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Slovakia: Paying More Due to Corruption in the Area of State Tenders

One of the problems with corruption in Slovakia is when friends of pro-government parties are being thanked through over-financed public projects.

State officials tend to be very flexible in their interpretation of the law. For example, in 2007, when it was necessary to start a public competition for a 119.5 million euro project, they announced it only on a small noticeboard in the hallways of the Ministry of Development; the scandal became known as the Noticeboard Tender Scandal.

Just now comes the decision of the European court [sk] in the road toll system case, where the less expensive offer was rejected because of its “suspiciously low price” of 630 million euros; the offer of the tender's winner was about 800 million.

Not so uncommon were contracts covered by commercial secrecy laws, with subsequent unofficial adjustments that included higher prices.

That's why the outgoing government had introduced new, stricter rules. For example, any state-related contract becomes valid a few days after it is published in full online [sk]. (Alliance Fair Play and Transparency International Slovakia provide their own copies [sk] with automated analyzing and the possibility of citizen comments.)

In 2010, Global Voices wrote about a highway construction pricing controversy, when the Slovak minister of transport announced that the “extremely low prices charged by Chinese road-builders would not be accepted automatically in Slovakia.” Eventually, the price of the highway construction was lowered close to the European average – and even without the Chinese companies’ involvement.

But, as the recent story of overpriced Apple computers shows, the situation is still far from perfect.

Without investigating the real needs, the Slovak ministry of finance has recently been keen on quickly signing a new, more expensive licensing contract with Microsoft, which looked like it had been written by a private company. According to the ministry, avoiding discussion and public competition was necessary because of the alleged threat of economic damages (three months later, no damages have been reported yet). The signing of the contract has now been postponed [sk], due to public pressure, and the final decision is to be made once the new government is formed.

Now that SMER is back, it has already announced that highway construction prices would grow again. A friendly construction company mentioned [sk] an expected price growth of approximately 30 percent.

The idea of SMER's leader Robert Fico is to reject the cheapest and the most expensive offers. “Firms that often do not have employees win with unbeatably low prices, and then they do not pay subcontractors,” “a voice similar to Fico's” said in a newspaper interview [sk] just two days after the 2012 elections.

Below are some of the netizens’ reactions to the item linked to above.

lieu:

And why do you think that striking the lowest price out will solve the problem? [...] Rejecting one price will solve absolutely nothing, just puzzle everyone who joins the tender and will establish a lot of non-transparency there.

Jape:

Just do not eventually find out that the lowest bid was the only fair one and the others were bloated. And isn't not paying to subcontractors a crime? If it is not, then there is more work for lawmakers.

Chech:

If Fico insists on having the lowest price rejected, then simply the company owner who wants to build a house for 75,000 would own two companies that both have submitted a bid, one for 75,000 and the other for 74,000 euros. [...] Fico's proposal will only increase the bureaucracy, is easily avoidable and thus does not solve anything. But people who do not understand … will feel that Fico is doing something and is fighting for their “certainties.”

smrek:

it's awful drivel, also the dumping price for the highway is at least [50 percent] higher than is necessary – prices have to be compared in the context of Europe – divided by two :)

BTW:

Welcome to SK :)
Again it will be the same as with the toll system, all prices will be too low and the highest will win. … This is another certainty.

babs:

Failure to pay subcontractors should be fully addressed by completely other instruments than this one. For example, by fast judiciary and efficient law enforcement. Because even the subcontractor of the most expensive bid is not guaranteed to be paid by the main supplier.

Martinn:

This logic could be used elsewhere. E.g., from Parliament we should exclude the parties with the most and least mandates. It often happens that some party fools the voters by unrealistic promises, wins elections, but then fails to fulfill their promises.

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