AIRLINE SELECTION ON LINES OF PUBLIC INTEREST (2019)
The public procurement in question is an obvious example of favoring a certain bidder and violating the competition principle. The contracting authority has made it very difficult for all other air carriers to participate by including additional conditions for participation in the “tailor-made” procedure that suited the national airline and the almost minimum legal deadline for submission of bids.
We should especially mention the discriminatory additional condition related to the technical capacity: in addition to the basic aircraft (which may not be older than 20 years or have less than 125 passenger seats), the bidders were required to have 1 spare aircraft positioned in Serbia with the same characteristics. We also have to mention an additional condition related to the staff capacity: among other things, it stated that all staff (except the pilot) must speak Serbian and pass a security check of the Ministry of Interior of the Republic of Serbia, in accordance with the Law on Air Traffic. With these two conditions, along with some other requirements (in terms of employment, etc.), the client also favored a Serbia-based airline.
This is also confirmed by the following fact: despite the large estimated value (around 15 million euros), the only bidder that participated in the public procurement procedure in question was “Air Serbia” Ltd. Belgrade, whose offer was chosen as the most favorable in the absence of any competition.
We are particularly concerned with the fact that in this case the state obviously abused the public procurement procedure in order to award subsidies to “Air Serbia” once more, despite the fact that the Strategic Partnership Agreement with “Etihad Airways” obliged it to stop with the non-repayable investments in the national airline from 2016 onwards.
Such abuse of public procurement, but also some other cases in which the state “avoided” to apply the Law on Public Procurement (Moravian Corridor, construction of wastewater treatment plant in Belgrade), are an actual indicator of the state’s attitude towards one of the most important anti-corruption laws. They show that the state applies this important law selectively, when and how it sees fit, which is unacceptable and extremely dangerous. This is confirmed by the recent adoption of the Law on Special Procedures for the Implementation of Projects for Construction and Reconstruction of Line Infrastructure Facilities of Special Importance to the Republic of Serbia. This law gives the Government the authority that in the future, in the case of large infrastructure projects, it may decide not to apply the Law on Public Procurement to the entire project or its individual phases and activities, but to apply a special procedure (regulated by that law) for the selection of a strategic partner.
When it comes to public procurement, another indicator of the state’s voluntarism is its attitude towards civic control of the public procurement procedures of great value.
Namely, the previous Law on Public Procurement provided for mandatory civil supervision of public procurement with an estimated value of over 1 billion dinars. The Public Procurement Office appointed a civil supervisor from among prominent experts in the public procurement field; also, an association dealing with public procurement, prevention of corruption or conflicts of interest could also be appointed as a supervisor. The civil supervisor was not entitled to compensation for his work. The civil supervisor was obliged to submit a report on the conducted supervision to the competent committee of the National Assembly and the Public Procurement Office within 20 days from the conclusion of the contract, and in case of doubt in the legality of the procedure, he was supposed to inform the competent authorities and the general public.
In the public procurement procedure in question, the contracting authority responded to the accusations of rigging the tender, claiming that the procedure was conducted in accordance with the law, and as one of the arguments in support of that, it pointed out the fact that a civil supervisor was appointed. Who was appointed as the civil supervisor, however, has not been announced to date, nor has the decision on his appointment been announced. Also, the report on the implementation of the procedure in question was not published on the website of the Public Procurement Office. For all of the stated, there is more than a justified suspicion that in this specific case the civil supervisor was not actually appointed, i.e. that the obligatory supervision of the civil sector over the procedure in question was avoided, which further calls into question its regularity.
However, the above should not be surprising, considering that the state has been trying to make civil supervisor’s role meaningless throughout the whole application of this institute. The Center for Investigative Journalism of Serbia (CINS) also wrote about it, recalling, among other things, the 2015 example: during the session of the competent parliamentary committee, civil supervisor Dragan Dobrašinović was “removed” while presenting his report on the first phase of reconstruction of the railway station “Prokop”. While he was explaining the ways in which the contracting authority violated the Public Procurement Law, his microphone was turned off and the security was called. The illegal actions of the contracting authority in the case of “Prokop” were later confirmed by the Administrative Court, but the contract in the amount of about 26 million euros was signed, and the station was put into operation. The message of the state in this and similar examples was very clear, which was shown by the omission of independent civil control of public procurement from the new Law, in use from July 1, 2020.