The rehabilitation of Stefan cel Mare Boulevard and of Alecsandri and Negruzzi streets in the capital costs us astronomical sums, while the company which executes the works seems to have some relation with Mayor Dorin Chirtoacă. This project aimed at the repair of nearly seven kilometres of road is worth 11.5 million Euros, the money being borrowed. The municipality would have paid a million and a half Euros less, if no infringements were committed at the tender, as confirmed both by the National Integrity Commission, and by a special inquiry commission of Chişinău Municipal Council.
The works are being carried out by SC Delta ACM – 93, a company from Romania selected in the framework of an international tender held in 2014. The company committed to finish the works within 12 months after their start in 2015. Although the deadline will expire in three months, the works on Alecsandri Street and Negruzzi Boulevard are far from being completed, as for Stefan cel Mare Boulevard, the works have not even started.
The money for street rehabilitation in Chișinău was borrowed to the European Bank for Reconstruction and Development (EBRD), the loan agreement being signed by EBRD President Thomas Mirow and Mayor Dorin Chirtoacă on 2nd of December 2011. In fact, the loan agreement was approved post-factum by Chișinău Municipal Council, on 25th of January 2012 by its Decision no. 1/3.
On 21st of September 2012, the European Investment Bank, in the person of Vice-President Wilhelm Molterer, and Mayor Dorin Chirtoacă signed a loan agreement for co-financing of "Chişinău Sectorial Urban Roads Project". A report of the inquiry commission set up by the CMC points out that Dorin Chirtoacă was not empowered by the Municipal Council to sign these contracts, violating thus the provisions of a number of laws and decisions of CMC.
“The loan agreement was signed by Chișinău Mayoralty, a structure with no public authority. According to the Law on Local Public Administration no. 436 of 28.12.2006, Article 1, the mayoralty is a functional structure that assists the mayor in the exercise of his/her legal duties”, specifies the report of the inquiry commission which claims that Chișinău Municipal Council is the only authority entitled to sign the loan agreements. Moreover, the authors of the report believe that the loan conditions are unfavourable and the interest rates - too high.
A tender which is called into question
The members of the inquiry commission found out that infringements were committed during the tender for the selection of the contractor. Or, the bid evaluation board was set up by Mayor Dorin Chirtoacă just some hours before the tender. The board consists of five members who hold leading positions within the mayoralty of Chişinău and the General Directorate for Public Transport and Ways of Communication, as well as a representative of EGIS International Company, who subsequently withdrew from the position of voting member.
According to the legislation in force, the bid evaluation board shall consist of five voting members. In addition to it, each board member shall sign a declaration of confidentiality and impartiality, an unmet requirement in the case under consideration.
Six companies took part in the tender:
Elecnor JSC (Spain) - 16,528,543.49 Euros;
Ingstroyengineering Ltd (Bulgaria) - 10,000,688.48 Euros;
SC Tangrad LLC (Romania) - 12,405,542.88 Euros;
SK-13 Patstroy JSC (Bulgaria) - 12,405,542.88 Euros;
Research Consortio Stabile S.C.A.R.L. (Italy) - 14,950,578.94 Euros;
SC Delta ACM - 93 LLC (Romania) - 11,571,416.11 Euros.
Although a company from Bulgaria submitted a better bid, the winning bid was Bucharest SC Delta ACM – 93 LLC. A few weeks later, in June 2014, Dorin Chirtoacă signed the contract with this company which undertook to rehabilitate the three streets within 12 months.
What is Delta ACM - 93 SRL and what are the interests of the mayor of Chişinău?
Delta ACM - 93 is a construction company from Romania established in 1993 by the businessman Florea Diaconu. The press wrote repeatedly that the company would be close to the Democratic Liberal Party (DLP) of Romania, whose member was the former Romanian President, Traian Băsescu. One of the company's directors is Ionel Pirpiliu, brother of Ştefan Pirpiliu, who was a DPL deputy until the year 2012, and who is currently the General Secretary of Civic Force Party.
Dorin Chirtoacă has close ties with the family of the former President Băsescu. The mayor is the godfather of his daughter, Elena Băsescu. Before the tender, Ştefan Pirpiliu frequently visited the capital of the Republic of Moldova together with Mihai Răzvan Ungureanu and with the leaders of the current party of Băsescu, Mişcarea Populară (People's Movement): Teodor Baconschi and Eugen Tomac.
"Delta ACM - 93 is a big fish among the Romanian builders. The company, alongside with a few other whose colour is close to orange, have known a shocking development over the past years. During a few years, Delta, a mediocre firm with 33 employees and a turnover of 1.5 million Euros, became a super company specialised in construction, with thousands of employees and turnovers that shake the memory. The spectacular bound of the company owned by Florea Diaconu occurred in 2007", cotidianul.ro wrote.
“After the exile from Bucharest, SC Delta ACM – 93, which was seen as being under the wing of the family Udrea- Cocoş, stated to «gather» money throughout the country, focusing particularly on asphalting, pavement works, building kerbs, enveloping works and mansard building. Throughout the country, the local governments in the communities where this company won the tender were led by the DLP”, the publication Actualitatea Vâlceană wrote in 2013.
Afterwards, SC Delta ACM - 93 figured in DNA investigations related to corrupt actions within a number of local government authorities in Romania, and also was the subject of a criminal suit started by the police of Craiova for the bad quality of a road rehabilitation, what caused a car accident.
In Chișinău, Delta ACM - 93 LLC has over the past years repaired Alecu Russo Street, a project for which the municipality spent over 80 million lei. The works began in September 2012 and were supposed to be completed in autumn 2013, but it happened one year later.
The quality of the works performed on Alecu Russo Street was the subject of several complaints submitted to the City Hall by the State Inspectorate for Constructions. According to a report of the afore-mentioned Inspectorate on the quality of works executed on Alecu Russo Street, “the thickness of the leveling stratum does not meet the requirements of project documentation, the mixture of minerals in the composition of the sampling of asphalt concrete does not correspond to the admissible limits of the granulometrical composition, an insufficient adhesion of bitumen to the surface of the mineral parts of the asphalt concrete persists, the asphalt concrete mixture is done based on various types of pebble, exceeding the allowable non-knapped percentage.
The results of the tender challenged in the courts
Ingstroyengineering LTD, the company from Bulgaria which offered the lowest price in the tender for the rehabilitation of the three streets, challenged the results of the auction, first in the Public Procurement Agency and subsequently in the court.
“We consider that the tender for the selection of bidders was held with serious infringement of the procedure established by virtue of tender documentation, therefore its results shall be declared null and void”, the request submitted by the Bulgarian company specifies.
The company’s managers reject the argument of the tender’s organisers that Ingstroyengineering does not have the required experience for the rehabilitation of the three streets in Chişinău. “The bid submitted by Ingstroyengineering LTD contains all the information about the overall and the specific experience, and the content of the bid reveals that Ingstroyengineering LTD has a much broader overall experience, than the minimal experience required. The arguments given by Chişinău Municipality are formal and declarative, and have no evidentiary support. Moreover, Ingstroyengineering LTD has offered the lowest price”, the Bulgarian company points out in its contestation.
The court of Centru sector of Chişinău docketed the case of the Bulgarian entrepreneur, but after a number of hearings, the complainant withdrew its file from the court. “The representatives of Chişinău municipality used either to miss the hearings, or not to submit the requested documents. The Bulgarian investor gave up fighting, saying that it makes no sense to fight for investing in the Republic of Moldova. They left and said they would not return to Moldova”, mentioned the lawyer Ghenadie Ţepordei, who represented the interests of the Bulgarian company in the court.
The inquiry commission of Chişinău Municipal Council: The tender must be re-evaluated
The inquiry commission of Chişinău Municipal Council (CMC) found out that the tender procedure was biased and that it infringed the provisions of the tender documentation, the tender book, the ERDB’s rules for tender conduct, as well as the provisions of the national legislation in force.
In addition to it, according to the inquiry commission, the mayor has exceeded his authority, when he signed the loan contract. Furthermore, the inquiry commission recommended the modification of the loan agreements with the funders and payment of all the arrears, annulment of the mayor’s directive of 11th of February 2014 and the establishment of a new evaluation board, which would include representatives of Chişinău Municipal Council.
All these recommendations remained on paper. The General Directorate for Transport and Ways of Communication of Chişinău municipality submitted a number of counterarguments to the conclusions of the inquiry commission: “Although Dorin Chirtoaca signed the financing contract without being empowered by the CMC, the contracts entered into force after approval by the Council”. The General Directorate for Transport and Ways of Communication considers as ungrounded the arguments about the disadvantages of the financing contract. “The declared overall inflation rate in the economy has been estimated at about 5% over the past years. Moreover, according to the provisions of the contract, there is also a grant component worth 1.2 million Euros”.
The General Directorate for Transport and Ways of Communication also rejects the assertions about the biased bidding process and the law infringement: “The Bulgarian companies did not submit convincing arguments for their capacity to renovate the streets within 12 months. The representatives of the two companies were afterwards invited by Chişinău municipality at a meeting for clarification and they were informed about their right to challenge the tender’s results in accordance with EBRD regulations, but the Mayor's Office has not received any complaint from them”.
The repair woks on Ștefan cel Mare și Sfânt Boulevard have not started yet
« The political conjuncture protects corruption in the city hall »
The report of the inquiry commission was submitted to the General Prosecutor’s Office. On 11th of July 2015, Vitalie Roşior, prosecutor in the fiscal and economic frauds unit of the General Prosecutor’s Office issued an order refusing to prosecute the decision-makers of Chişinău municipality, invoking the lack of elements of a crime.
A few months later, on 8th of October 2015, the National Integrity Commission established that Dorin Chirtoacă infringed the legal provisions related to the conflict of interest in favour of SC Delta ACM - 93 LLC at the tender for the repair of the three afore-mentioned streets of the capital city. “The personal interest of the mayor was deducted from having favoured the designation as the winning bid in the international tender for the rehabilitation of the mentioned streets of the company which previously won the tender for the rehabilitation of Alecu Russo Street in Chișinău, despite the delay in executing the works on that street and the non-compliance with the quality requirements, the price offered by the respective company in the tender was not the lowest, as required by the legislation, and it does not hold the experience needed for this type of works”, the resolution of the National Integrity Commission specifies. The Commission sent the Finding Act to the National Anticorruption Centre, with the proposal to apply a contravention fine to the Mayor. But Chirtoacă remained unpunished, due to the expiry of three-month limitation period prescribed by the Contravention Code.
The former municipal councilor Victor Gurău, secretary of CMC inquiry commission, said that although there was no reaction from the competent authorities yet, the commission’s report will have an effect. “This report is like a time bomb that will explode at the right time. The present political conjuncture is, unfortunately, unfavorable for starting a criminal case against the top official from Chişinău City Hall. But ultimately the situation will however turn out like at the Savings Bank. At the beginning, nobody believed that measures would be undertaken after we talked about the thefts committed at the Savings Bank, but the information has finally exploded. The present political conjuncture is protective for the corruption at Chişinău municipality”, Victor Gurău considers.
The civil society gets involved
In early March, a number of activists have established an urban initiative group and submitted to Dorin Chirtoacă a petition to request an explanation about the way how he spent the public money to renovate Ștefan cel Mare Boulevard and other streets in Chișinău. The initiative group also requested the display in public places of the documents related to the rehabilitation of Ștefan cel Mare și Sfânt and Constantin Negruzzi Boulevards, Vasile Alecsandri Street (package 1), as well as of Tighina, Alexandru cel Bun, 31 August 1989 streets.
Victor Chironda, one of the group’s members, told us that they would insist on carrying out an expertise of the tender book and of the project for the rehabilitation of the three streets. “After having seen the quality of repairs done on Vasile Alecsandri Street, I have strong doubts that the works really cost so much. Therefore, we want to be provided all the documents. We have already collected over one hundred signatures. If they refuse to give us the copies of documents, we will go to the court”, the activist said.
The expert Sergiu Tofilat, another member of the same group, does not exclude the embezzlement of public funds under the cloak of rehabilitation works. “We shall investigate. The society is to blame for keeping quiet and allowing the thefts”, the expert thinks.
Dumitru Mutu, manager of Delta ACM - 93 for the Republic of Moldova: “These are bad faith insinuations”
At the request of the reporter of the Centre for Journalistic Investigations, the representative of Delta ACM - 93 in the Republic of Moldova, Dumitru Mutu, rejected all the accusations to his company. “They are not more than bad faith insinuations. The tender book, the designs and all tender requirements were not developed by Delta. If the company was the winning bidder, it means that it met all the requirements", the Romanian company’s representative said.
Dumitru Mutu denied the existence of any links between his company and the political sphere: “We are not a company based in an apartment. We are a construction company known throughout Europe and beyond it. We want to make a name for our company in the Republic of Moldova, too, as a result of performing works of high quality. It is abusive when they say that the work performed by us is not well-done”.
On the other hand, the manager of Delta ACM - 93 recognizes that the company will not succeed to repair the three streets within the period of time established in the contract. “Along the way, new issues came up, as well as changes to the project. The project for the rehabilitation of Alecsandri Street will be updated with a view to set up more parking places”, Dumitru Mutu stated.
Dorin Chirtoacă: « The accusations did not find any justification »
Dorin Chirtoacă has repeatedly rejected the accusations. Moreover, the mayor challenged in the court the Funding Act issued by the National Integrity Commission. The file is still subject to legal proceedings in the court.
Contacted by the reporter of the Centre for Journalistic Investigations, Dorin Chirtoacă rejected all the allegations: “The report of CMC inquiry commission was submitted to law enforcement bodies and all the accusations were investigated, but did not find any justification”.
The repair of the two streets and of the capital’s central boulevard is the first stage of a larger project called “Chişinău Sectorial Urban Roads Project”, worth 22 million Euros. This project is intended for the rehabilitation of six main and secondary streets in Chişinău, with the total length of 14.3 kilometres.
The investigation has been done in the framework of the Campaign „Public Money Is My Money Too”, conducted by the Centre for Journalistic Investigations (CJI) and the Association for Efficient and Responsible Governance (AGER), within a project funded by the European Union and the National Endowment for Democracy.