Dubious formula

It is common knowledge that the so-called «mathematical formula,» used in awarding public works contracts, is a mechanism conjured up by constructors in a bid to exercise a monopoly over public projects. There is evidence that this specific method has been identified with suspect dealings and resulted in the fixing of bidding processes. It is known to the construction sector, and confirmed by repeated news stories, that the same hand would write the bids of the various companies taking part in the shady dealings. It is also known where they met and who the high priest – that is the man who decided who got what – was. The above group made sure to neutralize anyone who could affect the outcome of the secret deals. It would disclaim any challenge to the mathematical formula by a lower bidder, demanding that the firm justified its better offer. The mathematical formula has been in force since 1998. Trillions of drachmas’ or billions of euros’ worth of projects were assigned on the basis of that procedure. A modest estimate puts the excess cost resulting from the application of the mathematical formula at 1 trillion drachmas. It is worth noting that the constructors who mostly benefited from the formula also happen to hold stakes in media companies. In other words, they wield considerable political power – a sign of political and business entanglement. During its tenure in opposition, the conservative party was keen to attack former Prime Minister Costas Simitis about conflicting interests and corruption in the construction sector. It would not be an exaggeration to say that in the last general vote, the public in fact punished PASOK for having fostered a climate of sleaze and corruption. Now, the Planning and Public Works Ministry appears to have been caught up in a legalistic and procedural web and – perhaps also because of erroneous recommendations – it has decided to award a number of projects using the notorious formula. This decision perpetuates the problem and rewards the network that has been fixing bid procedures in past years. This is, above all, a political problem. Hence its solution demands political will. If the ministry really wants to do away with the formula, it can do so in a snap. The existence of the scheme became evident in the Volos bypass project, in a competition that was canceled after revelations that most of the 37 bids were written by the same hand. The law foresees administrative sanctions, even the withdrawal of constructors’ certificates. The State has the means to enforce the law and shake off the burden of corruption, if it really wants to. It remains to be seen whether it will do so.

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