EU grant – sharing options

Protests are underway in Prague demanding resignation of Prime Minister Andrej Babiš. It ought to be noted that the Czechia Prosecution Office charged the head of the state, dollar billionaire with illegal misappropriation of a part of EU subsidy for ends of his own family company. Right after that meetings started clamoring against A. Babiš. The Czechia Prosecution Office revealed that in 2018 the government allotted a $2,24 mln EU subsidy to the conglomerate company Agrofert founded by A. Babiš as far back as in 1993. In the meanwhile, the funds were intended for suibjects of small and medium business. Besides, there is collision of interests.

The point to be emphasized here is that procuracy authorities of Azerbaijan turn a deaf ear to journalist investigations that reveal misappropriation of millions by top officials. In the meantime, there are lots of corruption facts in Azerbaijan where functionaries are engaged in plundering public properties.

At the same time, a rhetoric question arises why a report of the Audit Chamber (AC) http://sai.gov.az/upload/files/ICRA-2018-FINAL(1).pdf in charge of public property disbursing refers to 10 mln manats expended in 2018 remaining silent on what goals had the money been spent on? Earlier (in 2016-2017), analyzing grant costs worth 16,5 mln manats, the AC mentioned just a percerntage point in respect of forecast. In other words, the AC says nothing about intended use of these funds, about abuses or defalcations. However, a peek into official announcements and notifications on purchases due to “Grant program of region development support” financed by the EU and implemented by the Ministry of Economy (ME) reveals numerous unanswered questions.

Also, the AC alleges that in 2018 the Ministry of Economy expended 10 mln 70, 000 manats at the expense of the EU-Ministry of Economy grant in defiance of the public. Yes, in 2017 the Ministry was free-and-easy with grant funds within the framework of the same program. The analysis is indicative that on numerous occasions the Ministry of Economy ignores many requirements of law in charge of public purchases. For four years the Ministry of Economy fails to submit an annual report in breach of transparency. Granting this, information of its activity within the framework of the Grant program is limited.

One must bear in mind that the text of the program is inaccessible for the public and experts. To judge by procurement notices, the program consists of 5 components: “Support of development of competitive branches in regions”, “Support of measures in state regulation of entrepreneurship”, “Increased capacity of the Ministry of Economy”, “Support of management of special economic zones”, “Support of SEZ development”. In so doing, it remains unknown how long the program will last.

Let”s look at purchases arranged by the Ministry of Economy within the framework of the EU Grant program. In 2018 the Ministry of Economy held a tender for building a material-technical foundation of the Vocation training center under LLC “Sumgayit chemical industrial park”. A winner of LLC was a consortium consisting of LLC “Engineering services Olympus” and LLC “Bizlinkz”. However, the Ministry of Economics did not disclose to the public what it received from the consortium and how much it would pay him under this contract https://economy.gov.az/article/bi-ldi-ri- sh/29367.

Last year, a consortium arranged by LLC “Bis Co” and LLC “SRS Consulting” won a purchasing contest under the project “Increased potential of the Ministry of Economy on social-economic development of regions” https://economy.gov.az/article/bildirish07022018/28889. It must acknowledged that the value of the contract was announced on public purchases portal – 1,998,798,9 manats. However, the public misrecognized purposes and objects of the consortium, since no appropriate information about tender has been posted.

Regretfully, the public had not previously been informed about a work meant to done at the expense of the EU grant. Thus, in 2017 within the framework of the “Grant program of support of regions development” the Ministry of Economy held a tender for purchase of cars “Sedan”, “Utility vehicle”, “Utility-pickup” and “Service utility” https://www.economy.gov.az/article/regionlarin%20inkishafina%20destek%20qrant%20proqrami%20cherchivesinde%20i%20qtisadiyyat%20nazirliyi%20uchun%20sedan%20yolsuzluq%20yolsuzluq%20pikap%20ve/28678.

Cars were to be delivered to the Ministry within 6 months. However, neither number of cars, nor funds for their purchase or name of winning company are not known so far. The same year, the Ministry of Economy concluded 3 contracts with the consortium consisting of LLC “Ekvita Consulting”, LCC “Arpa Consulting”, as well as with LLC “Bis Co” and LLC “SRS Consulting” with total cost of 9. 075,900 manats.

A year before (2016) the Ministry of Economy paid 5.707,400 manats to four companies and their consortium for purchase of equipment and software, for control over food safety and implementation of regional programs of the European commission. Three years passed since then, and the Ministry appealed to the companies for purchase of equipment https://economy.gov.az/article/azerbaycan-respublikasinin-i-qtisadiyyat-nazirliyi-regionlarin-inkishafina-destek-qrant-proqrami-cherchivesinde-i-qtisadiyyat/30131.

By the way, the Ministry made no attempts to reveal equipment to be purchased even despite the fact that the current legislation calls for announcing the list of goods purchased at the expense of public funds. This year the Ministry of Economy announced two tenders for the project “Support of development of competitive areas in regions”. Note that a subject-matter of the one of them, abstractedly though, is clear enough https://economy.gov.az/article/elan_qrant_program/30108. The point is about support of vine-growing, large grain-growing and seed-growing farms. In spite of the fact that a personality of beneficiaries is unknown, the purpose of the tender is obvious. As for the second purchase, the tender commission forgot to clarify https://economy.gov.az/article/i-qtisadiyyat-nazirliyi-regionlarin-inkishafina-destek-qrant-proqrami-cherchivesinde-regionlarda-reqabet-qabiliyyetli-sahelerin/29918.

However, the situation remains uncertain. Note that successfully engaged in the Ministry of Economy purchases, LLC “Bis Co” and LLC “SRS Consulting” have presently been involved the Ministry of Labor and Social Security of Population (MLSSP).

One must bear in mind the fact that the mentioned companied together with two other partners (LLC “Az Nest” and LLC “Aqri Kon”) received last year 29.119,500 manats for implementation of the Ministry” “Self-employment programs”. Mass media wrote that the companies cited above maintain certain ties with Minister Sahil Rafig ogly Babayev and his deputy Vusal Zakir ogly Nasirli. Of interest is the fact that the Ministry concluded these contracts explicitly, without tenders.

In the meanwhile, the facts are indicative that these assumptions are grounded. Prior to 2018 the two functionaries worked at the Ministry of Labor and Social Security of Population (MLSSP): S. Babayev as deputy Minister and V. Nasirly as deputy head of the manager of the Department of cooperation with international organizations. In his autobiography V. Nasirly points out that he worked in the private sector https://www.linkedin.com/in/vusal-nasirli-071528101/. Indeed, under a register of commercial organizations, he worked a director of LLC “Prizma Consulting” set up in 2009, Baku. Mass media report on Nasirly”s kin relations with LLC “Bis Co” managers. Thus, Vusal Nasirly was born in Imishly region of Azerbaijan. Note that Fariz Huseinly, a director of LLC “Bis Co”, is also a native of the same region. It is worth pointing out that F. Huseinly is also a director of LLC “Venera” set up in 2005, Imishly. Fariz”s father, Heydar Yusifogly Huseynov is one of the founders of LLC “Bis Co”, as well as a manager of two other companies – LLC “Mühərrik” in Imishly region and LLC “Meridian Plus” in Baku at “Bis Co” address.

It is worth reminding that domain bis.az registration data refer to srs.az domain probably meant for “SRS Consulting” company. At present, the said domain is inactive.

Below-cited is another example of synchronization of winners of purchasing competition of the Ministries of Economy and Labor and Social Security of population: LLC “Bizlinkz” as winner of the Ministry of Economy purchasing procedures in August 2018. Note that in December the same year it received 45,386 AZN for career-guidance consulting services rendered to the State Employment Service under the Ministry of Labor and Social Security of population.

It must be acknowledged that the information quoted above raises suspicions regarding the use of public funds for personal ends in terms of possible conflict of interests between the two functionaries.

In terms of Azerbaijan where information is dispersed in a limited way the journalistic investigation cannot prove conflict of interests and the use of official authorities for personal ends. It is the responsibility of law-enforcement bodies to carry out more serious investigation, as is the case with Czechia.