LATVIA – CONSTRUCTION
The construction cartel case is one of the biggest scandals of recent times. According to the materials of the Competition Council, 10 major Latvian construction companies have allegedly been coordinating their activities for several years and agreeing on market distribution and conditions of participation in public and private procurements all over Latvia. Including in projects involving EU funds. For this reason, Latvia may face a larger fine from the European Commission (EC) than previously predicted.
As Rus.LSM.lv notes, the existence of the cartel itself has not yet been legally proven. Eight of the 10 alleged collusive parties have challenged the Competition Council’s decision and the next court hearing will take place in January. If the court finds the existence of a cartel there will be financial consequences. However, the fine will not amount to 600 million euros, the Central Finance and Contracts Agency (CFCA) explains. It is responsible for the Eurofund money in Latvia.
According to CFCA deputy director Gundega Šulca, the agency has suspended payments in active projects and informed the EC of the amount. She stressed that the amount has already been spent and cannot be returned to the budget. The amount in question is 18 million and 900 thousand euros.
This means that state and municipal construction projects, which have been partially financed from the EU funds, will have to be completed at their own expense. The same amount includes adjustments in the already built projects. Thus, the funds already received from the EC will be recovered, says Šulca.
«In our opinion, there is absolutely no reason to talk about 600 million euro losses. This amount could only appear if we add together the costs of all the purchases that were made in the so-called cartel. There are around 70 of them in total. But only 25 of them were made with the help of European funds,» explains Šulca.
The agency says that Latvia’s losses could exceed the said amount of nearly 19 million euros if the fact of collusion between the construction client and the cartel participants is proved. However, the case in which this could have been established fell apart due to lack of evidence. It was handled by the Corruption Prevention and Combating Bureau.
Data source: delfi.lv