Public-private partnerships (PPPs) were one of the sources of violations in public investment in Moldova; more stringent sanctions for violations of the law in this area need to be introduced - the IMF
This was stated by International Monetary Fund experts in their report on the assessment of public administration in our country. They noted that approximately the annual investments made through PPPs amount to several hundred million lei. Most of the investments are related to the Chisinau airport project, in which about 1.5 billion lei have been invested since 2014. According to IMF experts, few PPPs in Moldova require payments from the budget, as they are usually financed through tariffs. High levels of violations were identified in the three largest PPP projects at both the central and local levels. These violations rather indicate the possibility that the private partner is hiding tariff revenues and embezzling state assets, which leads to a loss of budget revenues. IMF experts gave examples of specific violations in PPPs. In particular, they pointed to the project of the Chisinau airport (planned investments: 5 billion lei). According to the audit report, the private partner was selected through an uncompetitive procurement process. The tender was conducted by invitation only, which excluded the participation of large international competitors, such as, for example, Turkish TAV. The Association of Russian Companies was selected from one applicant because the other applicant was disqualified. According to the experts of the Fund, this association collects expensive airport taxes without the approval of the tariff maker (Civil Aviation Authority) and provided other persons with interest-free loans totaling 1.7 billion lei, which exceeded its investments. Law enforcement agencies have opened a criminal case on money laundering. The association also refused to inspect its work, not allowing the size and quality of its investments to be verified. At the same time, another problematic PPP project provides for the concession and modernization of bus stations and motor-coach terminals (planned investments: 200 million lei). According to the auditor's report, the project selection process was not transparent. It seems that the feasibility study was prepared by the state-owned enterprise Gările și Stațiile Auto itself. The Public Property Agency asked the Financial Supervision Authority to check the unclear cost structure of the state-owned enterprise, but the feasibility study was approved by the agency 5 days before the completion of the financial audit. An association of the two companies was selected as part of the tender. After the contract was awarded, one company withdrew from the association without the approval of the Supervisory Committee and the investment was postponed. Another problematic PPP project, according to the IMF experts, is the project of a solid waste processing plant in Balti municipality (planned investments: 464 million lei). Although no external audits have been conducted yet, the IMF mission was informed of irregularities in project selection, procurement and implementation. The municipality refused the Public Property Agency to participate in the selection committee. It is alleged that a Romanian company was selected, despite the fact that there was another bidder offering better terms. The Supreme Court of Justice canceled the concession, but in the same year the municipality re-selected the same company for the same project. The municipality again refused the Public Property Agency to participate in the selection committee, which never provided information, in violation of the law. Ultimately, the project was terminated without any investment. According to IMF experts, in order to prevent violations, it is necessary to eliminate shortcomings in the PPP legal framework. // 27.07.2021 – InfoMarket
