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Demaclenko Complains About Alleged Corruption In The Tender Announced On Snowmaking Systems In Bakuriani

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Natia Taktakishvili
25.05.22 16:00
970
The Georgian government plans to install new snowmaking systems in Bakuriani. The project is being implemented by the Georgian Mountain Tracking Agency (MTA), subordinated to the Ministry of Economy and Sustainable Development. The Agency has announced a tender of 137.8 million on the acquisition of snowmaking system.

According to MTA, the winner of the tender is Technoalpin and the Agency will sign a contract worth GEL 99.9 million. The Point is that International Company Demaclenko has been ready to give the same service for almost 8 million GEL cheaper, which failed in the tender due to the unknown reasons, despite the unequivocal price advantage.

Demaclenko's director Andreas Lambacher held a press conference at the Holiday Inn Hotel, where he said there was a clear case of breach of international bidding conditions that raises suspicions of an alleged corruption deal.

Demaclenko's claim includes three main problematic issues: the first is related to the tender price of GEL 137.8 million. It should be noted that the companies participating in the competition presented their prices on the principle of a sealed envelope, initially the price nominated by Technoalpin was about 137.8 million GEL, while the price nominated by Demaclenko - 91.9 million. Despite the 46-million-dollar difference, Demaclenko was not declared the winner of the tender, and the selection procedure continued. It should be noted that the price offered by Technoalpin exactly coincided with the price set by MTA. According to the representative of Demaclenko, it raises the suspicion that a certain agreement had already been reached in advance between the parties, which in turn limits fair competition.

The second problem is related to the non-transparent procedure after the completion of the bidding process. According to Andreac Lambacher, CEO of Demaclenko, Technoalpin changed the original bid price and made a new offer of USD 99.9 million after closed-door negotiations.

Asked by BMG whether Demaclenko had the right to use such an opportunity or whether the company had received a relevant notification about the event, Andres Lambacher replied that his company did not have the right to use such a privilege according to the international tender norms.

The third issue concerns the final decision of MTA. Despite the non-transparent pricing procedure, the bid ended with an 8-million advantage in favor of Demaclenko, although he was still not selected as the winner of the tender. According to Demaclenko's CEO, the MTA did not provide an explanation as to what criteria the company failed to meet and what became of the reason for his defeat in the competition. According to Lambacher, without any explanation, the state-owned company has successfully chosen the 8 million more expensive alternative, which is the amount that will have to be spent from the budget to implement this project.

"The public procurement procedure raises a lot of questions and all these points to an alleged corruption scheme. For example: How did the price proposed by the state and a competing company (Technoalpin) match exactly the same number (137.8 million)?

How and by what procedures was this amount further reduced (from 137.8 to 99.9) and, most importantly, why is the budget company gives an advantage more expensive company, when the Italian company (Demaclenko) can do the same job at a less price? Why should the state budget pay several millions GEL more in favor of another company in the same work?" - lawyer Kakha Kozhoridze declares.

Demaclenko has many years of experience operating both in the international market and in Georgia. The company has won several tenders since 2014, but when asked by BMG what has changed in 2022 and why is the company dissatisfied with the public procurement procedure, Lambacher replied that until now the procedure was transparent and in full compliance with international standards, leaving no suspicion of corrupt transactions or the basis of the complaint.

According to Demaclenko, the company has 40 years of experience in manufacturing and selling snowmaking systems and system components.

In addition, the company has repeatedly participated in installation of snowmaking systems in the International Ski Championship. The experience of installing snowmaking systems in the International Championship or Olympics was one of the important prerequisites for the companies participating in the MTA tender.

According to the director of the company, Demaclenko fully meets all the conditions of the tender and offers works by 8 million GEL cheaper.

The company plans to formally appeal the MTA decision and apply to the relevant structures with a request to launch an investigation into a possible corruption deal. The company does not rule out the possibility of applying for arbitration, Complaints will also be filed with the State Audit Office to prevent inefficient spending of budget funds and to identify deficiencies in the procurement process.