Greece is under the microscope of the European authorities as the entire process of public tenders concerning the large recovery package in the post-covid era is being investigated since there are serious indications and complaints of rigged tenders concerning the allocation of 2.5 billion euros.
As stated in most cases, the competition did not work and only one company competed and even with an overpriced offer.
The investigation is the latest blow to the reputation of the EU’s post-pandemic support, after the arrest of more than 20 suspects linked to an alleged €600 million fraud plot in Italy, the European website reported. Politico with an article by Nektaria Stamoulis.
It is recalled that Documento has also published an extensive report on how the Economic Recovery Fund ends up being a fund to support big businessmen with public guarantees.
Politico’s article on the Recovery Fund
ATHENS – Authorities are investigating allegations of fraud linked to how 2.5 billion euros of EU funds have been granted to just 10 companies in Greece.
At the offices of the country’s three telecommunications companies – Cosmote, Vodafone and Nova – as well as five IT companies and two consulting firms raided by Greek competition commission investigators last month. THE European Public Prosecutor’s Office (EPPO) an investigation has also been launched as confirmed.
The investigation is the latest blow to the credibility of the EU’s post-pandemic economic recovery fund, initially worth 723 billion euros, which provides loans and grants to the bloc’s 27 countries. Last week, police arrested more than 20 suspects in Italy, Austria, Romania and Slovakia linked to an alleged plot to defraud the treasury in Italy of 600 million euros.
The Greek investigation focuses on public tender processes where companies allegedly colluded to avoid more than one of them bidding for the same contract – limiting the number of companies that benefited. This may have led to an increase in the fees they could charge, ultimately preventing Greek taxpayers from reaping the full benefits of EU money.
With projects worth 35.95 billion euros, Greece is one of the main beneficiaries of the fund, known as Recovery and Resilience Mechanism (RRF). About a fifth of that amount goes to making the country more digital, according to the plan submitted to the European Commission.
To date, around 600 digital projects worth more than €2.5 billion have been auctioned and awarded, according to data from the Central Electronic Register of Public Contracts. EPPO and Hellenic Competition Commission investigate how these projects were commissioned.
In a statement, the Hellenic Competition Commission stated that it is examining whether there was a violation of the EU treaty which “prohibits anti-competitive agreements and decisions of business associations that prevent, limit or distort competition, unilateral practices that constitute an invitation to collude or future price announcements to competitors and the abuse of a dominant position”.
Vodafone confirmed the competition commission’s investigation. The other companies did not respond to related inquiries. The Greek prime minister’s office and the country’s development ministry did not immediately comment.
More than one offer
Between them, the 10 companies under investigation won contracts for more than 600 projects in the technology sector between the years 2020 and 2023, each worth at least €100,000. Few of these projects had more than one bid during the competition.
The investigation began when European Dynamicsa Greek software and IT services company, filed a complaint in November 2023 with the European Commission, which oversees the management of the RRF, alleging that a public tender was biased in favor of certain companies.
When first published, the tender set the budget for a digital modernization project linked to the National Electronic Public Procurement System (ESIDIS) of Greece to 44 million euros, an amount that is several times higher than the cost of a national e-procurement project in other EU countries.
For example, in Ireland cost 4.6 million euros for seven years, in Cyprus 4.5 million euros over nine years and 1.3 million euros in Malta.
Finally, after protests from four companies, the project was split into two tenders with a total budget of €5.7 million and €12 million over two years. The Greek state must also pay for the equipment, software licenses and hosting costs of the project.
There was also a complaint of irregular access by unauthorized accounts to its systems ESIDISaccording to two officials with knowledge of the matter, raising questions about the reliability of a system used to manage thousands of tenders worth billions of euros.
Greece’s digital governance ministry said there had been no breach of the system and that no complaint had been filed.
A Commission representative confirmed that it had received a letter from European Dynamics regarding the ESIDIS tender and had shared all relevant information with European Anti-Fraud Office, OLAF.
“We will continue to deal with any information or complaint we may receive under the powers provided for by the EU Treaties and the RRF Regulation,” the spokesman added.
An official with knowledge of the matter told POLITICO that the EPPO asked the Greek competition commission for the data gathered.
The special problem of Greece
Greece is not the only EU country where there are concerns about how these funds are distributed. In addition to the arrests in the Italian case, OLAF is investigating possible fraud using the bloc’s post-pandemic recovery cash in several EU countries.
However, problems with public procurement seem to be a particular problem in Greece. There has long been widespread criticism in the country of how they are run, with claims that companies are colluding on how and when to apply for public tender, rather than being allowed to compete and offer better value for money.
People with knowledge of the matter report opaque procedures and concessions to the companies. Despite numerous reforms imposed by international creditors in exchange for bailout cash during the country’s debt crisis more than a decade ago, research shows corruption has gotten worse rather than better.
In the technology sector, companies are reporting growing discontent as they fail to win government contracts, while others, some very small in size, have taken on projects worth tens of millions of euros.
Only one offer
POLITICO looked at 110 Greek public tenders funded by the EU, mainly the EU recovery fund, between 2021 and January 2024.
The vast majority of contracts, 101 bids, were awarded to one of the 10 companies being investigated and did not compete with any other bidder. Only nine contests had more than one offer.
Even in tenders where multiple firms bid on one tender, each firm seemingly only bid on a single segment.
When asked for comment, a representative of the Commission said that decisions on the awarding of contracts fall within the competence of the competent Greek authorities.
“Primary responsibility for ensuring compliance with EU and national rules on public procurement rests with member states,” the spokesman added.
Alleged bid rigging
European Dynamics’ complaint was forwarded to OLAF, which forwarded it to the EPPO for investigation into “potential criminal evidence for which the EPPO is competent to conduct an investigation”, according to various officials with knowledge of the case.
In addition to telecommunications companies, IT and software companies were raided Byte, Uni Systems, Netcompany-Intrasoft, Space Hellas, Cosmos Business Systems in both consulting firms Toolbox and Active.
OLAF did not respond to POLITICO’s specific questions. Her press office said: “OLAF does not normally comment on cases it may or may not handle, in order to protect the confidentiality of any investigations and possible legal proceedings that may follow, as well as to ensure respect for personal data and procedural rights. “
According to a report by the European Court of Auditors in 2021, approximately 42.4% of public contracts in Greece were awarded when there was only one tender. In 2011, 15 percent of contracts received only one bid.
The percentage of single-bid tenders in countries with similar populations, such as Portugal, Belgium and the Czech Republic, was 31.6 per cent, 27.1 per cent and 47.8 per cent respectively.
The argument often used by business executives is that the single-bid bidding pattern is due to the fact that there are hundreds of open bidding opportunities. Businesses do not have sufficient resources to participate in each one.
Source: Politico
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