(Podgorica, 8 November 2011) – MANS today filed further criminal charges to the Special State Prosecutor for Organized Crime and Corruption, Đurđina Ivanović, against Žarko Pavićević. The charges allege that he abused his position in the public procurement process for the Bar overpass.
Pavičević is alleged to have openly favored Podgorica’s Bemax, in choosing the winner of the overpass tender, granting the 1.45-million euro contract to the company in spite of quoting a higher price for the job than the other bidder. In addition to Pavićević, criminal charges were also filed against five Bar functionaries chosen to be on the Commission overseeing the public procurement process, including: Dragan Simović, Aleksandar Brajović, Đuro Karanikić, Tatjana Šišević and Nikola Popović.
In late January of last year, Pavićević took the decision to initiate a public procurement process for the overpass and to establish a commission with the individuals noted above. The public tender call was released a few days later, ranking the cost-effectiveness of the bids as the most important criteria. Other criteria included pricing, timelines and payment conditions. The call also specifies that 1.45-million euros were set aside from Bar’s municipal budget for this project, while underlining that bids based on advanced payments will not be considered.
Three bids were submitted by February 2010, according to the commission. The bidders were Bar-based Kalemper, Užica-based Putevi and Podgorica-based Bemax (as part of a consortium with Konstruktor-Neretva from Čaplinje). Kalemper’s bid was rejected since it had failed to obtain all of the required licenses.
The bid made by Putevi AD was for 1.39-million euros to be completed within 154 calendar days. In spite of the fact that Putevi AD made an offer that was 124,000 euros cheaper, Bemax nevertheless won the tender.
The ruling notes that: “it is clear to the Commission that Užice’s Putevi AD offered a lower price, while Bemax DOO offered a shorter timeline for completing the project and a better payment conditions for the municipality. Given this, the commission believes that consideration must also be given to the fact that in a period of crisis the municipality will be relieved of additional debts for the completion of this project and will not be placed in the position of neglecting other projects earmarked in the budget and in municipal planning documents.”
The justification that “in a period of crisis the municipality will be relieved of additional debts for the completion of this project” is unacceptable, since the public procurement plan for 2010 sets aside 1.45-million for this project (while the Decision on Implementing a Procurement Process notes that the “funds were secured from the budget”).
Accordingly, the Commission decided to grant the contract for the overpass to Bemax DOO at a price of 1.448-million euros, with 50% of the funds paid during the construction process and the remainder upon completion (within the 6-month deadline). Along these lines, Bar’s mayor adopted a Decision on the Winning Bid in April 2010, stating that Bemax DOO was ultimately selected.
The agreement for the overpass was signed by Pavićević and Bemax on 21 June 2010. On this occasion it is mentioned for the first time that the project will be financed by the Traffic Directorate in the amount of 600,000 euros in 2010.
The method of payment stipulated by the agreement included a 20% advance upon the signing of the agreement, then up to 50% of the total cost would be paid upon the completion of certain agreed upon targets, and the final 50% would be paid upon completion of the contract within the six month deadline.
Likewise, a 3.5% discount is mentioned in the agreement, bringing the total price down to 1.397-million euros. However, no mention is made concerning the basis of such a discount and whether advance payments were made.
As far as the deadline for executing works on the overpass is concerned, instead of the job being completed by 15 March 2011 (as stipulated in the agreement), Bemax only completed the project in mid-July 2011. At the time an official opening ceremony was organized – though without the proper use permit having been obtained – by Žarko Pavićević and Veselin Grbović, the Director of Transportation.
According to the information we received from the Municipality of Bar, Bemax was late in starting work on the overpass due to unresolved property and legal issues along its route. Regardless, the municipality never concluded an annex to the contract that would extend the deadline. There is also no information available on the amount of time it took to solve all the property and legal issues along the route, though we received confirmation from Bemax that they didn’t pay any penalties for the delayed implementation.
From the above it follows that the Municipality of Bar and Žarko Pavićević mislead potential bidders, by stating explicitly in the tender that there would be no advance payments made – thereby eliminating many potential bidders who may have offered a lower price for the transaction. At the same time, the principles of competition, transparency and equality – which are guaranteed by the Law on Public Procurement – were grossly violated. Furthermore, due to the municipality’s and Pavićević’s negligence the deadline for completing the project as a selection criteria was violated (even though they already knew of unresolved property rights disputes along the route).
The criminal charges currently filed represent further proof of our suspicion that the Municipality of Bar is being governed in a fundamentally non-transparent way. As the mayor, Pavićević has continued to violate laws and regulations at the expense of the budget and interests of the citizens of Bar.
For almost two years, MANS has been pointing to the multiple legal violations perpetrated by Bar’s mayor. We believe that the Prosecutor’s Office has more than enough reason to take very specific steps in processing this and other cases. MANS thus calls on Special State Prosecutor Ivanović to speed up the investigations into Pavićević and prevent further damage to the public interest and Bar’s municipal budget.
