53 million for Bechtel & Enka can still be negotiated

In each of five contracts, which according to this report are considered harmful to Kosovo, lack of professionalism, lack of transparency and misuse.

As far as the contract is concerned with “Bechtel & Enke”, the report has found the cost of the contract to be twice as high as the previous budget for it, that there have been violations of the procurement law and delays in implementing the contract and the need to delay the deadline.

Because the government has rejected this contract of 15 miles, at the end of last year that “Bechtel & Enka” has demanded 63 billion euros, after the negotiations this amount has dropped to 53 miles, but it is not known how this amount has reached”, said Alban Hashan, director of the Riinvest Institute.

The company “Bechtel & Enka” has demanded an additional 63m euros from the Kosovo government on behalf of penalties due to payments delayed by the Ministry of Infrastructure for completing the work on the Pristina highway é Khan of Elez.

The contract signed in July 2014 was worth 600m euros and the duration of 3 and a half years. But MI, he failed to fulfill financial obligations to “Bechtel & Enka” as signed by contract, and as a result, the works were not performed in the previous period.

Even though the preliminary government had reached the accord to pay 14.7m euros to extend the contract implementation deadline, the same agreement was not approved by the government.

The company “Bechtel & Enka” has made additional demands by increasing the value of claims to 63m euros for damage as a result of delaying the contract's implementation deadline. To avoid even a judicial dispute, the Kosovo government after negotiations has decided to pay 53m euros to the company.

“Shame divided for “Bechtel & Enke”, of 53m euros, is almost the total of the Ministry of Agriculture's budget for 2018 (60m euros). The agriculture sector contributes more than 10 percent to the Local Product”, says the report.

Deputy Minister of the Ministry of Infrastructure, Fehmi Mujota, has said that when a minister gets a contract from another minister, he must implement it.

Mujota also stressed that if it had been that minister, there would not have been a delay in paying “Bechtel & Enkas”.

If I were a minister and a mandate, the contract with “Bechtel & Enke” would have no defect, unless the government had postponed, had to review the budget for the implementation of large contracts, if I had been minister I would have given up on projects weighing less”, Mujota said.

Mujota has said former minister Zharku's advisers have not done the job as it should and that there has been no need to delay payment.

He has announced that the payment to “Bechtel & Enka” has not yet been executed and that it is possible to negotiate.

“The arrival of the new government in haste, even the current minister has taken hasty steps. No payments have yet happened, yet there are deadlines for negotiating. A full legal report will be prepared. I very much hope that arbitration can be averted. If there isn't a solution then there will be political consequences”, Mujota stressed.

According to the report conducted by the Riinvest Institute, lack of transparency has also characterised the negotiation process between the parties following arbitrage decisions in the case of Kosovo Telecom contract with Dardaphony.

The International Court of Arbitrazhi in London has ruled that KK must pay the company about 32m euros in damages, and is obliged to give 100 thousand additional numbers and 3G and 4G services.

But after a financial analysis, it has been found that after paying the KK fine, it would enter a deep financial crisis and then the parties are starting to negotiate a new deal with Dardaphony.

“Although according to the KK statements reached has been more favourable than the 30m-euro fine payment, citizens have never had the opportunity to see the terms of the” agreements said in the report.

According to the Kosovo Telecom debt report to Dardaphony of 32m euros is almost equal to the entire Pristina University budget of 33.8m euros for 2018, which has over 30,000 registered students.

After the negotiations, the agreement reveals that KK has ended up paying Dardaphon a total of 4.5m euros on behalf of compensation for the legal procedures spent on the Arbitrazhi Tributal.

Economic Development Minister Valdrin Luka has said that public enterprises have very big problems, and according to him there are contracts that are signed and that are harmful.

“We are making a task force with the best lawyers, which will do an analysis for Telekom for several contracts that have been signed and that is known that they cannot be implemented, which we are threatened to lead to arbitration”, Luka has said.

According to him, it is his duty to make a legal opinion on each of these contracts.

Luka has said that if there was greater professionalism in this regard, we would have been able to do much better, referring to representation at the Court of Arbitrazhi in the case against Dardaphon.

“The representation of Telekom in arbitration in the Dardaphon case has been very weak, the reasoning has been written on three pages A4”, Luka stressed.

Lack of professionalism, lack of transparency and misuse are also counted in the Interior Ministry's contract with Austrian state printery “Osterreeische Staatsdruckerei GmbH (OeSD).

In June 2011, the company in question was contracted for supplies with electronic passports and technological equipment to personalise Kosovo citizens' documents. The value of this contract was about 14m euros, with the duration of three years. But after less than a year and a half, as a result of some disputes through the parties, the unilateral MPB has severed the contract.

In February 2013, OeSD filed a lawsuit at the International Court of Arbitrazhi with the claim of not paying bills worth 1.4m euros and damages suffered due to the interruption of the contract.

In the end, GjNA has decided that the Kosovo government must pay 5.6m euros in damages.

The decision to cut the contract was taken without consulting in advance with field connoisseur, and as such was seen as hasty and unthinking”, the report noted.

In 2015, company dispute A has been processed CP Axos Capital GmbH against the Kosovo government. This problem had begun when the Kosovo government had initiated the privatisation process of Kosovo Telecom.

The Akos company had been declared the winner, and the same has been extended several times the deadline for the accorded payment. But shortly before the end of the additional deadline given by the Kosovo government, the Ministry of Economic Development, had withdrawn from the privatisation process in late 2013.

The Akos company has initiated the process at the International Centre for resolving Investment Disputes, which in May of this year published the decision in favour of the Kosovo government.

“against the positive result for the Kosovo government, even this process has been characterised with a total lack of transparency and accountability”, the report noted.

Economic Development Minister Valdrin Luka has said that in the case of Axos, Kosovo has had professional representation and has won the case.

The fifth case to be handled in this report concerns the failure of the Brezovica privatisation process in 2016. The bidding process had begun in January 2013, and the winner was announced in late November 2014. In April 2015, contracts had been signed with the winning consortium, but the contract did not go into effect on the day of signing after the 189-day transition phase began, during which the winning consortium had to meet the remaining contract conditions.

Even after the deadlines for meeting the conditions were extended, the winning consortium had failed to provide financial means for development of the first phase of the project. As a result, the Interministerial Steering Commission had declared the contract break, and the Brezovica project has been declared a failure.

This process of lack of transparency has also characterised offers, which have never been publicized. Out of the total four pre-qualified companies, only one consortium had submitted the bid despite the extension of the deadline for submitting bids.

“Despite the fact that only one bid was accepted, and despite the recommendation of experts and civil society in Kosovo to repeat the tender process, The KDNM had decided to continue with a single offer”, highlighted in the report conducted by the Riinvest Institute.

Kosovo Assembly MP Korab Sejdiu has said that if there are harmful contracts, the state should sue the official who has signed such a contract.

If the lawyer has lost the case the state must account for it, with a civil indictment. In the last government is being seen from an airplane that has no responsibility for public money”, Sejdiu stressed.

He also said the privacy clause should not be introduced into public contracts.