The complainants point out that there are several aspects of the procurement procedure that lead to the conclusion that the said procurement procedure has not complied with the requirements of Latvian and European Union (EU) regulations on public procurement and public-private partnership procedures and the respective procurement results are erroneous and cancellable.
“Given our international experience, there are a number of aspects of this project that do not appear to be entirely fair at first, and we have appealed the procurement results to the PMB using our statutory rights,” said Alfonso Budinjo Carbonero, Cointer’s CEO.
The company explained that Cointer’s complaint can be divided into three main blocks. In particular, the company asks the PMB to inspect the association of persons “Kekava ABT” and its invited professional consultants who participated in the preparation of the tender, as “Cointer” is concerned about possible conflicts of interest, violations of competition law and other legal norms.
In the complaint, the company has pointed out the participation of the state capital company in “Kekava ABT” and possible problems in the Kekava bypass project to ensure the off-balance sheet accounting status, which is one of the preconditions for the project implementation. In order to define a project as complying with the off-balance sheet principle, it must be ensured that the significant part of the risks associated with the implementation of the project, ie design, construction, maintenance and financing, are borne by the private partner.
The company also wants to make sure that the price difference mentioned by SJSC “Latvijas valsts ceļi” in the bids of both bidders is not formed by different interpretations of “Latvijas valsts ceļi” requirements, especially those related to road user safety, construction quality, quality of life of people living near the ring road and calculations. Consequently, Cointer has asked the PMB to examine the solutions included in Kekava ABT’s offer to ensure that the two offers are comparable and that there is no price difference, allowing for deviations from the applicable procurement documents, construction standards and regulations.
Cointer has also asked to assess whether the requirements for the selection of the procurement procedure and the persons who have participated in the preparation and evaluation of the procurement documentation, such as KPMG Latvia’s participation in the preparation of financial and economic calculations in the interests of Latvijas Valsts ceļi and subsequently KPMG, have been complied with. participation in the preparation of “Kekava ABT” calculations and tax consultations. In its application, the PMB “Cointer” has also pointed to a number of other violations.
It has already been reported that the public-private partnership agreement for the design, construction and maintenance of the Kekava bypass has been awarded to the association Kekava ABT, which consists of the Luxembourg-based investment fund Transport Infrastructure Investment Company 2 SCA, SICAR (TIIC 2 SCA, SICAR “), as well as AS” ACB “and SIA” Binders “.
Of the two bidders who submitted the final bids, Kekava ABT was selected as the most economically advantageous bid, which also had the lowest price. TIIC 2 SCA, SICAR, an investment fund incorporated in Luxembourg, controls the association of persons with 80% of the total investment, while ACB and Binders each hold 10% of the investment in the association.
The availability payment to the private partner will be up to 13.5 million euros without value added tax (VAT) per year. Depending on the circumstances, the amount may be lower, but certainly not higher. According to the calculations of the agency LETA, the maximum amount in 20 years can reach 270 million euros without VAT. Cointer’s offer, on the other hand, was 11% more expensive, according to representatives of Latvian State Roads.
The Kekava bypass will be the section of the main national road Riga – Bauska – Lithuanian border (Grenctāle) (A7) from 7.78. up to 25 kilometers. Its lane-kilometers will be approximately 100 kilometers, including a four-lane road (two lanes in each direction) – 12.22 kilometers, a two-lane road with one carriageway and one lane in each direction – 5.36 kilometers, parallel roads and overpasses – 20.7 kilometers. The project includes two tunnels, six bridges and overpasses, 10 roundabouts, two pedestrian bridges and tunnels and 6.5 kilometers of noise solution.
The Kekava bypass will be the first project in the Baltics to be implemented on the principle of “design-build-food-finance”. The private partner will provide design, construction, financial attraction and road maintenance for 23 years. In the case of the Kekava bypass, the private partner will be fully responsible for all maintenance work on the construction site for the entire duration of the PPP, including spreading, cleaning, mowing of the compartment (roadside), destruction of hogweed, lighting, electricity for lighting and other traffic management equipment, public maintenance of transport stops, restoration of horizontal road markings and other works.
The private partner will also guarantee that for another five years after the expiry of the public-private partnership agreement, the Ķekava bypass will remain of such a quality that it will require only daily maintenance work, but not capital investments.