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Saturday 25.01.2020 | Name days: Sigurds, Zigurds

Competition Council bashes Riga’s planned waste management tender

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s Competition Council has voiced 15 complaints about the developed waste management service tender, including the differences among the four planned waste management zones, and the proposal to allow a single contender manage up to 86% of the city’s territory. There are also complaints about providing advantages to existing market participants.

Last week, Competition Council met with Riga City Council representatives to discuss plans for waste management in the city, as well as the municipality’s developed procurement order the goal of which is finding new waste management service providers.

After the meeting, CC management said the municipality acts in reverse and instead of submitting a plan to CC for approval, reflecting a desire to ensure compliance with competition rules on the waste management market, the city council decided to submit to CC a project for a tender containing «many, mildly putting it, odd rules,» says CC chairperson Skaidrīte Ābrama.

According to the letter CC sent to the city council available to LETA, the Competition Council has submitted 15 objections about the tender.

For example, the tender states that the contender for the Eastern Executive Administrative Territory needs to prove «they have experience in waste management services using specially marked waste bags, that they have specific electronic reading devices for customer identification and the volume of collected waste is at least 50 m3 a month».

According to CC, the tender does not provide a clear explanation as to why the requirement for electronic reading devices for customer identification is applicable only for this particular part of Riga.

Additionally, according to information available to CC, customer identification devices in Latvia are used only in Jurmala, where waste management services are provided by SIA Clean R.

«By requesting specific experience, not the ability to ensure compliance with requirements, SIA Clean R is currently the only waste management company capable of meeting this requirement. Additionally, it is doubtful there are justified reasons to request adoption of the aforementioned service is from waste management service providers,» CC notes.

Riga City Council Housing and Environment Department vice-director Kristīne Ermansone admits although she does not work in the procurement committee, she is also of the opinion that there are certain aspects of the tender that need improving.

Read also: Competition Council: Riga City Council takes no responsibility for its own mess

According to her, the procurement committee will gather for a meeting in the next couple of days. During this meeting it will be decided which of CC’s recommendations to take into account. «I cannot say now how many of the recommendations will be adopted,» admits Ermansone.

At the same time she adds she does not want to agree with CC leader’s public opinion that the tender may have been put together in the interests of a specific market participant.

«The division into areas alone shows that we have opened the way for any participant to submit their offers,» says the department’s representative.

Riga City Council Housing and Environment Department’s Environment Office leader Evija Piņķe, who is a member of the procurement committee, does not agree with CC’s criticisms.

According to her, establishment of different zones is meant to ensure contenders of different capacity are able to apply, also making sure none of the outlined zones are left without a winner.

«We have to make sure contenders not only apply for participation and win but also able to provide services. We’ve seen cases when tenders were won by contenders with the cheapest offers who turned out unable to work,» said Piņķe.

She admits the committee will gather for a meeting in the next couple of days. She did not say how many of CC’s recommendations will be taken into account.

The letter mentions that after looking through information from Riga City Council’s Housing and Environment Department, CC concluded the city council did not perform assessment of the situation with competition for collection and transportation of unsorted and sorted waste in Riga. Therefore information provided by the department does not provide justified reasons if the planned tender and its requirements can provide compliance with competition rules.

CC does not understand why the department has put a limited access status to requirements of the tender, because to ensure the range of contenders is as wide as possible, information about the tender and requirements should be provided to all contenders in a timely fashion.

«On top of that, reasons and benefits from not having the tender publicly discussed are unclear. It would be important to publicly explain both the opinion of potential service providers and service customers – companies working in Riga and residents – on whose behalf and interests the municipality organizes waste management service tenders,» says the council.

Additionally, after going through the contents of the tender, CC concluded that certain requirements and their definitions create concerns about creation of advantages for specific market participants, making the tender a formality.

For example, the tender provides for having the contract with the winner of the tender be associated with CC’s final decision in the initiated violation case. If it is decided the signed concession agreement with AS Tīrīga is still binding, the company will be able to commence operations.

CC believes this condition creates legal uncertainty and reduces the interest of potential contenders with the tender.

It is also unclear for CC why a single contender can be considered a winner in three separate territories, because if such a scenario is realized, there is a risk of a single waste management company becoming in charge of 86% of Riga territory’s unsorted waste. CC believes such an outcome will create a risk of concentrating market power in Riga.

At the same time, CC is confused over the justification behind the chosen division of Riga’s territories, considering the differences in territory size, waste volume size, as well as population density.

«Generally, we have to conclude that only SIA Clean R and Eco Baltia will be able to meet requirements of the new tender,» CC explains.

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