ECONOMY

How to reform public contracts?

Giorgos Souflias, 63, the new environment, physical planning and public works minister, must deal with an urgent problem: the completion of certain infrastructure projects related to the Athens Olympics, chief of which is the stalled reconstruction of the marathon route. Beyond this, Souflias will have to implement New Democracy’s promised reforms in the way public contracts are awarded. The area, full of charges of government collusion with certain contractors and of «fixing» tenders, was one in which New Democracy, in opposition, excelled at portraying the previous government as beholden to certain business interests. Certain contractors – most notably Michaniki, which, however, received its share of public projects – view the change of government as a godsend, an opportunity to take revenge on their rivals, mainly the Hellenic Technodomiki-TEV-Aktor group. Souflias will have the difficult task of avoiding any appearances of merely switching favorites. At the heart of the problem is the method by which public projects are awarded, a mathematical formula which major contractors found they could too easily manipulate to their advantage. The European Union had asked the previous government to change the awarding method. The alternative, however – awarding the project to the lowest bidder – is full of pitfalls and can be manipulated just as easily. Souflias’s deputy ministers are 43-year-old Stavros Kaloyiannis and 68-year-old Themistoklis Xanthopoulos, a professor and former head of the Public Power Corporation. All three are engineers by profession, not a good sign for the ministry’s «environment» part.