Serious Suspicions about Manipulated KESh Tenders

KESh, the Albanian Power Corporation, is once again involved in a dubious procurement procedure.

During May and June, it invited an open tender to clean the area in front of the metallic grills on one of the four turbines in Fierza hydropower plant. The cleaning is necessary to allow free passage of water through the turbines; the flow of the water is hindered from the accumulation of solid debris.

The maximum amount provided by KESh was 328 million lek (~€2.5 million). Six companies participated in the tender, four of them handed in complete applications. KESh disqualified three of the companies, while keeping one, Viante Konstruksion, which was automatically declared the winner.

Exit spoke with one of the disqualified companies that was deemed to lack experience in water and underground water cleaning. The winner of the tender has no experience in this type of cleaning either, meaning that KESh has used double standards for evaluation. As a result, there are suspicions about violations of the tender legislation and corruption.

What makes the procedure more dubious is the high cost of the project, which is predetermined by KESh.

The investment plan for cleaning the area in front of the grill of the 4th tubrine of Fierza Hydropower plant has been expected since 2014. The reason this investment was not completed during this year remains unknown. The investment was planned in 2015 and 2016, but to no avail. It was once again planned in 2017 and as was described above, the tender procedures for selecting the company which will implement this investment have been completed.

Without an explanation, the amount of investment has been increasing over the last year, despite the fact that the volume and the type of work is the same. In 2015, KESh had allocated  40 million lekë for cleaning work expenses. In 2016, without providing any explanation, KESh increased the planned budget for the same work at 300 million lekë, as much as eight times higher than the previous year. In 2016, the amount was increased to over 328 million lekë.

The final allocated amount is exaggerated given the volume and the cost of the work. Based on some calculations conducted by experts, who were contacted by Exit, the cost allocated by KESh is at least twice as high as the market value for similar work.

At least two water cleaning cranes can be purchased with these funds, so KESH could do its yearly water cleaning at a much lower cost than outsourcing it to another company. This solution, purchasing the cleaning cranes, had been once proposed for Koman hydro power plant by the board of KESh, but was abandoned.

This suspicious procedure followed for the cleaning of the lake of Fierza Hydropower Plant is in fact an repetition of the same procedures followed previously for the same work for Koman HPP.

To clean the area in front of the Koman HPP turbines, the KESh directors followed the same approach, procrastinating the project for several years, unjustifiably increasing the labor costs from one year to the next. When in July–August 2016 they opened procedures for choosing contractors to do the work, they again disqualified all competitiors from the game expect for one, and automatically declared a winner the only competitor left.

Even in the case of Koman HPP the winner was the same: Viante Konstruksion.

The fund for labor expenses in Koman case increased from €0.4 million in 2011 to more than €1.3 million in 2016.

A number of administrative and public complaints have been filed against this tender, and the media has also condemned it. Argon Hetoja, KESh’s director-general was publicly accused for manipulating the procedures by the German company Muhr GmbH a global leader on production of water construction machinery and water construction labor. Muhr and its local partner Albaxeni shpk sent a letter to Prime Minister Rama accusing Hetoja of KESh for procrastinating and manipulating the tender procedures, claiming that the winner was predetermined.

The prime minster promised he would organize an auditing group to verify the claims, but has not followed up. However, the accusations against Hetoja now are more relevant than ever.