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06.03.2013

Shadow Procurement: the first figures

   

Six months after a scandalous law which removes state enterprises from the tender system, the civic watchdog “Nashi Hroshi” [“Our Money”] reports that the amounts of public funding now unaccounted for has risen sharply.

They compared the sizes of the tenders published in the Public Procurement Herald during January and February 2012 and 2013 and found that the number had halved, from 133 billion UAH in 2012 to 66 billion in 2013.  These two months, they note, are particularly indicative. Last year during this period a quarter of the year’s public procurement was tendered.

The main spenders of public funding have remained in the public eye – these being Naftohaz; the procurement departments of Ukrainian Railways and Energoatom, and even the four local energy suppliers bought up by billionaire and up till October 2012 Party of the Regions MP, Rinat Akhmetov

Nashi Hroshi however point out that some of the procurers who have vanished from sight are no less important. One is Kyivmiskbud – the Kyiv city construction company whose massive overpayments the watchdog has reported on a number of occasions. One example given is where Kyivmiskbud bought concrete for a quarter of a million more than the dealer price. It mentions also that it paid a million dollars for billboards.

Last year Kyivmiskbud held tenders just in the first 6 months of the year for 3.26 billion UAH.  It has now been removed from public scrutiny.  This is despite being one of the main construction firms in Kyiv which effectively forms the price for housing in the capital. If it regularly organize dodgy tenders with rake offs, then this has impact for property prices in the capital.  As well as not leaving money for the vast needs visible to anybody visiting or living in Kyiv.

There are many other such shadowy procurers, the watchdog writes.

Opposition parties have recently tabled draft law No. 2207, which would oblige state enterprises to report their procurement. It does not however force them to return to the tender procedure which was waived last year.

As reported President Yanukovych in August last year signed into force Law № 9634 on Amendments to Some Legislative Acts on Public Procurement, which removes tenders for State or municipal enterprises or enterprises where over 50 percent is owned by the State or municipal authority, where the procurement is carried out at the expense of the specific enterprise from the Public Procurement Act.   

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