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Kundziņsala overpass construction splits Riga Freeport authority over cartel case

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cartel, KNAB, corruption, Kundziņsala, Māris Martinsons, Oļegs Burovs, Riga FreeportLast week, Riga Freeport authority decided to sign a contract worth nearly EUR 40 million on the construction of Kundziņsala transport overpass with companies that have ties with people involved in the so-called construction cartel case, as reported by LTV programme De Facto.

The decision of the freeport’s authority was not unanimous, because the project’s usefulness and costs became the topic of discussions during the meeting, as well as concerns about the possible loss of EU funding because of the involvement of winners of the procurement in a cartel, the programme notes.

De Facto also stresses that supporters of the contract say that the freeport has done all it could to reduce risks. On top of that, organization of a new procurement would mean a delay and potentially risk losing EU money.

The initiative to start the construction of a new overpass from Tvaika Street to Kundziņsala was announced by Riga Freeport a couple of years ago. The first contractors were picked just recently. Two supplier unions had applied for participation and Riga Freeport authority decided to sign the contract with the one who offered the lowest price – nearly EUR 40 million. This is eight million more than what the port had previously intended, De Facto notes.

Riga Freeport does not reveal the results of the tender because they have yet to be told to contenders. Nevertheless, De Facto is aware that

the winner is SIA Tilts, road construction company Binders, AS LNK Industries, as well as sub-contractor – LNK Holding’s company Latvijas tilti.

One of Binders’ beneficial owners is construction businessman Armands Garkāns, whereas Artjoms Milovs is LNK Industries board chairman.

At the beginning of September, both of them, like many other industry representatives, were asked to come to Corruption Prevention and Combating Bureau (KNAB) and testify in the so-called cartel case, the programme explains.

On the same day, however, another businessman involved in multiple criminal processes – Māris Martinsons – was also at KNAB. De Facto had previously reported about a video that depicts Martinsons’ meeting with Aigaru Meļko, who is the former vice-president of Latvenergo accused of corruption, and Riga Freeport employee Ivo Dubkevičs in a park. Soon after this video was made public, however, Dubkevičs was removed from his post in the procurement committee, De Facto reports.

«We stood there with Ivo, talking. I was on my way from a hairdresser’s. We met and struck a conversation. We then noticed Meļko stopping by in his car. I went over, greeted one another and that was it,» Martinsons said about the meeting.

He denies having discussed any infrastructure objects a Riga Freeport: «There was nothing about the freeport! What do I have in common with the freeport’s authority? Nothing! […] I’ve never had any connection to the freeport. I am simply acquainted with Aigars and Ivo for some 20 years. Back then Ivo worked at SEB Bank as manager. I know him from those times.»

More on this topic: Latvia’s high-rank politicians may be involved in scandalous construction cartel

The programme notes that Riga Freeport had turned to Competition Council and KNAB to ask them if they have information about suppliers that may prevent the signing of the contract.

Both institutions told the port they are not allowed to provide comments about this.

Riga Freeport’s four board members represent Riga City Council. Another four members represent ministries. Economy Ministry’s representative Pāvels Rebenoks voted against the construction contract. Two city council members abstained in the vote. They are vice-mayor Vadims Baraņņiks and Harmony member Sandris Bergmanis.

Five other board members supported allowing Riga Freeport CEO Ansis Zeltiņš to sign the contract.

The main argument used by the people who voted in favour of the contract is thus: there isn’t a single decision regarding any company’s guilt. This is why it is foolish to fear such a possibility in the future. This was mentioned by Transport Ministry’s representative Džineta Innusa and Riga’s Mayor Oļegs Burovs.

«Perhaps this is the hardest part, because in reality we can use this argument to review and reject any construction project. But we have to understand that either we do things and have development or we cease any infrastructure development projects for an unknown period of time. A tough choice,» said acting Transport Ministry’s state secretary Innusa.

Burovs said: «All major construction companies we have are tied to this case. This is why – what do we want? Do we want the small SIA Maijpuķītes būve handle such important projects? We have to make do with the construction companies we have. I can say without any doubts that the cartel case and coordinated actions among construction companies – all of this is bad. But at the same time we should not move to liquidate the entire construction industry.»

As reported by De Facto, Riga Freeport plans to include in the contract a disclaimer that it may have the right to terminate the contract if guilt of the potential contractor is found. «Supporters also say that delays put at risk the project, as it needs to be implemented before the end of 2023. Otherwise there is a risk of losing co-financing from the European Cohesion fund – EUR 23 million.»

Opponent of the contract Rebenoks believes the overpass is not that important for Riga Freeport’s development, stressing that the risk of losing European funding is already present: «Considering that following the request of the CEO information was requested from law enforcement institutions – both KNAB and Competition Council – in the context of the cartel case, I have full confidence there is a possibility the port will have to finance the project on its own,» said Rebenoks.

Mihails Kameņeckis from Harmony’s Riga City Council faction is more optimistic: «Everything is fine in regards to influence on the process from the cartel case. We have taken measures. There is nothing to worry about.»

When asked if there are risks of losing EU funding and if he is able to offer any guarantees to Riga’s residents, Kameņeckis said: «I can guarantee we will not lose any money. The question is if we can even get this money.»

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