Transparency International in BiH (TIBiH) submitted a request for monitoring of the procurement process “Construction of public lighting in the city of Banja Luka according to the ESCO model” to the Public Procurement Agency, after it was noted that one of the members of the bidding group – the Belgrade firm “Aviator Group” – provided certificates for completed contracts for which publicly available data from Serbia indicate that they could not have been issued.
A contract worth 35 million KM was awarded to a group of bidders consisting of “Končar” d.d. Zagreb (the leading member of the bidding group), “Somborelektro” d.o.o. Sombor, “Aviator Group” d.o.o. Belgrade, and “Dema & S” d.o.o. Mostar, according to the tender documentation.
A detail that makes this procurement controversial is that the conceptual project and the feasibility study estimate the value of the works at around 13 million KM with a completion period of 6 months. Despite this, the City of Banja Luka in the public call provided for repayment in 180 monthly installments (15 years) in an amount exceeding 35 million KM.
However, the issue of the true nature of the contract and the legality of the procedure is further emphasized by the requirement for bidders to provide proof of technical capability, i.e., confirmation of the realization of several similar contracts such as the installation of LED lamps, possession of appropriate licenses, qualified personnel, and necessary equipment.
Within the offer of the bidding group that won the contract, “Aviator Group” submitted references issued by “Elgra Vision” d.o.o. Belgrade, for three jobs in Majdanpek, Niš, and Čačak. However, upon reviewing publicly available data on the Serbian public procurement portal, TI BiH determined that “Elgra Vision” could not have issued these certificates because it was a subcontractor or a member of a bidding group in these projects, which, according to the contract, was not allowed to subcontract.
In all three cases, this company was not the contract holder – which means that it did not carry out the projects independently, and therefore could not provide certificates of similar contract realization required in the tender for the construction of public lighting in Banja Luka.
Besides this, TI BiH also points out that the entire procedure, worth over 35 million KM, should have been conducted as a public-private partnership project, not as a classic public procurement of works.
The ESCO model, under which this procurement is conducted, stipulates that a private company finances and maintains energy efficiency measures and is clearly defined by the Law on Energy Efficiency of the Republic of Srpska as a form of public-private partnership. This form of cooperation requires a more complex procedure and the involvement of several competent bodies, such as the opinions of the Ministry of Finance of RS, the competent line ministry, and the City Assembly.
By conducting this business through a public procurement procedure, rather than as a PPP, the city administration of the City of Banja Luka retained complete control over the process of defining tender conditions, selecting the most favorable bidder, and evaluating the realization of this project.
Due to all this, TI BiH requested the Public Procurement Agency of BiH to conduct monitoring of the procedure and check whether the provisions of the Public Procurement Law of BiH were violated, and from the competent ministries an assessment of whether this case actually involves a public-private partnership project that is exempt from the public procurement system.
