ECONOMY

Public project bidding still riddled with collusion on contractors’ part

The bids for the Volos diversion project in central Greece remained on the shelf in the Environment and Public Works ministry for 13 entire months, while some contractors expressed fears the contents might be tampered with. Finally, they were opened on December 24, confirming beyond doubt the collusion practices of the country’s major construction groups for allocating projects among them: With few exceptions, the 37 bids for the 36-million-euro project were grouped as having been written by five or six people. Using the now infamous «mathematical formula» – originally conceived by the ministry as a means of preventing underbidding which was reversed once a winner was declared in the past – the bidders collude to pre-determine the winner in each case and each submits slightly differing offers. The documents submitted for the Volos diversion show, for instance, that the bids by construction firms Proodeftiki and Mesohoritis Bros had the same handwriting, as was obviously the case with the bids by Aktor and ETETH, and by firms C.D. Constantinidis and Austria’s Strabag. The remaining approximately 30 bids were grouped as having been written by five or six people. It appears that these similarities escaped the attention of ministry officials, otherwise they would have annulled the tender according to law, which they are allowed to do upon mere suspicion of collusion among the contestants. The responsible committee of the Environment and Public Works Ministry conferred on December 31 and made a provisional recommendation that the Volos project be awarded to construction firm Terna, which had offered a discount of 22.7 percent. Other criteria, such as technical features, are used in the selection apart from the size of the discount. According to recent provisions, bidders who submit lower offers than the provisionally declared winner can be called upon to provide explanations. This is the case with 14 bidders in the Volos project tender. Construction industry sources point out that, curiously, the Technical Chamber of Greece (TEE), which is supposed to advise the government, has never expressed any opinion on the subject.