ANRMAP completed check-ups started early February on the attribution of sanitation services contracts by Bucharest district mayoralties and the general mayoralty.
The regulator concluded laws were breached when certain sanitation contracts for Bucharest were extended. Moreover, the regulator said in a statement, the effective regulatory frame explicitly stipulates that, by March 2008, local public authorities were obliged to order the reorganization of the public sanitation service, with the attribution of new contracts, public works concession contracts and services concession contracts.
One of the examples provided by the regulator was the contract concluded on January 10, 1997 between the General Council of Bucharest, represented by general mayor Victor Ciorbea, and S.C. RER-RWE ECOLOGIC SERVICE S.A. Bucharest (REBU), for sanitation services in Bucharest. The initial contract duration was set for ten years, with extension rights.
According to the regulator, upon expiry, the contract was to be extended by default for another ten-year period, unless the mayoralty notified the company six months ahead of its intention not to further extend the contract.
"On 08.07.1999, The Bucharest General Council issued decision 163 stipulating the reorganization of the public sanitation service, with the organization of public procurement auctions for districts 2, 3 and 6, while in districts 1, 4 and 5 the service was to continue to be provided by S.C. REBU S.A. Following this decision, in 1999, the Bucharest mayoralty concluded contracts with S.C. SUPERCOM S.A. (contract no. 1128/25.10.1999 on sanitation services in district 2 – for a 5-year period, with extension rights), S.C. ROSAL SERVIS S.R.L. (contract no. 24165/09.11.1999 on sanitation services in district 3 – for a 5-year period, with extension rights) and S.C. URBAN S.A. (contract no. 1153/01.11.1999 on sanitation services in district 6 – for a 5-year period, with extension rights)," the regulator said in its statement.
Regarding the contract concluded between the Bucharest General Council and S.C. REBU S.A., the regulator noted that in the interval 2001 – 2002 contracting parties were changed in an additional act to the initial contract, concluded as a novation contract, replacing the beneficiary with the Bucharest District 1 mayoralty and the Bucharest District 4 mayoralty.
"The same thing happened with the contracts signed for districts 2, 3 and 6. the District 1 mayoralty, notified REBU on 28.07.2006 on its intention not to extend the contract expiring on 18.08.2007," the regulator said.
The district 1 local council decided to organize public procurement auctions, for which REBU filed an appeal, which was rejected by the National Council for Appeals (CNSC), but later admitted after the sanitation firm took the rejection up with the Bucharest Court of Appeals. The Court of Appeals cancelled the CNSC decision in October 2007 and decided to cancel the attribution procedure. End last year, the district 1 mayoralty organized a new auction, and procedures are under way.
The regulator noted the situation of mayoralties of districts 2, 3, 4 and 6 is different from that in district 1, a series of additional acts were signed, extending contract duration.
The regulator said the mayoralties of districts 2, 3, 4 and 6 were obliged to terminate contracts with services providers upon expiry and to organize auctions to procure sanitation services.
The regulator added that the extension of initial contracts after the coming into effect of public procurement laws, without the organization of auctions, breaks the law.