Frauds, the greatest risk regarding public acquisitions

Bucharest hosted a conference on public spending, in which leaders in the field have expressed their point of view on this subject.

They talked about pros and cons of public acquisitions in Romania. The biggest risk when it comes to public acquisition is the temptation to direct the money to one side or the other, because when you have money in your hand you are very tempted – and considering anyone would be - to send, to direct money into someone you know.

State companies complain that when they have to bid alongside private companies, they do not feel competitive because of the bureaucracy and the weight wherewith decisions are made by the state.

The law must be respected, said finance minister Daniel Chiţoiu, but that does not mean that it can be modified, so should be ensured a better balance between the speed of decision making and the efficiency of public spending.

There must be avoided situations already known where different ministries or local authorities have bought items at prices even ten times higher than the real ones.

"The Ministry of Finance, the government is open to all your proposals to modify the current provisions of Ordinance no. 34, so that we can create a legislative framework for public acquisition, transparent, predictable and fair to all participants in the public acquisition system, regardless of who is the entity acquiring", says Daniel Chiţoiu.

Overcrowding rules "is not a solution"Also, they sought solutions to the public acquisition procedure, but certainly overcrowded auction rules is not a solution, says the Economy Minister Vosganian.

He advocates the privatization of state companies and gave the example of two companies, one of state, another one private, which both have the same activity object.

The private one, says minister, will develop easier, will get a higher profit and faster than one of the state, which must obey the endless rules and face bureaucracy.

"While there are these imperfections and also our inability to solve them on short term, we must sometimes seek the solution elsewhere, in privatization, in creating a system of fall-up for public spending and why not, an economic formula, for example, when we spent on infrastructure it would be sufficient to oblige contracts in their turn to have insurance and insurance companies in this way will be the main supervisor of quality, that an insurance company will not allow that on a road, instead of asphalt, to put cheese", said Vosganian.

Also, the fraud was one of the topics discussed Thursday, defrauding public funds, but also those from European funds is a phenomenon encountered in particular at local authorities, says the President of ANI, Horia Georgescu.

"The conflict of interest became pregnant in the past two years, also reported within the European Commission reports on justice because the phenomenon is actually mainstream.

"In my opinion, the issue of conflict of interest in public acquisition is also reflected in European funds and public acquisition of the national budget”, said Horia Georgescu.

To empower these institutions, but also to discourage the practices generally met where a decision factor favors at an auction a firm close to it, by the end of this year will be implemented a system for verification of those who are participating in these auctions, so that they know who is likely to find themselves in a situation of conflict of interest and then to take measures.

If they do not take these steps to avoid conflicts of interest, competent authorities will be notified as well as the requirement to tighten sanctions.

Translated by Alexandra-Diana Mircea
MTTLC, Bucharest University