Montenegro: Power utility company EPCG spends millions on A2A advices without tenders, minority shareholders claim its money extractions

28. August 2013. / SEE Energy News

Government’s strategic partner in Power Utility Company charges special services, even though already manages with that company. Montenegro Power Utility Company EPCG spent 4.56 MEUR for counseling and legal services during 2010, 5.45 MEUR in 2011, and last year 4.29 MEUR of which at least 7.5 MEUR was paid without tender to the co-owner company A2A who also manages with the EPCG.

The facts from the financial statements of the EPCG business published on the website of the Securities Commission (KHOV) and the report of the June shareholders general meeting approve this.

According to the available data, which were discussed at the general meeting of EPCG shareholders, from total of 14.3 MEUR, A2A charged the largest invoice for consulting services, which manages with the EPCG management by the end of 2009.  and it is the second largest shareholder with a 43.7 percent of shares.

In the notes from the reviser’s report for 2012. it is stated that the EPCG obligations to the A2A related legal person amount 5.05 MEUR for 2012.and 2.53 MEUR  for 2011. Other years are not mentioned.

The A2A charged service from the EPCG without previous tender, which the authorized representative of that company confirmed to the shareholders at the general meeting on 16th June.

“EPCG paid millions to the company A2A without tender for consulting and legal services besides dozens of employed lawyers. What material for the state prosecutor, if we had it”, says for the “Vijesti”, Vasilije Milickovic, the president of the Association of EPCG Minority Shareholders.

He believes that the only motive for these transactions is “money extraction” from EPCG

“Apart the ministers, all government couriers were saying some time ago that through the capitalization, carried out in 2009, would come to the partners who, besides money, would bought to EPCG new knowledge, technology, experience, administration management, therefore, all of the latest knowledge from that sector. And what were they doing? They came with the management and the people who produce millions of losses annually and also brought some company to facture consulting services and knowledge to EPCG. Why did not employ these people in the EPCG management “Milickovic asks.

Instead that Montenegro sues A2A for failing in new technology introduction in EPCG, that there is no new knowledge and investment, as notes Milickovic, from Italy threaten now by lawsuits.

“The results of EPCG management are devastating because all was in their hands. Why the state representatives in the EPCG Board should be asked what they think about the management results during all these past years,” concluded Milickovic.

Responding to the question of minority shareholders representatives, executive director Enrico Malerba, and EPCG representatives Vojka Calasan and Milos Komnenic, A2A authorized representative from the law office of Vanja Mugosa, announced, according as it is written in the record from the shareholders general meeting, “that for the consultancy services from A2A,according  to the statement of the Public procurements Commission and the provisions of the current Law on public procurements, does not call for tender. ”

However, the Commission for Public supplies control could not give such notification or permission during the last year, as from 1st January 2012. new law became effect according which such approval may be obtained from the Public Procurement Office, whose director is Mersad Mujevic.

Mujevic confirmed for “Vijesti” that in 2010. and 2012, concerning EPCG, Public Procurements Office did  not give any approval for consulting services.

According to him, the three EPCG approvals were granted during 2011, of total estimated value of 540,000 EUR, including VAT and this procurement was related to study and scenario drafting, which would provide the coal mine and thermal power plant Pljevlja connection.

According to data from the Tax Administration Registry, Emilio Maiandi is executive director of A2A Montenegro, Renato Ravanelli is the Board President and the Board members are Mary Esther Benign and Mauro Miglio.

The approval and decision publication is required

According to the current law, the client can call on provision for consulting services bids directly to providers, without tender, if that consulting service can provide a limited number of bidders.

This rule also is applied when the time and cost necessary for evaluation of a large number of bids would not be proportionate to the service value which is the subject of purchase, on condition that the call is sent to at least three bidders in order to ensure competition.

According Mujevic, the approval request should be submitted to the management in writing form and if approved, the client would be committed “to announce decision that he chose the most convenient bidder with whom it intends to conclude a contract” on the website of the Public Procurement Management.

“In addition, the legal deadline of 10 days from the date of decision publication it was  left to the bidders for appeal to the client, if they believe that they also can complete  the given public procurement, and not just as the selected bidder, and thus to stop the procurement process, until the final decision would be made” said Mujevic.

If there is no appeal, after the deadline of 10 days, the client can conclude a contract, regardless of the actual justification of the negotiation process and the choice of a certain bidder.

In EPCG and the Commission on the vacation

“Vijesti” contacted EPCG and the Commission for Public Procurement Control, but it was not possible to get the answer because the authorities are on the vacation. “Vijesti” would like to ask the Commission whether or not in 2010. or 2011, that institution gave the notifications  or approvals to the Power Utility Company for the procurements of the consulting and legal Services of several million value ​​and without tender from the related A2A legal person.

It was answered that the members of this institution and its president Suzana Pribilovic are on the vacation until Thursday, when they should re-sit.

AF: The A2A, Italian partner, registered in Montenegro the company A2A Montenegro even at the end of November 2009, which activity is “consulting activities related to the business and other management”.

According to data from the Tax Administration Registry, Emilio Maiandi is executive director of A2A Montenegro, Renato Ravanelli is the Board President and the Board members are Mary Esther Benign and Mauro Miglio.

Source; Serbia Energy See desk/Vijesti

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