(Podgorica, 16 August 2012) – The procedure for delegating contracts for the execution of capital projects is characterized by multiple violations of the Public Procurement Law, which has been confirmed by a recent study completed by MANS concerning corruption in Montenegro’s public procurement system. The information that MANS obtained indicate that the Traffic Directorate, while concluding an agreement for work on the Risan-Zabljak road, the Savnik-Grabovica passage, and for the Ivica Tunnel, had openly shown favoritism towards Bemax.
The Directorate in October 2008, released a statement for the choice of the most favorable tender for the building of the route. The value of the contract, which was financed from the budget of Montenegro, is estimated at €14.5-million.
The contract was won in 2008 by the company Putevi from Ulcinj, which was the only company to submit a tender worth €17.5-million. The contract was thus concluded on the basis of an agreement that was €3-million above the estimated price of the contract (i.e. in spite of the fact that the Directorate had the option of canceling the procurement project since it didn’t receive any offers that fell within the budgetary limits of the project). The Procurement Law allows the initiator of a procedure to annul it if the offers on hand are all above the estimated price of the contract.
Eight months later the contract was annulled, although MANS has yet to receive an explanation from the Directorate as to why it had annulled the deal with Putevi.
At the same time, the Directorate in August 2009, initiated negotiations without a prior call for tenders, by sending to four companies a request to submit tenders. This call was sent to Podgorica-based companies PORR, Tehnoput and Bemax as well as Mehanizacija i Programat from Niksic. The call noted that the value of the contract could not exceed €17.5-million, which was the value of the agreement with Putevi and €3-million above the initial call price.
In order to initiate the negotiating process, the Directorate is required to obtain the approval of the main institution responsible for such procedures: the Directorate for Public Procurement. The approval was actually obtained a full month after the call had already been issued, which is yet another violation of the Law by the Traffic Directorate. In spite of all this, in December of that year a new agreement was concluded with Bemax, which was the only one to submit an offer on this request, for the full amount of €17.5-million.
One of the requirements of the deal that Bemax was supposed to fulfill was to furnish the Directorate with evidence that it has access to credit and other financial means to meet its obligations under the deal. Instead of furnishing this proof, Bemax submitted its own report in which it stated that it was carrying out jobs up to €55-million in value and that, given this, it is credit-worthy enough to independently finance the construction of the Risan-Zabljak road. Even though such a statement does not represent in any way proof of creditworthiness, since Bemax is essentially guaranteeing itself, the Directorate accepted the evidence and continued to deal with Bemax.
Another reason to reject the offer, is the fact that Bemax as part of its offer included receipts for the payment of taxes and contributions that were older than 6-months (which was the deadline specified in the tender). The Directorate again ignored this and gave the contract to Bemax.
Due to all of the above, at the end of July, MANS submitted to the Supreme State Prosecutor a legal complaint due to suspicions of abuse of power by the head of the Traffic Directorate, Veselin Grbovic, as well as members of the Commission for the Assessment and Valuation of Offers, Milo Ostojic, Vlatko Cipranic, Miodrag Bakrac, Radojica Poleksic, and Jelica Boskovic, as well as against the director of Bemax, Veselin Kovacevic, for suspicion of abusing his position in an economic transaction.
