Public procurement

Grand motorsports complex planned in Orhei, for which there is no money

Author: Natalia Porubin, Elena Moldoveanu
07/11/2016 24077

Orhei authorities have announced two years ago about the construction of a European motorsports complex, in the absence of enough money. Almost two million lei were wasted for designing the complex: 1.2 million lei from the national budget and over 600,000 from the district budget, after which the project stopped, because money was not earmarked for the construction. The Court of Auditors found that the design was done in the absence of a feasibility study and the procurement group rejected the company that proposed the lowest price as the selection criterion was breached. As a result, the National Anticorruption Center opened a criminal case against ex-mayor Vitalie Colun for abuse of power. Former mayor rejects accusations.

State earmarked over one million lei

In 2014, the state has allocated 1,200,000 lei  for designing the European motorsports complex in Orhei. The money was intended to "finance capital expenditures."

In October 2014, Orhei Mayor’s Office voted a decision by which they included this amount in the local budget. The project authors  said that Moldova had great potential in terms of motorsports and  this initiative was backed by several councilors and former mayor of Orhei, Vitalie Colun.

Thus, in June 2014, the mayor’s office decided to approve "the concept of socio-economic development of town Orhei for designing the European motorsport center, issued by the councilor Vladislav Shevchenko". Also, "mayor Colun was forced to develop a technical project of execution and feasibility study on the land where the motor racing tracks were supposed to be built”. To this effect, the mayor was to initiate the procurement procedure and tender.

Vitalie Colun: „National budget was supposed to earmark money for construction

Former mayor Vitalie Colun claims that they did not have money first onset, but the state was supposed to provide necessary funds both for the construction of the complex and design. "The initiative came from Democrat councilors  in Orhei and was later taken over by the Association " Orhei Autodrom", representing the interests of athletes in the field. The national budget earmarked 1,200,000 lei for design and the councilors gave the rest of money. The money for the construction was supposed to be earmarked from the national budget, because the town cannot afford the luxury of building it.  We planned to make a complex for international competitions that does not exist in the former Soviet Union and Eastern Europe. World competitions were to take place here. But after Orhei town administration changed, the project stopped”, said former mayor.

Dozens of hectares from public property

According to former mayor Vitalie Colun, the  mayor’s office offered  a total surface of 45 hectares for the construction of the motorsports complex, of which 38 hectares for the complex and the rest for the protection of the River Raut. Thus, on 30 December 2014, the mayor’s office  issued urbanism certificate for designing the complex  on 2 public lands  - one with an area of 22.8401 hectares, and another of 15.4826 hectares, located on the ring road of Orhei, in Slobozia Doamnei sector.

The construction of the multifunctional complex is set in Orhei Regional Development Strategy 2016-2020. However, the document does not set clear term for the project completion as it does not  stipulate any deadline. The strategy writes that the money for the project will come from the district council or from extra budgetary sources. Sergiu Gutu from the Association "Orhei Autodrom" claims that they have never fixed a deadline for the completion of this project and 230 million lei is necessary for building this motorsports complex.

Design made by a Russian company

According to Public Association "Orhei Autodrom", the design was developed by Russian company "Racetracks". On its official portal, this company writes that it designed several motor tracks in Russia, Kazakhstan, Ukraine and Dubai. "Multifunctional complex, to be built in Orhei at international standards, will be used to conduct national and international karting competitions, auto and motocross sport, education activities, entertainment etc. Similarly, the complex will be attractive to tourism development", reads the plan developed by the " Racetracks"  that argues that is working with Hermann Tilke, famous architect of Formula 1 tracks.

All engines in a multifunctional complex 

Russian company proposed tracks for practicing over 10 types of motorsports for the complex in Orhei.

According to the project, the complex will be built on two plots, one each side of the river Raut. First, they planned to build the karting track, with a length of about 1400 meters, and then a drag track with a total length of 850 meters. Tracks for autocross, motocross and Jeep Cross Trial with a  length  of 1 250 to 1 500 meters will be arranged across the other side of the river. The complex will be equipped with specialized infrastructure, stalls for teams and stands for spectators.

"Money used did not have any social or economic impact"

According to an audit report of the Court of Auditors, local authorities have committed violations at the outset: "In the absence of a feasibility study on determining the need and opportunity of building a European sports complex, the council  allowed the design in order to achieve  the project  from financial funds amounting to 1.9 million lei ", said the Court of Accounts. 

Under the project, the expected value of the works is 200 million lei, a sum almost impossible for the local budget. The Court of Auditors notes that the design was carried out in the absence of the decision to award the land. "Proceeding from the above, the audit reveals use of financial resources for design, without any socio-economic impact. The audit reveals that the working group for public procurement within the mayor’s office Orhei won the contract for design services of the European sports complex in the town Orhei, having as selection criteria of the winning offer, the maximum points for 3 factors: the price of the offer, period of execution, capability of the tenderer  (including similar experience). The criterion has not been respected, and the tenderer who totaled the maximum score was rejected and they accepted the one with average points", reads the report.

Tender ended with criminal case

National Anti-Corruption Center (NAC) opened criminal cases against former mayor Vitalie Colun for abuse of power. According to NAC, it was found that "on 19 December 2014, following prior agreement with the working group, they signed the contract no. 229 and registered it at the Public Procurement Agency, based on which Orhei Town Hall purchased from SRL "Taracadas" sports complex design services in  town Orhei, worth 1 873 000,00 lei,  by 881 861 lei more than the lowest offer".

Also, the NAC investigation revealed that „by the decision No. 72 of the working group on awarding the agreement of design services for the sport complex, the winning contractor was selected the offer of the consortium SRL „Teracadas”, SRL „Intexnauca”, Individual Enterprise „Gorbaciov Mihail Gheorghevici”  at the price of 1 873 000 lei,  in spite of the fact that other economic unit presented a better offer -  of 991 139,16 lei – and according to the centralizer of points, got more points  against the winning consortium ”. 

Rejected for „ irrelevant experience”

The working group argued that the company that proposed the lowest price was rejected because it had "irrelevant experience in design services". Criminal investigation has established that "in fact, the design of the European sports complex was executed by" Intexnauca "under the contract signed with  SRL" Taracadas" against the sum of 840 000 lei, while the rest of the amount has been transferred to the company " Gorbachev Mikhail Gheorghevici" in the Russian Federation.

Former mayor: „I reject all accusations”

Vitalie Colun, former mayor of the town Orhei qualifies as erroneous conclusions of the Court of Auditors. "Court of Accounts treated erroneously the fact that we have not bought construction works, but we bought designing services. The Regulation which the Court of Accounts mentioned is used just for works, while the contract which we signed pertains to purchase of design services. It is actually another regulation that sets the purchase of goods and services and not construction works. The document of the Court of Accounts does not refer to individuals but to the mayor’s office”.

As for the criminal case, former mayor  said that the selection of  the company was performed without any violations, as experience in designing motor tracks was requested under the specifications. "They both designed the buildings, carried out feasibility and geodesic studies, everything related to master-plan to framing the land tracks, which is why, we considered the experience of the consortium, of Mr. Gorbachev, who is accredited by the International Federation of Automotive Engineering for this design. The SRL that has not been selected, has experience in designing buildings but not in motor  tracks", said Vitalie Colun for CIJM reporters.

He said that the feasibility study was  conducted in line with the design, as required by the contract, and  was supposed to be approved by the current administration of the mayor’s office. "When elections were held in 2015, the contract has not been finalized since then. We started the project without having money, because no investor would agree to come if there is not a master plan, a feasibility study and a project already approved",  said  Vitalie Colun.

„Orhei Autodrom” requests from mayor’s office the plot for construction

In early 2016, the Association "Orhei Autodrom" has sent a request to  town council and mayor of Orhei, seeking support for the project. "The design works have been completed and the project will undergo technical expertise. The district council will cover expenditures for it. For project implementation, please send us previously allocated land for construction for designing complex. This will help us to identify real investors to build complex", writes the request of the Association  Orhei Autodrom".

The president of this organization, Sergiu Gutu says that the mayor’s office has not come up yet  with a solution: "We do not have a decision, I do not know why. They said that they checked. Currently, there is not solution for the project. We have to do the technical expertise for design. We should have clarity with the land, otherwise, the investor will not come. We will find the solution, we do not know which, but maybe another land".

In turn, mayor’s office Orhei replied to the association  that the land would not be alienated and would propose to the council approval of a public-private partnership. Also, the administration of Orhei mayor’s office, at the request of CIJM, said that the subject was not proposed on the agenda of the Town Council, because  of several violations. "Moreover,  as these lands represent a strategic object for the city and its residents, the  mayor’s office will examine in details this issue so as it does not have a bad impact on the town and its residents",  reads the reply from Orhei mayor’s office.

The investigation was accomplished under the Campaign „Public Money Is My Money Too”, carried out by the Centre for Investigative Journalism (CIJM) and the Association for Efficient and Responsible Governance (AGER), within a project funded by the European Union and the National Endowment for Democracy.  

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