Public procurement

Schools in Taraclia, obliged to allocate one million lei for equipment they don’t need

Gimnaziul
Author: Natalia Porubin, Anghelina Gaidarji
06/01/2016 7208

Taraclia Rayon Council has allocated about one million lei for useless equipment - heat generators for the sports halls of the Rayon gymnasiums and lyceums. At the same time, the school managers say the money had to be spent on works which are more necessary, the councilors state that they have thought about the pupils’ health. The “deal” has been made without resorting to public procurement, being promoted by the former head of Rayon and unanimously voted by the Rayon councilors.

The money for the heating sources has been used from the so-called Rayon component for education, a joint school fund for which each institution allots up to 5 % from its own budget (since 2015 the coefficient has been reduced to 3 %). In 2014, the schools from Taraclia accumulated over 3 million lei in this fund, the money which had to be used for costly projects the institution is unable to finance from its own resources. Nearly a third of this money has been spent in vain, instead of being used to fully repair the leaking roofs or to purchase modern equipment.  

One million lei -”granted” with no public procurement

The decision on using the Rayon component to install the generators in the sports halls was approved on 7 February 2014, the schools having been allocated about 1 mil. lei in total for this purpose.  Each school received per 60 thousand lei, from which per two heating sources had to be purchased and installed. 

The Theoretical Lyceum”I. Vazov” from Taraclia is the only institution which organized a tender to buy the equipment, by request for quotation. The tender announced at the Lyceum ”I. Vazov” was won by ”Liaicul” LLC company which purchased and installed generators in other schools too.

In all the other cases, the procurement was carried out based on small value contracts, even though the amount exceeded the limit for organizing such kind of procurement provided for in the law. The Regulation on low-value public procurement stipulates that this form of procurement may be applied based on annual or quarterly plans or for emergency reasons”as a result of some unplanned needs or unforeseeable events”. The procurement in Taraclia, however, meets none of these conditions- it has not been planned ahead nor was it a stringent need for the school. Moreover, in line with the quoted regulation, if at the moment the low-value public procurement contract is signed the estimated value unforeseeably exceeds the amount of 40000 lei, no VAT included, for goods and services and 50000 lei for works, the contracting authority shall waive this contract and shall apply one of the public procurement strategies set forth by the legislation in this field.  

Where did the money go to?

Almost in all the cases, the installations have been provided and installed by two firms - ”Dilat –construct” and ”Liaicul”, LLCs which are located in Taraclia, which in line with the data from the State Registration Chamber (SRC) have the same manager - Dmitri Tulus.

The information from the SRC has also shown that ”Liaicul” is a firm, specialized in retail sales, especially of food, beverages and tobacco products, cosmetics and perfumery products, constructions and engineering. The second firm,”Dilat-Construct”, is specialized in constructions (or) engineering, installations, plumbing, retail sales of cleaning products, wallpapers and flooring. The information obtained from the Public Procurement Agency has shown that during the last years ”Liaicul” has concluded many procurement contracts both with the Rayon Division for Education, Youth and Sports of Taraclia and with different educational institutions in Taraclia Rayon. At the same time, ”Dilat-Construct” has won contracts amounting to hundreds of thousand lei to make repairs in the Rayon schools.

Moreover, ”Dilat-Construct” company is located in the immediate vicinity of the „Grand-Garanovschi” trading company, a winery which belonged to the ex-head of Taraclia Rayon, Alexandru Garanovschi. 

”Grand-Garanovschi” went bankrupt in the middle of 2013 having a debt of about 40 milion lei, in line with the weekly newspaper ”Logos-press”.   

”Not recommended for habitable rooms”

We have called the ”Liaicul” firm, trying to purchase a heat generator similar to those installed in schools, claiming we want to install it in a dwelling. The sales assistant told us that there are no such installations for sale and that they may be purchased only upon a prior order, suggesting us to call the company manager. To our surprise, the latter told us that the generators may not be installed in habitable rooms.   

At the same time, on a number of sites, specialized in selling this type of equipment, we have found a range of offers, for the price that did not exceed 8 thousand lei, which is a lot less than the amount paid by the schools in Taraclia.

The schools would have liked to use the money for other purposes

Installed generator in the sport roon of gymnasium "Hristo Botev" in the village
Valea Perjei. Photo: CIJM

While the Rayon councilors have reasoned their decision by the care they display towards the children, the school directors say they don’t need such installations.  Therefore, in many cases the generators have not been used yet. This is the case with the Theoretical Lyceum ”Hristo Botev” from Valea Perjei village, one of the biggest institutions in the Rayon, which is attended by over 400 pupils. Those two heat generators installed, on the insistence of the Rayon council, haven’t been used and serve for nothing but collecting dust.  The director of the institution, Ecaterina Petrova, says there has been no need for such installations due to the fact that the institution has recently benefited from a project in energy efficiency.   

”I have been against the installation of these generators as they are not efficient. In order to function, the water inside the heating system has to reach the temperature of 65-70 degrees. This is unrealistic. We have been told, however, that we are obliged to take them”, the director from Valea Perjei has said.

The school directors’ opinion is also shared by one of the Rayon councilors, Dora Dimitrieva, who says one could have expected the generators to be useless for the schools.   

”I have been called by a number of directors who were saying it would be more efficient to use the money to repair the roofs of the schools. It happened as we had foreseen in the beginning –the generators are hardly ever used”, Dora Dimitrieva has stated. Moreover, the councilor urges that no one has carried out an expertise of the equipment to check if it can be used in the rooms designed for children.

”The installations emanate some kind of steam and, because of this, they are prohibited to be used in the institutions attended by children”, Dora Dimitrieva considers.

In her turn, the mayor of Vinogradovca village, Tatiana Turcanu states that there is one more important aspect which has not been taken into consideration: the expenses related to electricity and gas consumption. ”None has done any calculation to see if the schools could or could not cover these expenses”, the mayor has said.

According to Tatiana Turcanu, many schools have central heating, thus, under these circumstances the generators were not needed. ”Some years ago we replaced the whole heating system; we have new equipment in the boiler houses, boilers, etc. It is warm in the sports halls without generators- 19-20 degrees, which means that the money has been spent in vain and this happened when some schools have leaking roofs and are damp”, the mayor from Vinogradovca village has said. 

They have defied the law

The experts in the field of public procurement legislation state that this case is a flagrant defiance of the legal norms, in the decision-making as well as in issues related to the procurement as it is.

According to Olesea Stamati, the president of the Association for Efficient and Responsible Governance, an NGO which is monitoring the public procurement carried out by a number of contracting authorities in the country, the system is functioning deficiently.

”Whenever there is a need to "promote" or "sell" a certain product or service, all the possible methods are applied, the public money being used shamelessly, absolutely irresponsibly”, the expert has mentioned.

The contracts amounting to 50000 lei (no VAT included), for goods and services, are to be concluded based on public procurement procedures, by request for quotation (RFQ), or by request for quotation without publishing the announcement (RFQW). The Government Decision No. 245 as of 04.03.2008 for approving the Regulations on procurement of goods and services by request for quotation stipulates that for procuring goods and services for an amount which exceeds 50000 lei (no VAT included), an announcement is to be placed in the Public Procurement Bulletin. ”Any of the procedures applied in line with the law – RFQ or RFQW, would have required the contracting authority to register the contract with the Public Procurement Agency. The RFQ procedure, as compared to the RFQW implies a higher degree of transparency and an eventually more active participation of the interested economic agents, not to mention the possibility for mass-media and the civil society to intervene immediately rather than post factum”, Olesea Stamati has stated. 

According to the expert, the presence of such practices is even more dangerous in the context of the amendment of the Law on public procurement regarding the ceiling for the application of the law. Thereby, if up till now any contracts exceeding the amount of 40000 lei for goods and services and over 50000 lei for works, were subject to public procurement procedures, since 1 May 2016 this ceiling shall be increased to 80000 lei and 100000 lei respectively. It should be mentioned that the ceiling has been changed on the insistence of contracting authorities, including those at the local level.

This investigation has been conducted within the Campaign "Public Money is My Money too" carried out by the Center for Investigative Journalism (CIJM) and the Association for Efficient and Responsible Governance (AGER), under a project financed by the European Union and the National Endowment for Democracy. 

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