Lucrative contract for ETHEL buses results in war between bidding firms

A silent war has broken out over the tender for the supply of 600 buses for the Athens public bus company (ETHEL), which would renew its fleet and enable it to meet the needs of the Olympic Games. The new buses have been budgeted at 149,060,924 euros (50.7 billion drachmas). Besides the legitimate competition between the companies that have expressed interest, there has been a flurry of activity behind the scenes. Judicial decisions are pending that call into question the legality of the procedure for assigning the bid. The favorite is an Italian company, which is not only struggling to survive but whose name has become embroiled in a state fraud case in Italy. Nevertheless, ETHEL’s evaluation committee looked on the firm, Bredamenarini, with a favorable eye. The committee evaluates the technical specifications of the interested companies. Should the competition founder, there is a danger that Athens might remain without new city buses in 2004, the year of the Games, despite the authorities’ vow to replace 400 old buses and add another 200 brand-new ones. The competition On July 1, 2002, Athens’s bus company opened the competition for the supply of 600 buses, of four different types, to renew its fleet. These include 100 diesel-powered articulated buses; 280 conventional 12-meter-long buses, also diesel-powered; 100 diesel-powered minibuses and 120 gas-powered buses of normal length. Eight large manufacturing companies in the sector expressed interest and rushed to submit their bids. After several meetings, ETHEL’s evaluation committee announced the results of its technical assessment on April 22, 2003. These were then sent to the Transport Ministry’s cross-party committee, which gave a final assessment of the companies’ bids. The Italian company, Bredamenarini, which had never before supplied the Greek State, came in first to fourth – out of a total of eight firms – for the four types of buses sought by ETHEL. With an average of 105 marks for each bus type, it leapfrogged over companies with a golden reputation in the international market, such as Irisbus, EvoBus and Volvo. Irked by the result, the other companies declared war, with most of them attacking Bredamenarini, as many companies that had collaborated with ETHEL in the past found themselves out of the running. The cross-party committee accepted the firms’ objections and excluded the Italian company – over number plate size. This insubstantial reason means there is the likely possibility of the company being vindicated in court and returning to the competition. Bredamenarini belongs to the Finmeccanica Italian group of companies, together with AnsaldoBreda, the manufacturer of rolling stock for the Athens tram. However, the firm has a dubious past in similar competitions in Italy. In June 1999, according to the newspaper Repubblica (June 9), four of the firm’s board members were arrested for defrauding the Italian State, breach of confidentiality and meddling in a public auction. According to the Italian press, the charges were pressed over two open competitions declared by the Naples city authorities for the supply of 200 and 90 public transport vehicles. In any case, the company has shrunk in recent years, and thus its purchase by Finmeccanica was deemed necessary to avoid bankruptcy. While the sale temporarily solved the economic problems of the company, operational and corporate difficulties increased. To overcome them, the firm proceeded to lay off 230 workers and shut down production units. The ETHEL evaluation committee never proposed a visit to the firm’s factories. Yet since this was the first time it was collaborating with Bredamenarini, this should have been a necessary step. This all came to the attention of the cross-party committee overseeing the conduct of the competition. One of its members, in the dissenting minority, queried the choice in a written memorandum to the evaluation committee: «If tomorrow, and after approval of the bid,» he wondered, «it is ascertained that the factory of the firm that emerges as the lowest bidder in the competition is not as described in the offer it submitted, then what happens?» Flurry of court cases It is worth noting that the committee, though lenient over the serious survival problems of the Italian Bredamenarini, was exceptionally strict with other manufacturing groups, such as Volvo, which was ruled out because it offered air conditioning with 104.100 BTU and not the 105.000 BTU asked for by the announcement. This was regarded as a substantial deviation from the terms of the competition. EvoBus Hellas – which represents Mercedes Benz for articulated buses and gas-powered vehicles – was also excluded, for not meeting specifications. EvoBus went to court and demanded an injunction, which was granted. But this was not taken into account by the cross-party committee or ETHEL. The inter-party committee, instead of re-evaluating the company in accordance with the Piraeus Court of First Instance’s decision, rejected it as a candidate for building the last type of bus, for which it had earned top marks from the evaluation committee. EvoBus went to court again and got the competition suspended. The one-member Piraeus Court of First Instance ruled against opening the financial bidding and demanded that procedures for assigning the contract be halted. A judicial decision is pending. The members of the cross-party committee were not persuaded that Bredamenarini could be relied on, deeming that «the Italian company will not be able to meet its obligations,» while they felt the evaluation committee had not substantiated its grading of the interested companies. Since judicial decisions are pending, it is questionable whether the committee and ETHEL can proceed to open the financial bids, through which the lowest bidder will emerge. Th emanaging director of ETHEL, Constantinos Kokkoris, told Kathimerini that «ETHEL has no responsibility for the competition, the inter-party committee does. ETHEL’s work stops at the evaluation of companies. This means that if the cross-party committee decides to open the financial bidding, even if court decisions are pending, it will do it. For ETHEL, this decision is absolutely executive.» The whole story looks likely to cost Athenians dear, as there is a clear and present danger of the buses not being ready in time for the Olympic Games. If so, the troubles for both residents and visitors during summer 2004 look set to multiply.