KEK's loss-making sales

The contracts for the sale of metal waste have come to the accounts of the Energy Corporation of Kosovo with a loss. At least since 2017, KEK has recorded losses from scrap sales contracts. Fraud, non-fulfilment and termination of contracts, criminal charges and lawsuits are synonymous with these tenders.

The last contract was signed in December last year. KEK has signed a contract with the company against which it filed a criminal complaint and filed a lawsuit under the suspicion of fraud. Two previous contracts of the same nature failed to be realized by the company "DT Mining" SH.PK in 2019 and 2020. The last one in 2023 in the value of about 800 thousand euros was won together with the company "Metal Mix" SH. BC

This contract, which is being implemented, has also become part of the Police investigation.

The researcher of the "Demokraci Plus" organization, Egzona Kozhani, also says that there are problems with the management of KEK contracts. During the monitoring of contracts in KEK, she noticed that there are problems in the stage of evaluation of offers, but also in the stage of implementation of contracts.

"KEK should appoint professional evaluation commissions, which properly evaluate the offers, or take measures - find out what the problem is, because these cases are ending with complaints to the PRB when the offers are not properly evaluated, when in advance, there were all the criteria that must be met, which were defined in the tender file", said Kozhani.

But how did the procedures of this procurement activity flow?

The tender was opened at the end of 2020 and in the following year the NT company "Migjeni" was initially announced as the winner.

"In 2020, the scrap tender was announced. In 2020, we competed as a company and KEK declared us the winner. Masandej has complained to the PRBO about this company 'DT Mining'... This one was a bit more expensive since it gave two types of prices, for the same item - one 47 cents, the other 25 cents", Bucolli announced.

The group of economic operators "DT Mininig" SH.PK and "Metal Mix" SH.PK have submitted a request for reconsideration to the Energy Corporation of Kosovo on February 9, 2021. This group of economic operators claimed that KEK has not correctly implemented the Regulation for sale and disposal of assets. The complaint was dismissed as unfounded by the contracting authority. One of the reasons was the fraud in the previous contracts by "DT Mining". As stated in KEK's justification, the assessment for fraudulent information was based on two preliminary activities in 2019 and 2020, where due to fraud, KEK was forced to cancel two more contracts for the sale of scrap metal.

According to this document, KEK has a special report from the Internal Auditor regarding the frauds that this company made in the previous contracts, where as a result there were punitive measures against KEK workers with suspension from work. KEK has not allowed KOŠA access to this report.

"DT Mininig" and "Metal Mix" LLC had addressed the matter to the Procurement Review Body. The hearing for this case was held on March 3, 2021. As a justification for the elimination of this operator, KEK officials, in addition to previous experiences with "DT Mining", also mentioned the bidding with two different prices for the same product in the new tender. KEK had also assessed this as fraud.

KEK's reasoning did not convince the Procurement Review Body and turned this procurement activity into a re-evaluation.

This institution, otherwise known as the Court of Tenders, has assessed that it is not enough to file a lawsuit against an economic operator, but a court decision is needed to prove such a thing.

In order to comply with the scope of the Public Procurement Law, according to the PRB, the conduct must be ascertained by a court, administrative agency or organization for the implementation of standards of professional conduct.

Not being included in the "black list"

In "Demokraci Plus" they show the steps that contracting authorities should take, in case companies make false statements or falsify documents.

"If there was a basis for falsification of documents or false declaration, KEK wanted to make a request to PRB to disqualify this economic operator and put him on the black list, which is called this mechanism. Being blacklisted prevented this economic operator from participating in contracts for a period, depending on what the PRB decides. The period allowed is up to 1 year. This is also a penalty, I call it a little faster for the company, because there is no need to wait so long until the court's decision is taken", said Egzona Kozhani from "Demokraci Plus".

KEK has not shown why they did not take such a step.

And, after the reassessment, the KEK has recommended for the contract the group of economic operators "DT Mininig" SH.PK and "Metal Mix" SH.PK The decision was contested by NT "Migjeni".

Owner Migjen Bucolli says that the winning company did not have a license. This is confirmed in an e-mail provided by KOHA. There, the company requested that this criterion be removed.

After nearly 2 years, on September 8, 2022, the KEK procurement office informed the operators that due to a complaint, it will suspend this procurement activity until a future decision.

In the responses of the Kosovo Energy Corporation, it is stated that they initially canceled this procurement activity, but after successive complaints from the dissatisfied party, the PRB forced it to sign the contract in December of last year. As for the previous contracts, they admit that this company has failed to fulfill them.

In the written answers, in KEK they said that this economic operator has realized only 50% of one contract and has withdrawn from the implementation of the rest, while the other contract has been terminated due to the fact that he failed to deposit the funds, as foreseen by contract. The value of the two contracts of 2019 and 2020 was over 1 million euros.

Regarding KEK's claims of fraud, Laureta Ulaj, official for information and media monitoring at the Basic Prosecutor's Office of Pristina, has confirmed through written answers that investigations are underway.

Meanwhile, in the Basic Court of Pristina, they have requested additional data of the defendant. But the answers have been missing again.

In the "Democracy Plus" organization, they say that for any deviation from the contract, the manager of the contract should be initially held responsible.

"Another problem, but one that appears at another stage, that is, after the signing of the contract, is the issue of contract management, which appears during the implementation of the contract. In these cases when we deviate from the terms of the contract, or when we have, as they may be, delays in implementation, or as they may be, departure from the dynamic plan or any other type that implies departure from the terms of the contract, it is the direct responsibility of the manager to make a report on these delays and therefore, if it is a violation at that level, the contract should be terminated and the insurance of the contract should be executed", said Kozhani.

The winner with debts to TAK

"DT Mining" and "Metal Mix" were in debt to the Kosovo Tax Administration from 2018.

In the Energy Corporation of Kosovo, they have not shown why they ignored the Law on Public Procurement and the criteria defined in the tender file when they selected this group of economic operators.

TAK confirmed the issue of debts in the answers it sent about a month after KOHA filed a complaint against this institution in the Information and Privacy Agency.

Although they did not show the amount, TAK emphasized that the debt of these companies was for the period 2018-2021.

The Law on Public Procurement prohibits economic operators from participating in procurement activities or execution of any public contract if the operator is late in paying any contribution for social security or tax in Kosovo.

The issue of the debt was also specified in the tender file "Eligibility of economic operators", where it was stated that a certificate signed by the Tax Administration was needed that the economic operator in question is not late in paying taxes at least until the last quarter of the year before submitting the application.

In the Tax Administration of Kosovo, they have shown that the subjects in question have concluded an agreement for debt payment in installments and are still in the process of paying them according to the agreement, but they have not indicated the date when the debt programming agreement was made. TAK officials have confirmed that these companies also have new debts.

Regarding the three contracts for scrap and the debt to TAK, since January 10, the company "DT Mininig" LLC has not answered TIME's questions, nor have they answered the phone number listed in the Agency. for the Registration of Businesses in Kosovo (ARBK).

Meanwhile, Migjen Bucolli says that about the last contract he gave evidence to the Police, to the Unit for Economic Crimes and Corruption.

"The police have received the statement since I gave it, since I am giving it to you and to them, that this case seemed unfair to me", Migjen Bucolli - owner of NT "Migjeni" - emphasized.

Regarding this case, KOHA has addressed questions to the Kosovo Police, but has not received an answer.

KEK with a history of fraud even in the sale of 2017

The sale of scrap has not gone well for the Energy Corporation of Kosovo even in previous contracts. A report classified as confidential by the Internal Auditor of KEK, provided by KOHA in February, has confirmed the violations of the contract for the sale of scrap, about which the newspaper "Koha Ditore" had reported nearly seven years ago. This report dated October 31, 2017, which followed the "Daily Time" investigation of July 28 of the same year, published in three sequels, talks about scale fraud, copper devaluation and non-registration of metal cargoes. As stated in this document, the damage caused to the economic operator "ECO-METAL" Sh.PK & "REC KOS" Sh.PK during transportation on five different dates alone is 62.240 kg of iron.

The report also concluded that the winning companies of this contract have started transporting scrap without completing the letter of authorization, as stipulated by the contract. Further in this document it is stated that the project manager of this contract has allowed the measurement of metals outside KEK's scales without consulting with KEK's executive procurement office and KEK's management. This happened from 07.04.2017 to 19.05.2017, while the implementation of the contract started on 31.03.2017. During that period, 28 measurements were made, where only the coordinator of the commission from KEK was present. And in the contract it was specified that the project manager should be present.

As stated in the Internal Auditor's report, a measurement sheet dated 06.06.2017 was provided, where the weight of the truck without load was greater than that of the truck with load by 4.840 kg.

Egzona Kozhani from "Demokraci Plus" says that this issue is very specific and the manager appointed for these contracts must know the nature of the contract and must also bear all legal responsibilities in case such cases are not reported. According to her, KEK in these cases has failed to sell the scrap.

"The need for the Energy Corporation of Kosovo to sell the assets that are no longer needed for KEK is great, I believe. KEK's failure to take measures to implement these contracts and the sale of assets creates an obstacle in the collection of funds from these funds, consequently also the deposit of these funds in the coffers of the Contracting Authority and consequently prevents it from implementing the plans it had for the future. However, this problem is not only in the sale of assets. There are contracts that are being delayed for investments, for purchases and for various supplies that are very essential for the smooth running of KEK's work and also for those cases when there are such complaints and no preventive measures are taken by KEK itself. then the entire procurement plan, the annual procurement plan is postponed", said Kozhani.

At the time when "Koha Ditore" reported about this contract as it was being implemented, sources within KEK had said that the winning economic operator declared 350 thousand kilograms of metals withdrawn from KEK, while the real amount up to that time, according to sources, it was 1 million 800 thousand kilograms.

For the sale of scrap, KEK only knows the prices of the contracts it has signed, but it has not been able to know the loss that has been caused to it.