciocana.

What the authorities say

Sinilga Școlnic said in a phone call that she does not know which contractor will carry out the repair works. "The winner of the design tender has just been announced. We will see, if there are no appeals, then we will organize a tender to name the economic agent to perform the works ".

Sinilga Școlnic guaranteed that the pedestrian alley on Mircea cel Bătrân Blvd. will be a modern one, and the public money will be properly spent. Asked why a new arrangement of the alley was needed as it was repaired in 2017, the head of Praetura of the Ciocana sector said that the segment between Alecu Ruso  str. and Petru Zadnipru str. was repaired then, and now, the segment from Petru Zadnipru str. to Ion Dumeniuc Str. will be repaired. Also, the praetor of Ciocana sector was asked why the announcement of the tender for the design of the alley includes the segment from Alecu Russo Str. The official replied that it is planned to include new elements, such as lighting and installation of fountains.

Subsequently, the head of the Praetura of the Ciocana sector came with written precisions: “We hereby inform you that before the rehabilitation works on the alley of Mircea cel Batran Blvd. start, the project for its arrangement and modernization will be drafted. For this purpose, the Public Procurement Working Group of the Praetura of Ciocana Sector organized the public tender and as a result the winner was designated - IMP Chisinauproiect with the offer of 289,600 lei, including VAT. The economic operator SA Intexnauca, participant in this public tender (the offer of which was rejected, because it offered the highest price and previously did not develop similar projects, submitted on April 29, 2020 an appeal against the decision of the Working Group for Public Procurement to the National Agency for the Settlement of Appeals, which is to rule on the appeal within 20 working days. At the same time, I inform you that the works for changing the curb and the asphalt pavement are carried out by the municipal enterprise Regia Exdrupo”.

Ion Ceban refused to answer our questions and suggested that we call the media service.

Natalia Ixari, the press officer of the Chisinau City Hall, told us that it is only about repairing a sidewalk, and Regia Exdrupo ensures the works in the field of construction, repair and operation of road infrastructure, which is why, no tender was organised.

What the experts say

Veronica Herța, PL councilor, former head of the Finance Department of Chisinau City Hall, considers that Ion Ceban is illegally using budgetary resources to promote the Socialist Party before the electoral campaign for the presidential elections. "If at the level of the State Budget, as a result of the impact of the pandemic the revenues have already been reduced by 14.3%, at the municipal level, things are not better. An estimate I made earlier shows that at the municipal level, the real deficit without a source of coverage, in case the non-priority investments are not stopped, will be over half a billion lei at most. So, all non-priority spending must be stopped, even if for some this is an election  year.

On April 1, the mayor general forbade, amid the state of emergency, the initiation of public procurement in order to purchase goods or provide services for all contracting entities within the Chisinau City Hall. In April, contrary to the mayor's statement, the Communal Housing Department announced the tender for "Urban and play furniture (including installation) on Mircea cel Batrin alley". On April 22, Ceban, contrary to his own statements, announces that "today the renovation works of the alley on blvd. Mircea cel Batran start". Why did Mayor Ceban publicly announce on April 22 that "today the landscaping works start" but the design of the landscaping works did not? Moreover, it was not known who would do the design?

In the absence of a development project, how is it possible to announce the tender for street furniture, including the technical descriptions of the elements, ie it was already known how those 130 benches with backrests, 180 bins, six playgrounds and two fitness equipment will look like? How could the company that offered a price about 40 thousand times higher than another company with a rather rich experience be designated the winner of the design tender? In conclusion, we can see that PSRM illegally used the municipal budget to win Chisinau City Hall, and now, through its representative Ion Ceban, continues to use the maximum municipal budget for the autumn elections", argued Veronica Herța.

Maria Covalciuc, director of the Association for Efficient and Responsible Governance (AGER), considers that the local authority has admitted several violations, including in terms of the transparency of procurement. "The decision of Chisinau City Hall to redevelop and modernize some areas of the city is welcome, but we must ensure that the public budget will be used effectively in this case, especially in current context. Thus, the decision of the Chisinau City Hall to prohibit, during the state of emergency, the initiation of public procurement not intended to prevent and combat COVID-19 and the announcement by the DGLCA of the procedure for purchasing furniture, with fairly high estimated prices for those benches with backrests or trash cans, is at least, controversial. One of the principles of public procurement is the efficient use of public money, so we must carefully monitor what kind of goods will be purchased and installed.

In terms of the procedure for the procurement of design services, the contracting authority has the possibility to publish the award decision in the MTender system, so that information on the reasons for the disqualification of tenderers is available. The award criterion chosen was the best value for money, so it is imperative to make transparent the information on how the bids were evaluated and how each participant was scored. Entries such as "The tenderer does not meet the technical and / or professional capacity" are not sufficient. However, we refer to expenditures from the public budget and information which must be public ", said the expert.

Regarding the appointment of Exdrupo to carry out the works, another expert, Andrei Rogac, legal consultant at EBRD, claims that the contracting authority had to argue its decision: “For the City Hall to have the right to delegate works directly to Exdrupo, it needs to perform works in proportion of 80% only for Chisinau. This is not stipulated in national law. But it is stipulated in the Moldova-EU Association Agreement and this rule must be respected by the local public authority. The problem is that we can't really find out whether or not 80% of Exdrupo's works are for Chisinau alone. The contracting authority must argue its decision. With such an approach, the Chisinau City Hall can give all the works to Exdrupo, without organizing any more tenders”.

The investigation was carried out within the Media Campaign "Raising awareness about corruption in public procurement", conducted by the Center for Investigative Journalism with the support of the National Endowment for Democracy

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