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MAJOR EUROPEAN BANK SAYS IT HAS NOT BEEN PUT OFF COUNTRY DESPITE CORRUPTION ALLEGATIONS

EIB ploughs on in Slovakia despite clouded bridge tender

DESPITE controversy over a recent tender for a new bridge in Bratislava, and despite its unwilling involvement in a previous hot corruption scandal, the European Investment Bank (EIB) says it is undeterred from investing in Slovakia, and that it has no doubts about transparency.
The bank's latest project, known as the Košická bridge, is slated to be the Slovak capital's fifth link across the Danube river. It is being co-financed by the EIB, a non-profit European institution which supports capital investment projects in economically weak regions of the European Union and beyond.
The bank is supposed to supply a loan of 45 million euros covering 50 per cent of the estimated cost of the Bratislava bridge; the other half will be financed through Slovakia's state budget.

DESPITE controversy over a recent tender for a new bridge in Bratislava, and despite its unwilling involvement in a previous hot corruption scandal, the European Investment Bank (EIB) says it is undeterred from investing in Slovakia, and that it has no doubts about transparency.

The bank's latest project, known as the Košická bridge, is slated to be the Slovak capital's fifth link across the Danube river. It is being co-financed by the EIB, a non-profit European institution which supports capital investment projects in economically weak regions of the European Union and beyond.

The bank is supposed to supply a loan of 45 million euros covering 50 per cent of the estimated cost of the Bratislava bridge; the other half will be financed through Slovakia's state budget.

According to the results of a two-round public tender, the bridge will be built by a consortium led by Slovak construction company Doprastav. However, the decision of the tender committee has been criticised by the losing consortium, led by another domestic construction company, Zipp, and has raised doubts over the project's transparency.

The Zipp objections come before a previous scandal had even had time to cool: A tender for 35 light trains for the state railways firm, which the EIB indirectly financed.

In the scandal, a tender commission led by PM Mikuláš Dzurinda's brother picked a Swiss-Slovak supplier which offered a purchase price over Sk800 million more expensive than its competitor. The fall-out from the tender caused the resignation of Transport Minister Jozef Macejko.

Corruption in Slovakia, according to public opinion surveys, has reached epidemic proportions. The EU has said that graft will be a major focus of its upcoming evaluation of the country.

However, EIB officials insisted that the Košice bridge tender had been clean, and that they were satisfied with the results.

"There is a lot of talk about the tendering process in Slovakia. We want to react to these discussions here," said EIB vice president Wolfgang Roth of the allegations.

"The EIB controls the [Košická bridge] tender procedure. It's fair, it's absolutely correct."

The Košická bridge project began around a year ago when the EIB signed a contract with investor Metro Bratislava, co-owned by the Slovak state and Bratislava city governments.

After Metro declared the tender, seven construction companies submitted bids. After the April close of the first tender round, only two remained - the first, a consortium led by Doprastav and backed by an Austrian construction group, and the second, a consortium led by domestic companies Zipp and Sibamac and backed by Austrian steelworks Alpine Mayreder.

Although the tender's technical committee chose the Zipp consortium in both tender rounds, the evaluation committee recommended Doprastav on each occasion.

General director of Zipp Bratislava František Hirner said that the public tender had not been carried out according to originally approved competition rules, and that Doprastav had offered a dumping price which they would not be able to guarantee.

"The final price including insurance offered by Doprastav will be higher than their official bid," said Hirner, adding that the Zipp consortium had already submitted an appeal to the decision to the Slovak Anti-monopoly Office (PMÚ) as well as criminal complaints related to the decision.

However, Doprastav officials countered that the offered price had been realistic and the consortium could guarantee it.

Doprastav is Slovakia's largest construction company, specialising in transportation infrastructure and is involved in building many highway sections in Slovakia and the neighbouring Czech republic. The firm is also building the Branisko highway tunnel between east Slovakia's Poprad and Prešov, set to be Slovakia's longest when completed, as well as construction work on the Prague Metro.

In spite of the furore, the EIB maintains that it has examined the tender procedure and has not found any transparency-related problems.

"[As a basic condition] the tender process of construction firms should be on the basis of normal European Union (EU) rules and directives, as well as our internal rules, which are more detailed than EU directives," said EIB's Roth.

"Our discussions with Metro and Metro executives were running in that sense - that we studied the procedures which had been used in this public tender to see if they were acceptable. We came to the conclusion that everything was all right," he added, saying that the bank wants to begin providing financing as soon as late October or early November.

In Slovakia, EIB's total lending has amounted to 1.3 billion euros, mostly going to infrastructure and telecom projects, but also to projects supporting small- and medium-sized enterprises and municipalities.

The bank said that the media scandal had not affected its relationship with Slovakia.

"[The controversy] was not a surprise; it happens in lot of cases after a tender is completed," said Roth.

"Conflicts surrounding tenders are normal," he added

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