Construction of Sewage System in Istočna Ilidža – “Radis” Ltd. Wins Tender, Contractor and Supervisory Body

“Radis” Ltd. is carrying out works on the construction of a sewage system at two locations within the Istočna Ilidža municipality. They were the only ones to bid on the tender and got the job, even though they offered a price higher than the estimated value of the work. Moreover, they themselves conducted professional supervision over the work execution.

By: Sanja Vasković

Certain parts of the Istočna Ilidža municipality, despite being urbanized, still lack a sewage system. Last year, the Istočna Ilidža municipality issued two tenders for the construction of sewage collectors in the Vojkovići and Kasindo settlements.

Undermining Competition – “Radis” Ltd. the Sole Bidder

The tender for the construction of a sewage system in the Vojkovići (Krupac) settlement was announced in June of last year. The estimated value of the work was 106,000 KM without VAT. By the deadline for submitting bids, only one bid had been received, and it was from “Radis” Ltd., with a value higher than the estimated amount, specifically 120,000 KM without VAT, or 140,400 KM with VAT.

Decision on selecting the most favourable bidder.

Given that at the time the contract was concluded, the amendments to the Law on Public Procurement had not come into effect yet, the contract could be concluded at a price higher than the estimated value if the contracting authority was able to secure the funds.

“However, it should be noted that this method is often abused by estimating the value lower than the actual one, thereby eliminating competition from the bidding process. Only the bidder who knows that additional funds will be provided can submit an offer higher than the estimated amount”, says Damjan Ožegović from Transparency International for SPIN Info.

The fact that there weren’t many bidders who could fulfil the specified conditions is evident from the following data. Namely, the tender documentation stated: the bidder is required to provide at least 1 certificate for completed works with a total value of 100,000.00 KM issued by the works’ investor. This could certainly be a limiting factor that restricts competition, but it’s also a factor that recommended the same company for a new tender.

Indeed, “Radis” was once again the sole bidder a month later for the construction of a sewage collector in the Kasindo settlement. The municipality awarded the contract to the mentioned company again, this time for the work in the amount of 91,000 KM without VAT, or 106,000 KM with VAT.

Being Their Own Supervisory Body

Apart from carrying out the construction of the sewage system in Istočna Ilidža, where the deadline was 45 days from the commencement of work and which still isn’t fully completed almost a year later, it’s absurd that “Radis” Ltd. oversaw its own work.

However, as Transparency International points out, the Law on Public Procurement regulates only market competition and not matters related to the actual execution of the works.

“Undoubtedly, the described situation could potentially represent a conflict of interest where the impartiality of supervision could be questioned, and therefore the quality of the work being performed”, Ožegović reminds.

For the professional supervision services of the construction of the sewage system in Vojkovići, they received an additional 5,000 KM directly from the municipality through a direct agreement.

Contract Implementation, RADIS as the Supervisory Body.

These aren’t the only direct agreements that this company received from the Istočna Ilidža municipality in just the past year. Although with a relatively modest budget of around 12 million KM, this municipality concluded eight direct agreements with “Radis” Ltd. in 2022, totalling 47,441 KM without VAT. When combined with the planned amount for sewage system works, it exceeds the 200,000 KM that this local community allocated to a single company.

“Radis” Ltd. is a company that has been receiving contracts from public institutions and organizations for years, both those headed by the ruling party and the opposition. Projects worth millions have been carried out in the area of the Istočno Novo Sarajevo municipality, and in the last three months alone, “Radis” has secured contracts from the Jahorina Olympic Center (297,500 KM), Pale Municipality (142,710 KM), JZU Special Psychiatric Hospital Sokolac (288,000 KM), and more within the area of the City of Istočno Sarajevo.

Unresolved Property-Legal Relations Hinder Project Completion

Although the contracts have been executed, the sewage system in the mentioned settlements is still not completed, as confirmed by the mayor of Istočna Ilidža, Marinko Božović, to SPIN Info. In 2023, the Istočna Ilidža municipality planned an additional 213,000 KM for works on wastewater collectors.

When asked about the fact that the same company applied for both tenders related to the construction of sewage collectors, Mayor Božović says that everything is in accordance with the law and procedures.

“As for the sewage system that was constructed at the end of Ravnogorska Street, precisely near the Green Bridge, the latest interim situation arrived at the municipality a few days ago. The contractor will complete the work very soon. After that, there will be arrangements for resurfacing this part of the road, as there are certain unresolved property-legal relations, not to mention strained neighbourly relations, that prevent the contractor from carrying out the contracted works”, explained the mayor regarding the unfinished project.

Contract Signing – Mayor Božović, representative of RADIS company, and representative of citizens’ group.

Until then, residents drive on dug-up streets in the settlements, waiting for sewage systems in the 21st century, despite regularly paying for the services.