The director of the EPBiH and several other persons have been reported, the tenders won by the Chinese are disputed!

 

Specifically, due to indications of favoritism to bidders for a job worth 63 million KM (excluding VAT), i.e. flue gas desulfurization at Block 6 of the Tuzla Thermal Power Plant, against a number of persons in Elektroprivreda BiH, headed by director Sanel Buljubašić, of the Federal Police Administration (FUP). a criminal complaint was filed. This application was submitted by the founder and director of Tehnopetrol Tuzla, Elvir Ferizović and Nedim Mujkić. Also, the applicant is the company Deling from Tuzla.

 

Questionable move

In addition to Buljubašić, criminal charges were also filed against Fahrudin Tanović, executive director for production, and Munevera Avdić, head of the EPBiH Commercial Affairs Sector. They are accused of abuse of position and unscrupulous work in the service.

 

Namely, on April 24, Elektroprivreda BiH made an extremely dubious move when the Chinese-Zenica-Banjali consortium in the composition of Dongfang Electric International Corporation China - ITC Zenica - Fujian Lonjing Environment Technology CO d.o.o. China - Institute for Construction IG Banja Luka (abbreviated: consortium DEC-ITC-LONJING-IG) chose as the only qualified candidate in the pre-qualification phase, with whom it would then proceed in the further process of awarding this job.

 

On the other hand, the EPBiH disqualified the consortium consisting of Deling Tuzla – SBB Energy S.A. Opole Poland – Tehnopetrol Tuzla – Termolektro Brčko – Tehnograd Tuzla.

Disputed decision of the EP BiH: They chose only the Chinese-Zenici consortium as a candidate

In the criminal report submitted to the FUP, it is stated that it is clear from the explanation of the decision that the mentioned decision of the EPBiH is illegal and that the actions have characteristics of criminal acts. According to the application, Elektorprivreda BiH acted illegally because it did not reject the DEC-ITC-LONJING-IG consortium's request for participation in the public procurement procedure on several grounds.

Serious incriminations

One of the most serious incriminations in the criminal report submitted to the FUP, as stated, is that the EPBiH based the economic and financial capacity of the selected Chinese-Zenici consortium on their statement, and not on valid financial statements or income statements. The contracting authority, it is pointed out, did not appreciate the validity of the financial statements of the consortium based on the acts of the competent authorities and valid regulations.

 

In addition, it is claimed in the application, the contracting authority evaluated the financial capacity of the Chinese-Zeneca consortium on the basis of unsuitable documentation and contrary to the order of the Appeals Review Office (URŽ) of BiH dated August 31, 2023. With that act, the URŽ ordered the EPBiH to change its position on the validity of the income statement is based on acts of competent authorities. However, it is stated, the EPBiH did not act accordingly, but determined the facts based on the DEC-ITC-LONJING-IG consortium statement.

 

Thus, the EPBiH, it is pointed out in the application, and it is also visible in the public procurement file, with the aim of resolving these issues, turned to the consortium headed by the Chinese company with a question whether the state law on accounting of China or some other norm defined the manner and form of financial reports. balance sheet, etc. in terms of language.

This consortium submitted an answer to the EPBiH that the Law on Auditing of the Republic of China does not prescribe the language in which authorized auditors prepare reports. Elektroprivreda BiH then turned to the Embassy of China in BiH, which did not provide them with an answer to the inquiry, but referred them to the bidder itself, i.e. to the aforementioned consortium, and then decided to accept the answer it received from the consortium, which the applicant considers illegal.

It is further stated that the DEC-ITC-LONJING-IG consortium failed to submit copies of the original profit and loss statements, as a result of which it also failed to fulfill the tender condition in terms of economic and financial condition, which is prescribed by Article 68 of the Law on Public Procurement of BiH, according to which the request of this consortium should be rejected as unacceptable.

 

Chinese and English language

The application also underlines the fact that the DEC-ITC-LONJING-IG consortium submitted income statements in English with a translation into one of the official languages in BiH. However, in the independent auditor's report that they attached, on page 155, it is pointed out that it is about translations from Chinese to English. Also, it stated that in case the English version is not aligned with the Chinese, the Chinese version will be relevant?!

The application states that this fact is continuously ignored by the contracting authority, that is, that it is a translation of the report, which means that the DEC-ITC-LONJING-IG consortium did not submit the original reports.

Doubts were also expressed regarding the legality of the actions of the EPBiH in assessing the validity of the certificate on the successful implementation of the contract of the DEC-ITC-LONJING-IG consortium, which was established by a certain criminal expert, and which was not delivered to the applicant.

As one of the reasons why it disqualified the consortium consisting of Deling Tuzla - SBB Energy S.A. Opole Poland - Tehnopetrol Tuzla - Termolektro Brčko - Tehnograd Tuzla, EPBiH stated that this was done because in the documentation terms like "senior", "designer", "assistant", "University", "Project Management" and others were not translated to one of the official languages in Bosnia and Herzegovina?!

But, on the other hand, will I accept the entire reports in English from the Chinese-Zenica consortium?!

It is also stated that EPBiH, as can be seen from the entire public procurement file, with the aim of establishing the facts regarding eligibility, sent inquiries to the DEC-ITC-LONJING-IG consortium to clarify their request, and allowed the delivery of new additional documentation. At the same time, he did not ask the applicant for any clarifications and failed to appreciate the documentation that he submitted as part of the appeal procedure, which removed all doubts regarding the fulfillment of technical and professional abilities.

 

Decisions of the URŽ

It should be emphasized that the EPBiH announced the aforementioned tender on September 30, 2022, which was the subject of decision-making in the URŽ on several occasions.

Thus, the fact that on January 4, 2023 EPBiH made the initial decision on the result of prequalification of candidates in the negotiation procedure in such a way that it determined both consortia as qualified candidates and then enabled the downloading of tender documents and the submission of bids for both of them casts additional doubt on this entire process. .

The first decision of the EP BiH from 4 January 2023.

However, the Complaints Review Office promptly received a complaint from the aforementioned Chinese-Zenica consortium, on January 24, 2023, which considered that the EP incorrectly determined the factual situation, incorrectly applied substantive law, as well as the Law on Public Procurement. The second consortium is accused of not having properly submitted evidence of successfully implemented contracts, then of technical and professional abilities, etc. The consortium led by Deling considers the appeal to be completely unfounded, and responds with a counter-appeal. At the same time, the EPBiH assesses the allegations of this consortium as unfounded.

 

On March 23, 2023, the Appeals Review Office accepted the appeal of the consortium Deling Tuzla – SBB Energy S.A. Opole Poland - Termolektro Brčko - Tehnograd Tuzla and the case is returned to Elektroprivreda BiH for a new procedure.

 

Among other things, the appellant stated that the EP should have rejected the DEC-ITC-LONJING-IG consortium for the simple reason that one of their members, the company Institute for Construction IG Banja Luka, made serious professional mistakes in the affairs of the EP. They state that the contracts are related to HPP "Una" from July 2018, and TE "Kakanj" from March 2020, where they were terminated due to non-fulfillment of obligations. All this, it was stated in the appeal, resulted in direct and indirect damage to the EP.

 

Elimination of competition

In response to these allegations, the EPBiH stated that there is no legally binding court verdict for IG Banja Luka, while the URŽ assessed such allegations as unacceptable. Also, the URŽ assessed the EPBiH's response to the complaints regarding the failure to submit the income statement and other financial documentation as unacceptable. The Appeals Review Office ordered the EPBiH to carry out all the necessary evidence in the retrial.

On May 22, 2023, the EPBiH makes a decision respecting the decision of the URŽ and canceling the negotiation procedure. However, on April 24 of this year, it made a controversial decision declaring only the DEC-ITC-LONJING-IG consortium as a qualified candidate in the procurement procedure.

Nedim Mujkić, director of the company Tehnopetrol Tuzla, in a statement to Fokus.ba, states that, when it comes to the mentioned Chinese-Zenici consortium, they noticed a pattern in which the same story is repeated in a number of projects.

That matrix looks like this: EPBiH announces public procurement with pre-qualifications in which the professional abilities to participate in these projects are proven. Then those who have qualified go to the stage of the commercial part of the bids. Here on the scene is something that was symptomatic in a series of projects. In all of these projects that we had the opportunity to compete on until today, it came down to the fact that the Chinese-domestic consortium goes for the option to eliminate all potential competitors by all possible means and to remain alone in the negotiations with the EPBiH in the phase of offering those projects - says Mujkić.

On May 24 of this year, Elektroprivreda BiH made a decision awarding the job of replacing the steam pipe on the boiler of Unit 4 in TPP Tuzla to a consortium that once again included Dongfang Electric International Corporation of China and ITC Zenica. The deal is worth 21.2 million KM (without VAT).

Facsimile of the EP BiH decision for Block 4: Business again to Dongfang and ITC

Also, the Chinese and Zenica companies are together in a consortium for the construction of a flue gas desulphurization plant at TE Kakanj. This deal is worth as much as 126.4 million KM (without VAT). In mid-May, the Appeals Review Office made a decision accepting the appeal of the aforementioned consortium and ordered the EPBiH to repeat the procedure.

The "Banovići" brown coal mine was chosen a decade ago by Dongfang Electric International Corporation China for the construction of Banovići Block 1 - 350 MW thermal power plant. The project is worth 405 million euros. In 2015, the Agreement on Strategic Cooperation was signed. However, the contract with the Chinese has not been initialed to this day, while in the media this project has already been declared a failure. Inforadar also wrote about this last year.

Dongfang Electric International Corporation China is engaged in a number of capital energy facilities in the RS, such as TE Stanari, solar power plant in Bileća, and is also interested in building HPP "Buk - Bijela".

- Chinese companies also strive to exert their influence in Bosnia and Herzegovina. They also found a suitable ground in our domestic companies, with which they partnered for the needs of administration, licenses and other matters. And when the projects come to fruition, they most often hire companies from the surrounding area, primarily from Serbia, where they are based. In the last project that was carried out in Tuzla, out of 10 subcontracting companies, eight were from Serbia.

 

Domestic companies from Tuzla did not have the opportunity to be involved in the project.

Therefore, those Chinese companies are imposing their own games - says Mujkić for Fokus.

 

What do they say from EPBiH?

Fokus.ba sent a set of questions to Elektroprivreda BiH to clarify all this. In their response to our portal, the EPBiH stated that, considering that it is a two-phase procedure that is ongoing and where an appeal has been filed, they are not able to provide any information about the case that has not been concluded. They added that it will be possible to provide information to persons who are not involved in this procedure only after the decision on the selection of the most favorable bidder has been made.

There was no response to our official inquiry to China's Dongfang. We also contacted the company ITC Zenica through the official channels, but we did not receive an answer until the end of this text. If we receive it, we will publish it later.

According to the records of the Public Procurement Portal, the company ITC Zenica has concluded a total of 580 contracts with contracting authorities in public procurement processes in the past years with a total value of 137,243,018 KM.

Data from the public procurement portal on ITC Zenica contracts

Also, on the Public Procurement Portal, it is stated that the main activity of ITC Zenica is the wholesale trade of agricultural machinery, equipment and accessories

Description of the activities of ITC Zenica on the public procurement portal

On the website of ITC Zenica, it is stated that in 2007 they expanded their activities to trade in firefighting trucks and equipment, and since 2008 they have been engaged in the provision of services in the field of air conditioning, heating and cooling.

 

CONCLUSION

 

Another example of the business of Chinese companies in the countries of the Western Balkans, which can be characterized as suspicious, to say the least. The fact that domestic officials, who did not act in accordance with the orders of the BiH Appeals Office, were also involved in the entire process of qualifying the Chinese company (as the only qualified bidder) for the million-dollar job of Elektroprivreda BiH, should additionally concern the owner of the company (in this case the Government of FBiH). , but also citizens. The information in the text that is particularly alarming is the fact that the consortium led by a Chinese company was selected even though it did not submit the documents prescribed by the Law on Public Procurement of Bosnia and Herzegovina and the tender documentation.

Due to such and similar examples in Bosnia and Herzegovina and other countries of the Western Balkans, as well as obvious omissions when it comes to Chinese companies as contractors for infrastructure works or investors in facilities, extra caution is necessary when checking the qualifications of Chinese companies. Because it is not a rare case that Chinese companies that have been sanctioned in other countries due to serious professional failures in the countries of the Western Balkans participate unhindered in tenders and win jobs.