No criminal case over hospital's lost EU funding

The Prosecutor General's Office has decided not to initiate criminal proceedings in connection with the loss of co-financing from European Union (EU) funds in the building project of the Pauls Stradiņš Clinical University Hospital (PSKUS), LETA reported March 28.

The Prosecutor General's Office has completed an investigation into the loss of co-financing from European Union funds in the project "Development of the new A2 building of Paula Stradiņš Clinical University Hospital".

The investigation concluded that external circumstances - the Covid-19 pandemic and the war in Ukraine - as well as a lack of capacity, mainly human resources, on the part of the constructor, Velve Ltd, were the main factors that delayed the implementation of the project.

The hospital's management board was found to have exercised its rights as contracting authority under the construction contract, i.e. instructions to the builder, regular requests for additional information, a binding order, and penalties.

Unilateral termination of the contract was also considered but risks were identified. According to the Prosecutor's Office, taking into account the possible risks, unilateral termination of the contract in mid-2023, when the risk of non-recovery of the European Union co-financing was identified, would have caused even greater losses to the hospital.

Stradiņš Hospital's contract with the construction company Velve was unilaterally terminated on February 13 over delays and miscommunication between the hospital and the construction company, and the site of the new building was taken over on February 21, also unilaterally and with the presence of the police.

Upon taking possession of the construction site, experts found that representatives of Velve Ltd, together with their personal belongings, had removed the project documentation belonging to the hospital from the construction site. The State Police has opened criminal proceedings against the construction company.

The information obtained during the audit shows that the Board did not delay in informing both the Ministry of Health and the Central Finance and Contracting Agency about the progress of the project, the problems identified and the risks to the success of the project. Solutions have been sought to the problems identified.

Taking the conduct of the officials involved in the implementation of the project as a whole, there is no reason to believe that the threshold for criminal negligence has been reached. Criminal negligence does not mean liability for any error, but liability for material errors, but no such errors were found during the audit, the prosecutor's office said.

In light of the above, the Prosecutor's Office did not find grounds for deciding on the opening of criminal proceedings, nor did it see any circumstances that would justify the application of the prosecutor's reactive measures provided for in the Law on Prosecution.

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