Due to delays in the implementation of the works, the Traffic Administration imposed penalties on the contractor in only two cases, while the Capital Projects Administration did not do so once. At the same time, by signing an annex, both state administrations enabled an increase in the agreed price of works for one project each, which increased the value of the contract by 1.3 million euros, according to the analysis of Institute Alternative.

The data comes from an analysis of twenty projects financed by the administrations for traffic and capital projects, for which they receive money from the state capital budget.

The implementation of the largest infrastructure projects, which are managed by the Traffic Administration, was mainly followed by annexes to the basic contracts, which often extended the deadline for the execution of the works, and which were signed most often in the last days before the originally defined deadline for the completion of the works.

Of the ten analyzed projects of the Traffic Administration, only three were completed without signing the annex. One contract was terminated, while a total of eight annexes were signed for the remaining six projects.

The deadline for the execution of works was extended for four projects, of which the deadline for one project was postponed twice, through contract annexes. For three projects, the annexes related to an additional advance payment, while in one case the annex increased the originally agreed price of the works.

On the other hand, the Capital Project Administration signed five contract annexes for ten analyzed projects. Of these, one annex related to the increase in the contracted price of the works, and all the others to the extension of the deadline for the completion of the works.

The analysis referred to ten tenders with the highest value each, which were contracted by the Traffic Administration and the Capital Projects Administration, and according to the data from the website for electronic procurement, the deadline for the execution of the works was tentatively defined by the contract for the end of last year or the beginning of this year. In addition to the tender documents and contracts, contract annexes, data on payments and penalties, deadlines for project implementation, the date of the contractor’s introduction to work were analyzed, and the data was obtained through a request for free access to information.

47 thousand euros from the collection of penalties to the Traffic Administration

In the contracts concluded by the Traffic Administration, it is stipulated that the contractor is obliged to pay the client 0.1% of the contracted price of all works for each day of overrun, if he does not complete the works within the stipulated time due to his own fault.

“The amount of the agreed penalty cannot exceed five percent of the agreed price of the works,” it is written in the analyzed contracts.

The Traffic Administration collected the penalty in the case of the reconstruction of Mojkovačka Street on the part of the road Cetinje – Njeguši in the amount of 7,235 euros. Penalties followed after annexes to the contract extended the deadline for the completion of the works on two occasions. With the basic contract worth 602 thousand euros, the company “Indel inženjering” undertook to complete the works by May 13, 2022. However, on May 9, just four days before the deadline, the date of completion of the works was moved by an annex to the contract by an additional 35 days, i.e. to June 17. On the last day for the completion of the works, a new annex to the contract is concluded, which moves the deadline again, this time by 25 days.

The justification for the extension of the works in both cases is, as stated in the annexes, the obstruction and blocking of the works by the locals due to unresolved property relations that are under the jurisdiction of the Royal Capital Cetinje, as well as changes in the project documentation and the impossibility of carrying out works on certain parts.

The works were finally completed on July 24, 12 days late, so the Traffic Administration charged penalties in the amount of 7,235 euros.

The deadline extension was also approved for the Bukovik 2 landslide rehabilitation project on the Petrovac-Podgorica highway. The work worth 1.31 million euros was awarded to the company “Intermost” from Podgorica.

“The contractor wrote to us with a proposal to extend the deadline for completing the works on the building. Referring to the mentioned items in the letter, which listed the previous suspensions of work due to necessary changes to the project, we believe that it is justified to extend the deadline for the completion of the works, given that the delay in completing the original deadline is not the contractor’s fault,” states the opinion of the Supervisory Service, which also follows controls the execution of works on the construction site.

The original deadline for the implementation of the works – September 17, 2023, was extended by an annex from September to October 20, 2023, based on changes to the project documentation.

“After the completion of the works and the final calculation, the contractor was charged penalties in the amount of 39,526 euros based on the delay,” stated the Traffic Administration.

The deadline has also been extended for the project of works on the rehabilitation of the walls on the main road Ribarevina – Dračenovac. The contract worth 1.43 million euros was concluded with the company “Construction and Consulting” on December 26, 2022, and the deadline for the completion of the works is defined as 180 days from the moment of the introduction of the contractor to the job, which is the end of September 2023.

However, with the annex signed by the Traffic Administration three days after the expiration of the original deadline, the new deadline was defined for October 28, 2023, and unusual weather conditions and the existence of a high-voltage energy cable were cited as the basis, which is why the works had to be carried out mechanically, instead of manually. As stated by the Administration, the works on this project have been completed.

An additional million was granted to “Bemax” by the annex

In November 2022, the Traffic Administration concluded with the construction company “Bemax” a contract worth 6.4 million euros (including VAT) for the reconstruction of the Mataševo-Kolašin regional road, with a deadline of eight months for the contractor to start work, i.e. from the handing over of the building permit, technical documentation, decision on the appointment of the Expert Supervision. “Bemax” was introduced to the business on April 20 last year, which means that it had to finish the work by December 20.

However, on that very date, the Traffic Administration concludes an annex to the contract with “Bemax”, which increases the total price of the works to 7.43 million, i.e. one million euros more than the originally agreed price. At the same time, the annex extends the deadline for the execution of works until February 23 of this year, which is two months more than the originally planned deadline.

In the annex, it is stated that due to unforeseen circumstances caused by bad weather conditions and heavy traffic load, there were significant changes in the condition of the slope and pavement structure compared to the state expected by the project, which caused the modification of the project documentation, which increased the value of the works.

The Law on Public Procurement defines that the value of the basic contract can be changed by up to 20%, without conducting a new public procurement procedure “when the need to change the contract arose due to circumstances that the client could not foresee at the time of concluding the contract”.

The reconstructed Matashevo-Kolašin road with a length of 8.5 kilometers was officially opened on January 31 of this year.

The Traffic Administration, which is headed by Radomir Vuksanović, said that the final expert supervision report and technical inspection are currently being prepared.

“After the completion of the technical review, the situation related to the withheld funds will be revealed,” they stated.

The Government enabled the payment of additional advances

The Traffic Administration signed another annex with “Bemax” in connection with this project at the end of December 2022, which refers to the approved advance payment in the amount of 641 thousand euros.

The basic contract defines that the advance payment amounts to five percent of the total price of the works.

The advance payment was approved by the Government of former Prime Minister Dritan Abazović on December 8, 2022, after the contractors submitted requests regarding the problems of the impossibility of fulfilling the contractual construction obligations due to the drastic increase in prices in the construction sector.

Based on that decision, the Traffic Administration paid to “Bemax” an additional advance of 650 thousand euros, for the first phase of the reconstruction project of the main road Podgorica-Tuzi, the total value of which is 5.37 million euros. Previously, as defined by the contract, an advance in the same amount was already paid.

Also, according to this decision of the Government, the Traffic Administration approved an advance payment of 59,678 euros to the contractor “Crna Gora Put” for the investment in the resurfacing of the asphalt pavement on the main and regional roads in the territory of Podgorica. The total value of the contract was almost 600,000 euros, and they did not provide for an advance payment.

The works on these two projects were completed within the agreed period, the Traffic Administration stated.

Only for three projects, and the smallest in terms of value, out of the ten analyzed, there were no contract annexes. These are projects for the resurfacing of asphalt for Pljevlja and Podgorica, and the construction of retaining walls on the reconstruction of the Dinoša-Cijevna Zatrijebačka road. The works for these projects were completed within the agreed deadlines.

You can view an overview of the ten analyzed projects of the Traffic Administration here.

The Capital Projects Administration did not charge penalties

The analysis of the ten largest projects of the Capital Projects Administration showed that in one case an annex was signed, which increased the price of the basic contract, while the other annexes extended the deadlines for the completion of the works. The subject of analysis for the Capital Projects Administration were contracts that were signed before 2023, and which defined the deadline for the execution of works up to 12 months from the day the contractor was introduced to the job.

The signed annex to the contract, which increased the price of the basic contract, related to the project of creating a conceptual solution, the main project and the execution of works on the construction of the access plateau at the location of the departure station of the Kotor – Lovćen cable car.

This job worth 2.75 million euros (including VAT) was awarded to the company “Briv construction” at the end of September 2022. However, with the annex to the contract from August last year, the Capital Projects Administration signs an annex with the contractor that contracts “the performance of unforeseen works”, so the price of the basic contract increases to 3.06 million, or by 11%.

The Administration for Capital Projects stated that 2.83 million euros have been paid to the contractor for this project so far, and that the works have been completed.

Deadlines are being extended due to poor project documentation

As for the other analyzed contracts of the Administration for Capital Projects, work has been completed on another four projects, while the remaining five have not yet been completed.

In addition to the plateau, “Briv construction” also completed work on the construction of the road for the cable car, and the value of the project was 1.6 million euros. The works on the rehabilitation of the road Maočići-Velimlje, Petrovići and the road Kruševica, Vrbanj, Orijen were also completed within the agreed period.

The largest project of 7.2 million euros is the construction of the Mental Health Clinic, which is being carried out by “Fidija”. The contract stipulated that the works would be completed at the end of January this year. However, with the annex dated January 29, the deadline was moved to July 15. During the execution of the works, the Ministry of Health as a user, as stated by the Capital Projects Administration, expressed the need for additional harmonization of the project documentation in order to put the facility into operation with the specific needs of the ministry.

“For the stated reasons, there was an extension of the deadline for the completion of the works, not through the fault of the contractor, which was also confirmed by the statement of the expert supervision,” explainedfrom Capital Projects Administration.

The work has not been completed for the second largest project in terms of value – the reconstruction and construction of the Faculty of Architecture. The work worth 3.4 million euros is being carried out by the company “Stambeno”, which was launched on March 1 last year. The deadline for the completion of the works, according to the contract available at CEJN, is set for March 1 of this year. This deadline was moved to September 1 with an annex dated February 27, and the reason was again bad project documentation.

“Given the omissions and deficiencies in the revised project documentation that was submitted to the Capital Projects Administration, and on the basis of which the contractor performs the works, the user initiated an amendment to the main project with the designer, which led to the prolongation of the works.” As this prolongation was not caused by the fault of the contractor, which was also confirmed by the statement of the expert supervision, the annex to the contract was concluded,” said the CPA.

The multimillion-dollar hangar construction projects at the “Knjaz Danilo” Military Airport and the “13.jul” barracks, carried out by the “Eurozox” company, are also still not finished, although the contracts for these two projects were signed at the end of 2022. The basic contract for the construction of a hangar for the accommodation of lightly armored vehicles and a workshop for the maintenance of motor vehicles in the “13.jul” barracks stipulates that the works on the 2.1 million euro project will be completed on September 11 last year. Only on February 22 of this year was the annex signed with the company “Eurozox”, which moved the deadline for the execution of the works to July 15 of this year.

The Capital Projects Administration said that the deadline was extended because at the beginning of the works, the existence of underground electrical and energy installations on the building was established, the relocation of which is carried out according to CEDIS procedures, as well as due to numerous deficiencies in the project documentation.

The existence of underground installations that needed to be relocated was an obstacle to starting work on the project to build an aircraft reception and servicing facility at the “Knjaz Danilo” Military Airport in Golubovci.

The Administration states that because of this, there was a delay with the introduction of the contractor into the work, the deadline for the completion of the works expires only after the contractor is introduced into the work, which is 210 days.

As stated by CPA, most of the contracted works were completed within the deadline, but due to non-conformity of the project documentation and minor subsequent requests of users/investors “whose goal is the full functionality of the built facility and the execution of new positions of the works, the deadline for the completion of the works was extended through no fault of their contractor, which was also later confirmed by the statement of expert supervision”.

Although the deadline for the completion of the works for this project was extended, the Administration did not state that they had signed the annex to the contract allowing this.

The deadline for the construction of the Science and Technology Park facility was extended by an annex dated May 20. The contract for this project was signed at the end of 2021 with the company “Novi Volvox”, but, as stated by CPA, the works were prolonged due to numerous omissions and deficiencies in the project documentation.

“The works are in the phase of functional testing and the planned completion date until the end of May has been extended, considering that the user has not ensured the connection of the building to the water and electricity network, which is necessary in order to complete the functional testing of installations, systems and equipment”, they said from CPA.

The science and technology park was officially opened on June 11.

“Regarding the part of the request that refers to the payment of penalties, we point out that no penalties were charged for any of the projects listed in the request,” the Capital Projects Administration announced.

You can view an overview of ten analyzed contracts of the Capital Projects Administration here.

Terminated one contract each

The administrations for traffic and capital projects terminated one signed contract each.

The work for the reconstruction of the Tuzi-Mataguži road was awarded in December 2021 to the “Tehnoput” company, and the contracted value of the works was 3.36 million euros, with a deadline of 300 days from the day the contractor was introduced to the job.

“The project has not been started, the contract has been terminated, also in connection with this project, the agreement on the implementation of works between the Traffic Administration and the Municipality of Tuzi has been terminated due to non-resolution of property legal relations by the Municipality of Tuzi,” stated the Traffic Administration, without specifying whether there were costs on that basis.

The Capital Projects Administration terminated the contract with the company “Krušo” for 750 thousand euros in connection with the construction of the road for the needs of the bus station in the Bare – Igalo settlement.

The Administration said that in connection with this project, the Municipality of Herceg Novi concluded a contract with the contractor “Entext inženjering”, and that the project is being implemented in accordance with the contract that the municipality signed with the Capital Projects Administration.

“The contractor was put into work on October 15, 2023, while the expected completion date is the end of November 2024,” they stated.

The original terminated contract signed in June 2022 stipulated that the works be carried out within a year from the introduction of the contractor to the job.

 

Author: Ivan Ivanović

 

 

This investigative article was produced within the Project “Procurement under spotlight – Making Watchdogs Work!”, with the support of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro within the MATRA Rule of Law program. Project aims to empower and motivate watchdogs to combat corruption and undue influence in public procurement.