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Sunday 29.03.2020 | Name days: Agija, Aldonis

Exclusive | Competition Council’s chief on construction cartel; society needs to see the guilty pay the price

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Skaidrīte Ābrama

Society needs to see the guilty pay the price. Those guilty need to step down from their posts, not go underground and wait until the storm has calmed down, BNN was told by Competition Council’s chairperson Skaidrīte Ābrama about the recently uncovered construction cartel and suspicions over involvement of high-ranking officials.

Construction cartels reach important locations in Latvia

The ongoing investigation of the construction cartel case, which involves some of the largest construction companies in Latvia and many ex and incumbent politicians, does not reveal which strategically important construction projects in the country could be involved in backstage corporate schemes.

BNN managed to find out from Ābrama that there are apartment and public buildings involved – generally important buildings. However, when asked about suspicions about buildings involved in the cartel agreement the construction of which is still in the planning phase, the chairperson of CC said such information will be made available only once the investigation has been finished.

Corruption Prevention and Combating Bureau (KNAB) reported that multiple Latvian politicians are suspected of being involved in the construction cartel and accepting bribes in exchange for cover-up of illegal activities, which were very considerable.

So far it is known that ex-President of Latvia Raimonds Vējonis has been interviewed by KNAB and ex-Prime Minister of Latvia Māris Kučinskis was aware of the cartel problem during his term. Different media have also mentioned names of other well-known Latvian politicians – Edgars Jaunups, Dana Reizniece-Ozola, Jānis Reirs, Solvita Āboltiņa, Jānis Urbanovičs – in relation to their possible involvement in the construction cartel case.

When asked why it could have been beneficial for politicians to become involved in the cartel, the chairperson of CC comments: «Construction is a sector that constantly develops. European structure funds provide enormous amounts of money. Likely complicated projects and construction procurements make it easier to come up with amounts to pay for materials and labour force.»

She adds there are a great many ways to come up with large prices. «If participants of the cartel agree with one another on cutting up the market – this is for me, this is for you, I need to win here, I’ll start with this amount, please don’t offer lower – amounts presented in such procurements already include the so-called fees beneficial to politicians and attract their attention towards cartels,» comments Ābrama.

«There are many construction projects in process, costs are enormous because the objects in questions are important, which is especially attractive for companies participating in procurements,» she continues.

Reputation stain for the country

«This is a very loud case. If neither KNAB nor CC punishes the ones involved, it will be a major stain on the country’s reputation,» says Ābrama.

According to her, this case makes people doubt the people who were in charge at the time. «There is also the stain of shame to consider if there are also politicians KNAB has not mentioned yet,» comments Ābrama.

CC chairperson stresses that it is highly important for society to see that serious crimes do not go unpunished. «People also have to understand that cartels have a very negative effect on the country’s national economy. They lower our welfare. It is not like those involved in the cartel stole money just from public resources. This is all of our money they stole. Perhaps this is why it’s taking Latvia so long to reach the average European level of quality of life. We remain at the bottom among EU member states.»

Ābrama notes that cartels represent a major problem for Latvia – CC outlines this problem every year.

One of the main problems found during analyses is that the organizers of procurements sometimes encourage cartel activities.

«Take Rīgas satiksme’s nano-case, for instance. An official of Rīgas satiksme had agreed with companies on offers they would put up and who would win,» says Ābrama.

As for consequences from cartels and who should take responsibility, Ābrama notes: «I believe we have already paid for what we never received and what was very expensive. Putting together all the prices, if they reach several hundred thousands, you can afford building swimming pools, kindergartens, all kinds of social homes and whatnot. The money could be invested in other cities or labour force.»

Ābrama stresses this problem cannot be resolved in a «one-two punch», but it needs to be opposed. Punishing the ones responsible would be a good start.

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  1. Zerry says:

    Excellent outcome! Couple of years ago the foreign company participated a tender of big energy solution in Latvia. A lit of time and money spent in tender pricess. But that ”tender” was arranged in advance. Those rubbish people here in Lstvia does not understand that it is about the reputation of whole country ehat they are crashing. Just greed idiots, what else I could say?

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