One of the laws crumbling the public procurement system repealed
The repeal of the law on line infrastructure[1], which opened up a huge space for discretionary decision-making and had the potential for corruption, is good news after years of crumbling public procurement systems. However, it is essential to emphasize that by deleting this law, only one of the channels for contracting the most valuable jobs without a tender is abolished, while the possibility of directly negotiating jobs under the auspices of interstate agreements remains.
The Government submitted to the Parliament a proposal for a law on the termination of the law on line infrastructure, with the explanation that the decision to repeal this law was made due to the objections of the European Commission that the provisions of the law are not in accordance with the legal acquis of the European Union, especially in part related to public procurement and the selection of a "strategic partner".
The Government and MPs knew about these objections even three years ago when the law was adopted. In January 2020, Transparency Serbia indicated the harmful consequences that its adoption would have on the public procurement system.[2]
This law provided the opportunity for the Government to, "in case of urgency and threat to the realization of a project of particular importance for the Republic of Serbia", decide that the rules of public procurement are not applied to the project or certain phases and activities of the projects at all, but "a special procedure for the selection of a strategic partner". The law provided that criteria for selecting such a strategic partner would be prescribed for each new project, thus leaving the Government with the possibility to adapt those criteria to the "desired" contractor. This significantly increased discretion and, at the same time, significantly reduced competition and transparency in relation to the general system of public procurement.
Worse, these rules were applied to the most valuable projects because public-private partnerships worth more than 50 million euros and other projects, by special decision of the Government, were designated as projects of "special importance". We do not have data on the total value of the projects implemented "with the help" of this law. It is not stated in the explanation of the proposed law, nor are these projects included in the annual reports on contracted procurement in the Republic of Serbia. According to the data from the regulation database, the decrees for the selection of a strategic partner were passed in connection with the construction of bypasses around Valjevo, Svilajnac and Kragujevac, the construction of the road from Kragujevac to Mrčajevci and the modernization of the railway from Subotica to the Hungarian border. Although repealing this law is undoubtedly a good thing, there is still a possibility of avoiding the application of the rules of the Law on Public Procurement through the conclusion of interstate agreements or through the adoption of special laws for individual projects (as was the case with "Belgrade on Water" ). The danger of this happening is all the greater because the repeal of the special law is justified solely by the fact that it is contrary to EU requirements and not due to the realization that it is wrong to collapse the anti-corruption rules for contracting and for the most valuable jobs.
Although repealing this law is undoubtedly a good thing, there is still a possibility of avoiding the application of the rules of the Law on Public Procurement through the conclusion of interstate agreements or the adoption of special laws for individual projects (as was the case with "Belgrade Waterfront"). The danger of this happening is all the more significant since the repeal of the special law is solely justified because it is contrary to EU requirements and not due to the realization that it is wrong to crumble the anti-corruption rules for contracting and that for the most valuable jobs.
[1] Full name: Law on Special Procedures for the Implementation of the Project of Construction and Reconstruction of Line Infrastructure Structures of Particular Importance to the Republic of Serbia
[2] https://www.transparentnost.org.rs/en/ts-and-media/press-isues/11192-special-law-discharges-most-valuable-public-procurement
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