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Tuesday 07.04.2020 | Name days: Helmuts, Zina, Zinaīda

VK: at least 7.14 million euros spent on Latvian-Russian border infrastructure illegally

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State Border Guard, State Audit, procurement, construction, infrastructureWhen establishing Latvian-Russian border, at least EUR 7.14 million of budget finances and property was used illegally, as concluded by Latvian State Audit.

This audit, which looked into the establishment of border line infrastructure and the legality of use of state budget finances allocated for maintenance, concluded that although funding was used in full, construction was not finished on time – by 31 December 2019.

VK had previously invited Interior Affairs Ministry to prevent previously uncovered problems and delays in the establishment of eastern border infrastructure.

After the audit, VK admitted that the ministry did not sufficiently monitor activities regarding Latvian-Russian border infrastructure and the State Border Guard and Provision State Agency acted illegally with state budget funds.

Additionally, institutions allowed changes to approved construction solutions will cause more expenses for the state budget than initially calculated, VK concluded.

The actual situation shows that in order to finish the work on the Latvian-Russian border, it will be necessary to look for additional funding: EUR 4.69 million will be needed, of which only EUR 1.16 million will be available in Interior Affairs Ministry’s budget for 2020. EUR 42.69 million was allocated from the state budget funds for 2015-2022 to finance the establishment of the infrastructure of the state border. EUR 26.8 million was allocated for the Latvian-Russian border infrastructure, VK notes.

«So far the border line project has been implemented without following approved plans, laws or principles of responsible use of funding,»

stresses State Auditor Elita Krūmiņa. She adds that findings of the audit will be reported to law enforcement institutions.

«Considering that work planned for the establishment of the Latvian-Belarusian border line is set to commence in 2020, Interior Affairs Ministry needs to act new to prevent something like this from repeating,» says Krūmiņa.

State Border Guard performs tasks it is not equipped to perform

Construction work of such a scale is not a function the State Border Guard usually performs, which is why VK believes the Interior Affairs Ministry should have involved an agency with experience coordinating construction work in this project. The planning and implementation of the border infrastructure ended up on the shoulders of the State Border Guard. The agency’s duties in border infrastructure were limited to sorting land ownership rights affairs and centralized procurement procedure implementation.

What was found in the audit shows that the border guard infrastructure project’s finishing terms were affected by considerable deviations from the construction project and there is no justifiable reason to excuse failure to finish work with slow land alienation along the border as often mentioned by the Interior Affairs Ministry.

Upon accepting construction contractor’s initiated changes and deviations from the approved construction project, the State Border Guard has failed to comply with General Construction Requirements, as concluded by VK.

Illegally chopped down and missing trees, delayed and questionable account of cut down wood

The State Border Guard had no legal justification for performing border line installation work in a wider territory than the 12 m set by the Cabinet of Ministers, VK notes. Overgrowth removal, weed removal, soil planning work outside the 12 m area was not covered by the approved construction project. However, results of the audit reveal more – work was performed in wider areas.

Trees were cut down within a larger state border territory than what was covered by the project, Cutting down trees outside the approved 12 m border line area cannot be considered overgrowth removal covered by the Forest Law and associated regulations, VK stresses. However, forestry work was performed illegally: without surveying forest areas and keeping relevant records.

Because records were not kept, VK is unable to evaluate the volume and value of illegally cut down trees.

Tree-cutting on the border was commenced in 2015, but the first time wood material measurements and evaluation was performed by the State Border Guard in spring 2019. VK believes Interior Affairs Ministry, agency and State Border Guard have thereby committed negligent, uneconomical and illegal action because evaluation, records and alienation of wood materials along the Latvian-Russian border was not performed in line with requirements.

Additionally, VK could not acquire sufficient proof about veracity of the timber assessment, because on multiple occasions assessments of experts differed. The expert hired by VK measured 26% more timber than planned at the same warehouse. The value declared for the timber materials was EUR 23 152 more than the value declared by the expert hired by the State Border Guard. On top of that, measures to at least sell the timber stored on the border line for the highest possible price were not performed. This means now the only remaining option is using said timber as fuel.

Unjustifiably increased border line areas

The audit also revealed violations of regulations in regards to measuring border line areas. The fact that the land units along the state border line were provided to the Interior Affairs Ministry in considerably larger portions than needed for the establishment of the state border line allowed for performing more expansive construction work and cutting down more trees.

The State Land Service was involved in measuring the necessary land areas for the border line. The audit report, for example, mentions a case when in accordance with the conclusion from the State Land Service there was unjustified alienation of more than 10 ha private land in 2015.

Although the conclusion was prepared with reference to a request from the agency, none of the previously performed preparation tasks for measurement of land needed for the state border line mentioned a need to alienate property from private persons within the 12 m radius. This caused additional expenses for the state budget in the form of a compensation of EUR 14 765 to the private person, VK notes.

Procurement in the interest of a single participant

No violations were found in the procurement of construction work. However, after analysing changes made to the volume of construction work, auditors concluded that in accordance with the Public Procurement Law such massive deviations from the general agreement are unacceptable. A new procurement should have been organized to accommodate the changes.

The audit revealed that during the border line’s construction work there had been changes added to the volume of necessary work, and this was likely done in the interests of a winning contender.

The winner’s offered prices for construction work, whose initial volume was not considerable initially, had increased considerably during construction and had turned out higher than the prices of other contenders. There was a situation that was the other way around – construction work initially planned to be performed on a larger scale was later narrowed down and reduced in prices. The price was the deciding factor that allowed LLC Road Construction Association Igate win the procurement.

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