Only 60 770 900 GEL Was Spent on IDPs from Allocated 176 646 450 GEL

Gela Mtivlishvili

The Georgian Young Lawyers Association (GYLA) published preliminary report of the monitoring they carried out to assess the construction activities of shelters for the IDPs. The report states that only 60 770 900 GEL was spent from the allocated 176 646 450 GEL on the IDPs. As a result of the monitoring lawyers exposed several facts of inefficient activities and unreasonable expenditure of state funds.

The GYLA carried out the monitoring in the frame of the project “Transparent International Aid to Georgia” of the Coalition founded by the Fund Open Society-Georgia. The coalition aimed to support the transparency of the international financial aid, raising the accountability of the government and increase of civil participation in the process.

Within the project, the GYLA monitored the legal aspects of the constructed and reconstructed houses for IDPs by local authorities, Municipal Development Fund and Ministry of Refugees and Accommodation.  Those activities were carried out by state funds and aid allocated by the Brussels Donor Conference for Georgia. Reportedly, on October 22, 2008, based on the decision made at the Donor Conference in Brussels, international financial institutions allocated 4, 55 billion USD to Georgia for following three years. Priorities of the aid were: transport infrastructure, energetic projects and construction of shelters for IDPs.

Tamar Kordzaia, lawyer for the GYLA: “In order to improve living conditions for internally displaced people, we requested information about their expenditures from every institution which were implementing and controlling the activities. They are: Municipal Development Fund, Ministry of Refugees and Accommodation, local self-governments, Ministry of Finances, Chamber of Control, Agency for State Purchases. We encountered some problems while getting the information.

-What problems did you encounter?

-There were cases when the abovementioned institutions did not release public information at all; or they release later and incompletely. We have appealed to the court regarding these violations against 7 institutions. It was impossible to get documents from Senaki, Khashuri, Dusheti and Marneuli district administrations because all their documents were sent to the prosecutor’s office. According to the official information, the preliminary investigation was launched under Article 132 (misappropriation, unreasonable expenditure) and Article 332 (abusing power) of the Criminal Code of Georgia.

According to the documents we hold, after the war in August of 2008 4 603 buildings were built, reconstructed and repaired for IDPs. Among them, 3 023 houses were reconstructed and 317 were repaired. 1 263 houses were built for IDPs. Having studied the agreements in details, we found out that it was impossible to estimate exact amount of repaired houses because the agreements did not provide the number of rehabilitated houses. They should be calculated in accordance to the defect protocols and expenditure documents; however these documents are incomplete in most cases.

-What violations were discovered? How correct were state purchases?

-Municipal Development Fund, Ministry of Refugees and Accommodation and district administrations have breached Article 9 of the Law of Georgia on State Purchases. More precisely, almost every agreement was changed after the competition ended. It means the purchaser did not have exact information and documents on the amount, sort and needs of the implemented activities. For example, one of the tender packets exposed that on March 26, 2009 Mtskheta district governor requested to stop repair-works on the two-storied house in the village of Mukhrani because it was privatized by the Georgian Tradition Ltd based on the concrete selection. It must be noted that by March 26 the MDF has purchased project-expenditure documents, announced competition and signed the corresponding contract. Based on the President’s resolution the house was privatized since November 19, 2008. Apparently, the MDF prepared for purchase activities and spent money on private properties.

Most contracts between the MDF and one person are about construction of new houses for IDPs in Gori, Kaspi and Kareli district in Shida Kartli region. Those contracts are about the construction of 1 263 houses. The most important circumstance is unimplemented or incompletely and poorly implemented activities for what money was spent. For example, 450 houses were built in the villages of Berbuki, Shavshvebi and Khurvaleti in Gori district. According to the contracts each house should have had cattle-shed however it was not done at all. It must be noted that 640 GEL was envisaged as a sum needed for the construction of each shed that made 288 000 GEL in total. Despite that, the contractors received the total sum.

-You said amendments and additions were done to almost every contract. Did the agreement price increase as a result of the changes?

-It must be underlined that in the purchase agreements the price was increased and implemented activities were reduced later. An applicant initially offered very low price for the scheduled activities, consequently, won the competition and then increased the price during the activities. There were cases when applicant offered the price less at 50-40 %. For example, Block-Georgia Ltd won one of the competitions; they offered 1 117 246 GEL though approximate price for the due activities were 3 507 428 GEL; thus the applicant required only 30% of the estimated price in order to win the competition. Later, the Ltd increased the budget at 44 %. There are cases when the initial price of the winning company is increased at 50-70 %. Sometimes, the final budget exceeds the estimated price of the activities and representatives of the project organization, those who were responsible for financial documents, justify the increase in the budget.

-What violations did you find on the local authorities?

-District administrations have signed contracts with one person in accordance to the president’s decree. It demonstrated that prices are not mentioned in the contracts at all or more is paid than it was initially envisaged. Purchaser organizations did not monitor the implemented activities at all. For example, the price of the contract signed by Bolnisi district administration is estimated according to the percentages of the implemented activities; however the documents are not complete and it is impossible to estimate the price.

Besides that, according to the transfer documents on the construction of 9 cottages in the village of Poladauri, individual entrepreneur “Besarion Gabidzishvili” received more money than it was envisaged in the contract. Consequently, the total transferred money was 49 951 GEL. Besides that, according to the activity protocols, the price of the activities carried out by “Besarion Gabidzashvili”
 Was 81 350 GEL. Despite the amount of the allocated funds, the houses are damaged, the roofs are destroyed and rain is leaking into the roofs. There is no public school in the village; the road to the village is seriously damaged. The government of Georgia justified its negotiations with one person by being restricted in time. However, nobody lives in the cottages yet.

-As far as I know the situation is not better in the buildings which were reconstructed for IDPs in other districts?

-We can allege that the state spent money unreasonably on the activities in the village of Shaumiani in Marneuli district. The walls in the first building are cracked; wall-papers were put up incorrectly. The roof was not changed for fourth building; water from sewerage system is leaking on every floor.

-Did you appeal to law enforcement office to react to the violation of law, the ministry for Internal Affairs, Monitoring House etc? It is fact that the heads of these departments were leading to build houses for IDs and their rehabilitation.

Young Lawyers Association should study 90 Tenders around the coalition project. On this stage we have studied only 20 tenders. We appealed to the prosecutor office and also monitoring house .As I mentioned above prosecutor’s office began investigation on several facts, for example, he passed the sentence in Khashuri District. What about monitoring house, they informed us that they have already checked up the part of the documents, but they do not have the final conclusion. Legally it is not mentioned here that the leaders of law enforcement office were monitoring to build houses and the process of rehabilitation.

-Legally it is not mentioned, but for example, George Botkoveli, the head of Kakheti Region monitoring house department and Levan Bejashvili, the leader of the department were leading the process of rehabilitation of houses for IDPs.

Vano Merabishvili, the minister for Internal Affairs was leading to build houses for IDPs in Gori District, but it is not mentioned in documents.

We asked to the ministries of Finance, Refugees and Accommodation, also Municipality Development Fund and representatives of local self-government to make comment about the violation of law which became known after the monitoring of Young Lawyers Association. We could not get the comment from the ministries. Public Relation Service of Municipality Development Fund promised that competent person will make a comment about the report. Later the representative of the Fund connected us by phone. According to him, the public perceived the explanation of the fund as their justification, which they did not mean necessary.” We do not need justification”, announced the representative of the Municipality Development Fund.

Zaza Dekanoidze, the governor of Marneuli District:”We spent more funds than was appointed in the budget. It is impossible that sewerage system is spoilt and water is leaking and also it is impossible to paper room on the sharpened walls. In one of the block of flats we did not change the room because it was not necessary”.

Soso Laliashvili, the governor of Bolnisi District:”I was not the governor of Bolnisi District when the houses were building for IDPs. So I do not know what violations of law we talk about. I was in the village of Poladauri two months ago and I did not see personally that the cottages were destroyed or damaged. Monitoring House studied this issue and it did not find the violation of the law”.