Public Procurement Law being ignored

Transparency Serbia warned that the eight agreements on loans which parliament is currently debating are bypassing the Law on Public Procurement.

„The practice of contracting the costliest public works through inter-state agreements raises questions about the validity of the system in which the state sets strict rule of competition in public procurement and treats violations as acts of crime,“ a statement said.

The TS warned that MPs are set to confirm agreements worth more than a billion Euros which bypass the law which was adopted in 2012 to combat corruption and secure transparency and competition. The law, on the other hand, prescribes rules for open bidding for all procurements worth over 4,000 Euros.

For instance, along with the loan from the Chinese Export-Import Bank for building a railroad from Novi Sad to Kelebija, it is envisaged that this job, worth 1,162,810,000 USD, would be done by the Joint Venture of China Railway International Co.Ltd & China Communications Construction Company. Furthermore, the China Communications Construction Company would also be building a highway Preljina - Požega worth more than 520 million USD. Part of the money for financing these projects (15%) will be coming from the state budget or from Serbia Railroads, or Serbian Roads company.

The organization said the loans conditions were presented to the public as favorable but with no details about the evaluation of the projects or whether the costs would be lower if a tender had been called.

„The Serbian government also proposed the approval of six contracts on development loans under the rules of international financial institutions,“ it said. Although the implementation of the domestic Public Procurement Law has not been agreed, at least at least the rules providing for competition will apply.

Transparency reminds that the current drafting of the new Law on Public Procurement is being done in the first place in order to comply with European standards, and that, as part of the negotiations on Chapter 5, it is pointed that one of the problems is too often exemption from the application of laws on the basis of interstate agreements.