Road building cartel to result in million-euro repayment to EU

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After the Competition Council identified a road construction cartel, the Central Financial and Contract Agency (CFLA) concluded that the State would have to reimburse part of the EU funding allocated to the projects affected by the cartel, totaling EUR 1.02 million, according to the CFLA's statement on June 16.

The Agency concluded that of the seven procurements in which competition supervisors identified the impact of the cartel, two Latvian State Roads procurements, both of which were won by the Road Administration, were co-financed by EU funds:

  • the 2016 rebuilding of the regional road P5 Ulbroka–Ogre (section 20.54-25 kilometers);
  • the 2017 reconstruction of the national main road A4 Rīga bypass Baltezers-Saulkalne (Stage 12.48-19.66 km).

The total amount of funding for these projects is €10.25 million, including the European Regional Development Fund (ERDF) and the Cohesion Fund (CF) co-financing total of €8.7 million.

Since 4 and 5 tenderers have participated in the procurement and the Competition Council did not identify the involvement of the contracting party, the 10% share of the funding provided for in the guidelines will have to be repaid: €1.02 million (including ERDF €338,000 and CF €533,000).

The recipient of financing in projects is the Ministry of Transport, on behalf of which the State stock company “Latvian State Roads” acts.

The projects have been completed and the funding has been paid out, so the CFLA will start recovering ineligible expenditure from the beneficiary.

 

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