The contract for Prokop is even more harmful than previously thought
New information shows that the illegal contract for the construction of the Belgrade railway station building was even more damaging than it previously seemed
The planned procurement of works for the reinforcement of platform beams at Prokop ("Belgrade – Center") [1]shows that the state will bear additional costs in order to make the railway station safe for use. Over the past six years, in exchange for the construction of a station building, the state has ceded to a private partner land whose commercial value, according to the most modest estimates, was at that moment 3.5 times higher than the value of public works[2]. These additional costs could have been covered by the obligations of the private partner if the quality of the reinforcement had been checked earlier. How much they will amount to is unknown at this time, as the state-owned company "Railway Infrastructure" has not published the estimated value of the works.[3]
As Transparency Serbia explained in detail in the submitted initiatives and in the case study "Public-Private Partnerships - Corruption Risks and Open Violations of the Law", instead of implementing the procedure from one of the three existing laws in the construction of the station building in Prokop and the disposal of the surrounding land, the state authorities concluded a contract with the company "Railway City", without applying any of them.
According to the Law on Public Procurement, the contractor had to be selected in a tender, and the land intended for commercial facilities had to be sold at a public auction, as required by the Law on Public Property. Instead, the Republic Property Directorate decided to cede the land for the construction of commercial facilities to a company that would in turn complete the railway station. The contracting of this type of partnership between state authorities and a private company was not carried out by the implementation of the Law on Public-Private Partnership, but in a "procedure" that is not regulated by any act and without competition.
In addition to the Republic Directorate, the Government, the Ministry of Finance, the Ministry of Construction, the City of Belgrade and the State Attorney's Office, as well as the companies Infrastructure of Serbian Railways and Beogradčvor, participated in the preparation of this illegal disposal of public resources. The Public Prosecutor'[4]s Office and the State Attorney's Office [5] could have initiated proceedings for the annulment of this illegal contract, based on a joint initiative of the TS and the Coalition for Public Finance Supervision from 2021, but they did not do so.
That this is a contract that is harmful to the state and the city can be concluded on the basis of available financial indicators and planning documents. The estimated value of the station building was 7.43 million euros. In exchange for performing this work, the private partner, after changes to the urban plans for the station itself and the allocation of replacement land in New Belgrade, was given the opportunity to build 93,157 square meters of business and residential space, which is obviously worth significantly more than the price of the works performed.
[1] https://forbes.n1info.rs/novac/otkrivamo-radice-se-rekonstrukcija-stanice-prokop-zbog-pojave-pukotina-ugradjena-znatno-manja-armatura-od-projektovane/
[2] https://www.nin.rs/politika/vesti/41510/koliko-je-kostala-izgradnja-stanice-prokop
[3] https://jnportal.ujn.gov.rs/plan-eo/20174
[4] https://www.transparentnost.org.rs/index.php/sr/aktivnosti-2/pod-lupom/11907-tuzilastvo-bez-obrazlozenja-odbacilo-inicijativu-u-vezi-sa-prokopom
[5] https://www.transparentnost.org.rs/images/dokumenti_uz_vesti/Inicijativa_-_Državno_pravobranilaštvo_-_Prokop.pdf
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