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FIRM OWNED BY SDKÚ OFFICIAL WINS TENDER AS ONLY BIDDER

Košice tax office continues to bring controversy

FINDING a building to house the Košice tax offices, the subject of a Finance Ministry tender after a contract was scuttled earlier this year over suspicions of cronyism, continues to bring controversy. In the most recent development, the firm owned by a party official from the Slovak Democratic and Christian Union (SDKÚ), Ondrej Ščurka, who had signed the scuttled contract, has apparently won the tender – but only after his firm was the only bidder.

FINDING a building to house the Košice tax offices, the subject of a Finance Ministry tender after a contract was scuttled earlier this year over suspicions of cronyism, continues to bring controversy. In the most recent development, the firm owned by a party official from the Slovak Democratic and Christian Union (SDKÚ), Ondrej Ščurka, who had signed the scuttled contract, has apparently won the tender – but only after his firm was the only bidder.

Finance Minister Ivan Mikloš, also from SDKÚ, said that the bid made by Ščurka’s Nitra Invest firm was higher than that made by another firm, CTR, but that he nevertheless recommended that the contract be awarded to Nitra Invest. The Sme daily wrote on July 21 that Nitra Invest’s bid was €6.4 million for a five-year rental agreement while CTR bid €5.3 million for the same term.

Mikloš said CTR’s bid was not the more favourable one, despite its lower price, because if Ščurka firm won the state contract it would have to return previously written-off excess VAT of €1.5 million to the state over the next five years, according to Sme.

First tender cancelled

A month ago the Tax Directorate announced it was unable to evaluate which of two bids – made by Nitra Invest and CTR – was more advantageous so it cancelled its first tender and announced a new one, Sme reported.

In the second tender competition, Ščurka was the only bidder, offering a 5-year lease agreement for €6.3 million.

The leader of opposition Smer party, Robert Fico, who questioned the original lease for the Košice tax office this April, said that the first tender was cancelled only because CTR offered a lower price and Ščurka could not be declared as the clear winner of the tender. Fico charged that it is a case of party cronyism not seen in Slovakia in the last 10 to 15 years.

Fico said the second tender call was written to exclude CTR by insertion of a provision that the building for the tax office had to be constructed after 2008, a requirement that the building offered by CTR in the first tender could not meet, Sme wrote.

“This requirement wasn’t inserted on purpose but it stems from the law on energy-savings of buildings,” Mikloš responded, as quoted by the TASR newswire. He also charged that the situation is Fico’s responsibility as it was his government that first signed an unfavourable lease contract for the tax offices in Košice and that Fico is trying now to mislead the public, TASR wrote.

What happened earlier?

The situation in Košice, which has caused significant tension within the ruling coalition, was first brought to the media’s attention on April 11, 2011 when Fico termed a lease contract for the tax offices’ office space a clear “case of party cronyism”. Fico alleged that some of the money from the €6.6 million rental contract, sealed by the Tax Directorate with Ščurka’s firm at the beginning of the year, would end up in the coffers of SDKÚ, though he offered no evidence to support that charge.

The head of Slovakia’s Tax Directorate at that time, Miroslav Mikulčík, responded that the contract with Nitra Invest was completely in line with applicable laws and would save money for the state.

On April 15, Nitra Invest announced it was withdrawing from the lease agreement, stating that it did not want further suspicions connected with its name. Prime Minister Iveta Radičová, also from SDKÚ, called on Mikulčík to take political responsibility for the controversy and resign but he resisted her request, saying he had no reason to quit.

When the story first erupted, Radičová defended Mikulčík’s decision on the lease but later withdrew her support, saying that he had given her false information about the lease. Then Mikloš contradicted the prime minister’s demand for Mikulčík’s resignation, telling the media on April 18 that the tax chief should remain in his job.

Radičová and Mikloš then clashed head-to-head over Mikulčík’s fate, making the other ruling coalition parties quite edgy and opening the door to speculation about a power struggle within the SDKÚ.

“I have unambiguously said that I will not lead a government over which such a shade is hanging,” Radičová said at that time.

On April 20 Mikulčík announced that he did not want to be in the middle of a power struggle and resigned. The day before the resignation, Radičová, Mikloš and Mikuláš Dzurinda, SDKÚ’s chairman, had hammered out a compromise to the burgeoning conflict: Radičová and Mikloš would both respect the results of an audit to be conducted by Slovakia’s Supreme Audit Office (NKÚ). The NKÚ hasn’t published the results of the audit yet.

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