City Hall Controversial over Its Cypress Tender
17 May, 2012
City Hall Controversial over Its Cypress Tender

Tbilisi City Hall accused Greenservice Ltd who had won the tender on procurement and planting 120 cypresses in Tbilisi downtown of cheating after a non-governmental watchdog questioned adequacy as well as transparency of the tender price. City Hall canceled the questioned tender contracts and promised to put the culprit company’s tender papers under investigation. Experts assure that not the accused company but the City Hall itself is responsible for the inadequately held tender.



Planting cypresses on Baratashvili Street in the

downtown of Georgian capital, which cost GEL 225 thousand to Tbilisi government was ardently discussed through social networks by the end of past April.
However, it was not the price that triggered the discussion but the discontent of Baratashvili street residents who were unhappy with the fact that, as the cypresses were being planted, the trees that they had planted themselves earlier, were being cut down. The discontented people probably did not know then about the price, which  Tbilisi government paid for procurement of the trees and service  that attracted attention of International Transparency Georgia (IT Georgia), a non-governmental organization, as inadequately high. TI Georgia researched the issue and found out that there was only one bidder at the tender for the tender technical requirements referred to a specific type of cypress -“Cupressus Pyramidalis from three plants” and Greenservice LTD founded by former City Hall top officials was the sole company in Georgia capable or willing to provide this type of plants. And consequently Greenservice’s initial bid was identical to GEL 225 thousand put by the City Hall as the tender preliminary cost and since Greenservice was the sole bidder, this amount did not change subsequently. The Tbilisi City Hall and Greenservice siged a contract in March under which the City Hall paid Greenservice GEL 990 for each plant — a total of GEL 118 800 for 120 plants.
According to the Georgian company registry, Greenservice is owned by Lasha Purtskhvanidze, former deputy mayor of Tbilisi and former head of the Old Tbilisi district administration, and Koba Kharshiladze, the former deputy head of the same district administration. According to the information that we collected from the electronic system of state procurement, Greenservice has won 17 tenders and has received over GEL 4 million from the state since 2010 (the electronic system does not contain information about the tenders conducted before 2010).
TI Georgia trailed down other similar tenders announced by the City Hall and found out that for comparison, City Hall by contract signed with another supplier on 30 January of 2012 bought 5 thousand plants of various type (cypress, tilia, maple, cedar, pine, ash) for GEL 30 as a maximum price per plant or by 33 times less than in the case of the Baratashvili Street tender.
“Had the City Hall purchased similarly-priced plants for Baratashvili street, the total cost of the purchase would have been GEL 3600 instead of GEL 118 800 and the city would have saved GEL 115 200,” TI Georgia informed. According to Erekle Urushadze, TI Georgia expert, they did not get any explanation from the City Hall what was the reason Tbilisi City Hall decided to plant such expensive trees on Baratashvili Street. Although, an expert in plants interviewed by TI Georgia said that there does not exist any sort of cypress  grown “from three plants” as the questioned tender required that makes TI Georgia presume that this special requirement was built in the tender terns to tailor them to one certain company.
To Georgian Journal City Hall explained that the 33-fold price difference between cypresses bought in January and March of this year for GEL 30 and GEL 990 respectively was quite reasonable for the GEL 30 worth cypress plant was of 2-2.5 meter in height and designed for planting forests as well as for planting spaces in residential districts under population requirement or any other planting purposes.
“Cypresses bought on the ground of tender held in 2012 for Cupressus Pyramidalis from 3 plants CL100+160 [a plant grown from 3 plants] and with the tender cost of GEL 990 was 4 meters in height and is a decorative tree sort and its planting is reasonable for improvement the city outlook, that makes certain districts more attractive to local population and tourists alike. Commensurately, similar resurfacing has economic value too. And based on the arguments that cypress is an evergreen plant, planting the questioned cypresses on Baratashvili Street have ecological importance for this certain part of the city is especially overloaded by both passengers and transport turnover, ” City Hall commented assuring that thus the price did not increase 33 times in fact.
“You have incorrect information to this end for it is obvious that the compared plants radically differ in shape, volume and height as well as age. Accordingly, it sounds logical that their price should be different,” City Hall elaborated to GJ on May 7, 2012.
However on May 9 Gigi Ugulva, Mayor of Tbilisi, having held a special counsel to probe into the trumpeted cypress issue, thanked TI Georgia for its interest,  accused Greenservice in cheating, canceled the tender results and promised to put Greenservice papers under investigation at law-enforcing body. He stressed that the tender itself was held in full compliance with the law however.  
“Based on the research of Tbilisi City Hall, although tender was held in full observation of all due tender procedures Green Service purchased the product below the objective price that was not depicted in the papers submitted at the City Hall. That means Green Service Company did not meet obligations assumed against the state,” the City Hall said in its announcement on May 9, 2012.
To avoid similar incidents in future City Hall plans to set up a special division responsible to research the market price of procurements and control it as strongly as possible. 
Davit Narmania, Executive Director of the Caucasian Institute for Economic and Social Researches, believes the blame is with the City Hall not with the allegedly culprit Greenservice. He finds creation of a new special market-price researching service redundant too.
“According to law, the City Hall procurement department is already fully responsible for the beforehand market price analysis and proper tender procedures and this possible new service cannot prevent similar incidents in future,” Narmania said. “If the accused company had no competitor at the tender why was it supposed to turn down the proposal? It is a commercial entity focused on profit and no law can punish this company for this tender, any other company would act similarly in its place. It was City Hall department for planting and resurfacing who based on the research had to exactly define what it needed and the City Hall procurement service had to research the market price afterwards.”
Irakli Lekvinadze, believes City Hall tender cancelation is just a pre-elective move as if it cares for democratic values for there are plenty of more non-transparently held tenders like the most trumpeted inbound micro-bus service and replacement old press-kiosks by new ones that still remain in force.

 

 

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