Because of negligence of officials and the government’s lack of action, Latvia’s Finance Ministry was forced to warn state and municipal institutions in secret that, in order not to lose co-funding provided by European funds, it is necessary to put off the launch of all procurements whose contract price exceeds EUR 5,225,000 for an indefinite period of time.
This negligence worth nearly EUR 90 million can bring about catastrophic consequences for Latvia’s Road Construction Companies, as reported by Dienas Bizness newspaper.
On 8 April, Finance Ministry sent an emergency warning to the Procurements Monitoring Bureau, Latvian Association of Major Cities and Latvian Association of Local and Regional Governments. In this letter, the ministry describes in a diplomatic language the catastrophic situation with the use of EU funding and the ‘solution’ for this problem.
«In order to reduce risks, we ask procurements to be recognized as non-compliant with regulations of the European Union, put off procurements in which the contract price reaches or exceeds the maximum thresholds established by the European Union for an indefinite period of time,» – as mentioned in the letter sent by Finance Ministry’s head of administration Ieva Braunfelde.
In relation to the state administration’s possible criminal negligence that puts at risk the accomplishment of goals listed in the government’s action plan and procurements worth approximately EUR 96 million in the country’s road industry, Latvijas Ceļu būvētājs has sent a letter to President Raimonds Vejonis, Saeima speaker Inara Murniece and Prime Minister Maris Kucinskis.
LCB also has the letter sent by Ieva Braunfelde to deputy state secretary Armands Eberhards, Procurements Monitoring Bureau, Latvian Association of Major Cities and Latvian Association of Local and Regional Governments. This letter details that public procurements whose contract price is above EUR 5,255,000 and supply and service contract price is above EUR 418,000 are recommended to begin before 17 April.
After 18 April, however, Finance Ministry recommends putting off procurements for an indefinite period of time ‘in order to reduce potential risks of procurements being recognized as non-compliant with EU regulations’.
This unprecedented proposal was expressed because the 2004/18/EC directive of the European Parliament and Council lost its power on 17 April 2016. In its place, EU officials adopted the 2014/24/EU directive for public procurements. The 2004/17/EC directive is also no longer in force. Instead there is the 2014/25/EU directive on procurements realized by subjects that work in the field of water supply, energy, transport and postal services, explains LCB.
In order to organize procurements in accordance with requirements of the new directive, the new Public Procurements Law and Procurement for the Needs of Public Service Providers Law were to come into force before 18 April. Unfortunately, due to unknown reasons (most likely negligence of officials), there are no laws that would govern legally correct procurements.
LCB wishes to know if the development of said laws had been intentionally sabotaged or if it is just another example of the usual practice of the Latvian government. LCB also calls to punish those responsible for this negligence.