No Public Procurement Law implementation for „Moravski Corridor“

Transparency – Serbia (official chapter of Transparency International) emphasizes that special law that is being adopted for the purpose of constructing „Moravski Corridor“ will make more damage to the unity of legal order, and especially to public procurement system in Serbia. Draft Law  which is under the parliamentary debate as of today, regulates matters already regulated by the existing laws of the Republic of Serbia on expropriation, public procurements, public – private partnership, planning, taxes and customs. Thus continuing dangerous trend of adopting special rules related to one project only, as in the case of „Sothern Flow“ and „Belgrade Waterfront“. If the Government feels that laws are of poor quality (e. g. related to period of expropriation) then it should propose for their amending, and not to create special regulations for single case only.

Beyond any doubt is the argument of the Government of Serbia that building of high-way that will connect cities of Kruševac and Čačak is overly necessary. However, Serbia already has regulations on expropriation, construction standards, as well as the laws that regulate choosing of contractors or companies for some sort of form of public-private partnership, as this will be the case. On the other hand, draft of special law envisages that choosing of  „strategic partner and closing of the contract on planning and construction, as well as choosing of professional supervision over works, doesn’t fall under regulations on public procurements.“ Criteria and method of election will be regulated exclusively with by-law act adopted by the Government in 30 days deadline.

Furthermore, it is unusual that elaboration of the draft law states that choosing of strategic partner „is made in a way that guarantees legal safety“, through method „that is legally efficient, and completely transparent“, „respecting the Constitution and procedures“, and that is should „have positive influence to various international indexes of democracy and transparency“. It is unclear what this optimism is based on, having in mind that procedure of electing strategic partner will be regulated with the by-law act of the government, whose content is still unknown, and that implementation of the existing Law on public procurements, that would otherwise provide transparency, non-discrimination and legal protection is explicitly excluded.

The only thing that can be an advantage of this law is that violation of legal system is slightly less than with signing of direct intergovernmental agreements on loan with parallel engaging of contractors. We remind that, in such a way, one month ago, loans were approved for building of railway Novi Sad – Kelebija and high-way Preljina – Požega, and these jobs, that are worth 1.686.000.000 USD, were simultaneously awarded to Chinese companies.  When it comes to „Moravski corridor“, with estimated value of 800 million of Euros, Government has already signed „Memorandum on cooperation during the project construction“ with companies „Behtel“ and „Enka“  from the USA, i.e. Turkey, that still doesn’t represent legal obligation to award this job to these companies.

From the standpoint of Serbian international obligations in the area of public procurements and public-private partnerships, and especially having in mind Stabilization and Association Agreement with the European Union, provisions of the article of two special laws, according to which during the construction „domestic materials and equipment will be used and domestic contractors will be hired in a relationship that will be determined with contract on planning and work implementation“ could be disputed. Namely, on the basis of this Agreement, preferential for domestic bidders is canceled on November 2018.