Tbilisi City Hall carries on cooperating with Greenservice - საერთაშორისო გამჭვირვალობა - საქართველო

Tbilisi City Hall carries on cooperating with Greenservice

18 April, 2013


Last year Tbilisi City Hall accused entrepreneurs of dishonest actions and terminated agreements with them. Yet these same entrepreneurs   still participate in City Hall tenders and receive hundreds of thousand GEL from the city's budget.

Last year in April, Transparency International Georgia (TI Georgia) reported on the tender carried out by Tbilisi City Hall for the procurement of landscaping services for Baratashvili Street. The tender was won by the company Greenservice, which undertook an obligation to plant 120 cypresses on Baratashvili Street, and would receive from City Hall GEL 990 per sapling. Our organization cast doubts on the honesty of the procurement process due to the high price paid for the saplings, as well as the links between the owners of Greenservice and Tbilisi City Hall.  As a result Tbilisi City Hall invalidated the tender, terminated the agreement executed with Greenservice, and transferred the case to law-enforcement agencies for examination. City Hall claimed that Greenservice had behaved dishonestly and had concealed the real value of the provided goods.

Later, in July 2012, Greenservice was put on the black list of the State Procurement Agency.  This was due to Batumi City Hall’s application, which claimed that the company had only partly fulfilled the agreed obligations. (It should be noted that on the Agency’s black list the company is named as "Abelia LLC” rather than Greenservice, since in June 2012 the company changed  name and functioned for two months under this title before reverting to Greenservice in August 2012). Pursuant to the Law of Georgia on the "State Procurements", a company included in the black list is prohibited from participating in the state procurement process for one year. Hence, Greenservice cannot submit proposals in the state tenders until July 2013.

Nevertheless, a company named Greenservice+ continues to participate in the process of state procurements. Pursuant to the Entrepreneurial Registry data, the Director of Greenservice+ is Lasha Purtskhvanidze (former Gamgebeli of the Old Tbilisi District), while the shareholders are Lasha Purtskhvanidze, Koba Kharshiladze (former Deputy Gamgebeli of the Old Tbilisi District) and Tariel Kiknadze. According to the same Registry data, Lasha Purtskhvanidze is also the Director of Greenservice, and the same Purtskhvanidze and Kharshiladze are Greenservice shareholders. The legal addresses of these two companies are identical as well.

Despite the fact that Greenservice+ is clearly driven by the same group of entrepreneurs who created Greenservice, the company now black listed by  the State Procurement Agency and  banned from the state procurement process, this company is still participating in tenders, and doing so quite successfully. More interesting still, is that the agreements with Greenservice+ are executed by Tbilisi City Hall - the very agency that just one year ago accused this same group of businessmen of dishonest behavior and requested the law-enforcement agencies to probe into their activities.

The first three months of this year has seen Greenservice+ win five tenders, with a total amount of over half a million GEL. In all five cases tenders were announced by Tbilisi City Hall. The agreements of two of the tenders have already been executed, while the other three are pending execution.

Greenservice’s guilt in the landscaping tender on Baratashvili Street is a separate inquiry. Although last year Tbilisi City Hall stated that it had sent the case materials to the law-enforcement agencies, the results of this investigation are still not public. In any case, the next logical step would be to probe into the official responsibility of the City Hall's representatives who planned and conducted this tender (as they, and not the providers, are the ones responsible for procuring the goods and services for a reasonable price). A company may be held responsible if an illegal transaction between the procuring agency and the provider is revealed. However, in such case the culpability of the City Hall's representatives would be even graver. In the Baratashvili Street case there were real indications that City Hall employees had tailored this tender to the interests or capabilities of a specific company. 

Nevertheless, in May 2012 Tbilisi City Hall chose to completely shift responsibility onto the provider company, meaning none of the City Hall's officials (representatives of the City Services for Municipal Procurements and the Ecology and Landscaping) were held responsible. It is remarkable that in view of this position taken by City Hall, it still found it reasonable at the beginning of 2013 to execute the agreement with the same group of businessmen (essentially with the same Greenservice) on the purchase of services worth hundreds of thousands of GEL.

In a broader context, it is obvious that this case exposes a serious gap in the state procurement system. In particular, persons managing the companies on the black list of the State Procurement Agency can now freely dodge around sanctions imposed on them and continue participating in the procurement process by using other corporate names. This systemic gap in fact makes the black list mechanism redundant.

Author: Transparency International Georgia