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TRANSPORTATION MINISTRY PICKS NEW ADVISOR; WITHOUT A TENDER

Road gets bumpy for PPP tenders

ONE of the largest tenders in Slovak history is rolling forward, but the road ahead seems much bumpier than the government had planned.

ONE of the largest tenders in Slovak history is rolling forward, but the road ahead seems much bumpier than the government had planned.

Complications have emerged only a couple of months after the Transportation Ministry opted for a public-private partnership (PPP) to plan, construct, finance, operate and set up maintenance for five stretches of the D1 highway, covering a total distance of 74.84 kilometres. Currently, there are two ongoing PPP tenders that would award the winners with a 30-year contract. The Transportation Ministry picked an advisor for the first PPP project the country has embarked on without a public tender: a move that opened the floodgates to criticism from opposition parties, business and political ethics watchdogs. The ministry replaced the previous advisor last December.

Transportation Minister Ľubomír Vážny said that his ministry did not violate public procurement legislation when picking the advisor, a deal worth Sk400 million, and called the criticism "unqualified".

Minister Vážny said that time pressure and looming deadlines made the move justified. He argued that the legislation allows for skipping public tenders in special or emergency situations.

State institutions are obliged to select service suppliers based on public tenders. Helena Fialová, spokeswoman of the Public Procurement Office, said that a state body can only select one without a public tender in case of "special events" and when the state body is not the cause of the event, as quoted by the Sme daily.

According to public procurement legislation, the mian "special events" are defined as natural disasters, accidents or situations that directly threaten the life or health of people or the environment. The Jaroslav Ružička law firm, which represents international firm CMS Cameron McKenna, will provide consulting services concerning the PPP mega projects to the ministry. The Transport Ministry announced earlier in February that it would spend Sk391.3 million without VAT on consulting. The parties signed the contract on December 21, 2007, the SITA newswire reported.

Pavol Prokopovič, a former transport minister and member of the opposition Slovak Democratic and Christian Union (SDKÚ), said that replacing the previous advisor, Mott MacDonald, during ongoing tenders posed a major risk to the whole project. He doubted that the government had a legitimate reason for doing so.

"The essential point is that this happened without a public tender and without any logical justification," Prokopovič said.

Prokopovič said that the previous government chose Mott MacDonald in an international tender.

Minister Vážny rejected allegations that the new PPP projects advisor has links to the ruling coalition, arguing that the firm is one of the biggest consortia in Europe that conducts business in this field. He also said that the Transport Ministry considers the consulting company's plans more professional than Mott MacDonald's, SITA wrote.

Political ethics watchdog Fair Play Alliance also said that selecting an advisor without a public tender is a dangerous trend.

"Public procurement rules say that tenders can save huge amounts," Zuzana Wienk of Fair Play Alliance told The Slovak Spectator. "In case of particular contracts, these can be from 6 to 15 percent of the final price."

When considering a Sk400 million tender, savings of 6 to 16 percent is substantial, Wienk added.

"We really have to ask if the political goal is to speed up highway construction, then at what price," Wienk said. "Also, ask whether during these expedited procedures the [highway] tenders would not get overpriced."

Wienk also posed the question of whether a political goal, even if it's lofty, is worth violating the rules.

Ľuba Lesná contributed to the report.

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