The scandalous tender for a dredging contract in ‘Yuzhny’ sea port in Ukraine has ended up being cancelled because of the non-transparency and corruption involved of the officials handling it. For the Belgian ‘Jan De Nul’ company, the outcome is not only a resounding defeat, but they also risk to lose its reputation in Ukraine and abroad. As we know, the main reason of the cancelled tender was the scandal connected with the winning proposal from ‘Jan De Nul’s daughter company in Ukraine in offshore schemes.
The scandal has caused many members of Parliament to speak out, giving harsh statements and ultimately resulting in a mandate of the Prime Minister to cancel the tender. In addition, Ukraine’s Anti-Monopoly Committee will look into the situation. Already a huge anti-corruption campaign is being carried out in media.
Such a resonant ending of a huge competition for a contract worth more than 50 million dollars could have made the directors of Jan De Nul’s Ukranian daughter company reconsider the principles of participation in similar tenders. But it seems that nothing has changed. The Ukrainian Sea Port Authority has announced that it will hold this tender all over again using the system of state procurement called “ProZorro”.
Jan De Nul Ukraine, or the ex-winner did not only not admit its old mistake but even decided to take part in the new tender again, without changing anything in its business structure. It means that the company with hidden ultimate beneficiaries is trying to get almost 50 million dollars. ‘We are going to take part in two lots, the biggest ones. But it does not mean that we agree with the decision to cancel the previous tender where we gained the victory’ – Andrei Rozov, Director General of the ‘Jan De Nul Ukraine’ company stated the other day.
It is worth noting that the scandal connected with the first tender was caused by the fact that the “Jan De Nul Ukraine” sold its controlling interest to two Cyprian companies, “Medit Consortium Dredging Company Limited” and “Havoret Invetsments Limited” right in the middle of the competition.
The founder of one of them is a structure called “Tyron Business Holding Corp.“ registered in the British Virgin Islands, which does not reveal information about its owners. Also, it turns out that Andrei Rozov, Director of the ‘Jan De Nul Ukraine’ company is a former assistant of Sergei Faermark who is a Member of Parliament representing one of the most influential fractions in the Ukrainian parliament called “Narodniy Front”.
It became obvious that there were political reasons behind the cancellation of the tender when Sergei Leshchenko, a Member of Parliament, announced that the ‘Narodniy Front’ was blackmailing the Prime Minister. According to Sergei Leshchenko, huge pressure was put on him because of his mandate to cancel the ‘offshore’ tender. ‘Narodniy Front’ called the Prime Minister’s decision treachery and threatened to quit the coalition in Verkhovna Rada.
At the public press-conference dedicated to this tender, Sergei Leshchenko stated that he had both the proof of the connection between the ‘Jan De Nul Ukraine’ company and Sergei Faermark, a Member of Parliament, and the facts showing that the Members of Parliament representing ‘Narodniy Front’ were going to steal a large sum of money from the state tender with the help of the offshore chains of the ‘Jan De Nul Ukraine’. ‘It has also been decided in advance how the money will be shared in the end’ – Leshchenko said.
It is important to point out that the National Anti-Corruption Bureau of Ukraine (NABU) has been investigating the scandalous tender. The investigation still continues but the intentions of the ‘Jan De Nul Ukraine’ company to take part in the renewed tender without revealing its ultimate beneficiaries proves that the authority of Jan De Nul’s daughter company in Ukraine has an influential lobby in the Ukranian power circles, which can make sure that neither the NABU or any other bodies, including the principled position of Vladimir Omelyan, the Minister of Infrastructure, could influence the ‘right’ outcome of the competition.
The Chief of the Ministry of Infrastructure of Ukraine was the one who initiated negotiations with the Prime Minister after Sergei Leshchenko’s statements after which the first competition was cancelled. Right after its cancellation, Omelyan was accused in many biased articles in Ukrainian media, and according to experts, influential people could this way try to make the Minister of Infrastructure become more loyal or even depose him.
All these factors indicate that the renewed tender will hardly be held transparently. No wonder that the other participants don’t rush to apply. Ihor Tynynyka, Director of the ‘Van Oord Ukraine’ company which also took part in the first tender, reminded that his company had proposed the lowest price – 36 million dollars, and also the shortest period of the work execution.
Though despite this, the company had been disqualified, and the victory was given to Jan De Nul’s company whose proposition cost 4 million dollars more and with a more time-consuming execution time frame. According to Tynnyka, ‘Van Oord Ukraine’ has not decided yet whether it will participate in the repeated tender, because it has all the reasons to doubt its impartiality. ‘We are still discussing this question. There is no guarantee that we will take part’, the Director of ‘Van Oord Ukraine’ stated.
He reminded that Ukrainian officials know how to circumvent the new system of state procurement called ‘ProZorro’. This spring, there was already a precedent in the ‘Yuzhny’ sea port which proved that any system can be broken. During the course of the tender for procurement, the authority disqualified 12 participants at the same time, and ‘gave’ the victory to the structure which did not even take part in the competition. Only public outrage managed to counter the officials decision.
According to Ihor Tynynyka, the same could happen again with the dredging tender. And it would not come as a surprise because Ukrainian officials are used to getting away with their crimes. Though it will be very unusual for the famous European brand of Jan De Nul which is a big reputable company. But its Ukrainian branch really only consists of two people and was created specifically for this tender. “It makes us doubt, why does the ‘Jan De Nul’ company situated in Belgium and using offshore companies, open its branch in Ukraine? And who is actually the owner of the enterprise?” – Tynynyka said.
According to experts, a European business marketing itself as transparent and fair, loses these attributes, turning into a corrupt knot interwined with Ukrainian officials. And if people in Ukraine could still get away with such behavior, reputable and civilized European businesses such as the ‘Jan De Nul’ company should take responsibility – how could such a reputable brand descend into doing such business activities? And how is it possible to deal with a business seduced by corruption?