St. Petersburg authorities illegally concluded state contracts for $47m

St. Petersburg authorities illegally concluded state contracts for $47m
All state purchases were held without a tender as part of the conclusion of a contract on exceptional grounds Photo: E. Razumny / Vedomosti

The damage from illegal public procurement could amount about 200 million rubles ($3.4m) only at a guess.⁠

The St. Petersburg Anti-Corruption Center Transparency International - Russia claims that the city's unitary enterprises concluded 117 contracts with the authorities for a total of 2.7 billion rubles ($47m). The damage from such a procedure can be about 200 million rubles only at a guess.

From the table compiled by the anti-corruption center, it can be seen that Lensvet made 45 contracts, most of all under this scheme, but in terms of money the St. Petersburg Information and Analytical Center (more than 1.5 billion rubles - $26.2m), the motor transport establishment Smolninskoye (460 million rubles - $8m) and Lengiproinzhproekt (404 million rubles - $7m) are hands-down winner

All these state purchases were held without competition in the framework of the agreement conclusion on exceptional grounds. Such schemes of non-transparent state contracts allow turning point 7.1 of the Law "On State Unitary Enterprises of St. Petersburg". Meanwhile, the unified information system in the procurement sector reports that, on average, competitive procedures reduce starting prices in St. Petersburg by 9%. This means that the damage from contracting on exceptional grounds could exceed 230 million rubles ($4m).

Anticorruption crusaders appealed to the Federal Antimonopoly Service (FAS) and the State Financial Control Committee demanding declare all contracts concluded with St. Petersburg Administration after March 1, 2016 illegal. In addition, activists appealed to the FAS to issue the Legislative Assembly of St. Petersburg an order to eliminate the violation, which was expressed in the fact that the regional law contradicts the federal law. FAS officials reacted promptly and the Prosecutor's Office prepared a draft of a protest against the inaction of deputies.

Earlier, at the request of Transparency International, the FAS ordered the Legislative Assembly of St. Petersburg to cancel the contract for 439 million rubles ($8.6m), according to which 60 vehicles were to transport deputies and their assistants for six years. In addition, FAS officers considered similar contract with the City Electoral Commission illegal.⁠

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