Thursday, 18 July

Tender Winners are Decided in Advance

Editor's note: The middle class in Armenia is failing to take shape. This is not because of our laws; it is because of illegal actions by the government and the corruption that has contaminated every sphere. Everything in Armenia is concentrated in the hands of a group of people, mainly officials from different agencies of the executive branch, members of parliaments, and oligarchs who do business under the government's supervision.

Here is one story about how people with power deprive ordinary people of the right to earn a living and force them to seek work outside Armenia.

There are 51 centers that check and control automobile emissions in Armenia, nine of them in Yerevan. In addition to a routine annual inspection, all automobiles must be checked at special CO ( Carbon Monoxide) Centers. According to our data, there are about 300,000 cars in Armenia today (80% of which in Yerevan). The charge for each CO inspection is 1,500 Drams. Thus, car owners pay these 51 centers a total of approximately 450 million Drams ($1 million) each year. In a country like Armenia, this is a serious amount of money, so it is comes as no surprise that the atmosphere surrounding the recent tenders for licenses to operate these CO Centers was heated.

From 1983 to 2005, Center #1 for Checking and Controlling Automobile Emissions of the Kentron District of Yerevan (there are two centers in Kentron) was operated by the Automobile Enthusiasts Center, Ltd. In December 2005, the agency in charge of regulating this sphere, the Ministry of Environmental Protection - based on the Law on Licensing and in accordance with new regulations enacted by the government-announced tenders for licensing for all 51 centers in the republic. Eight companies, the Automobile Enthusiasts among them, took part in the tender held for Yerevan Kentron's Center #1.

The tenders for seven CO Centers - five in Yerevan, one in Abovyan and one in Charentsavan-were awarded to a company called Milta Ltd. The chairman of Milta is Murad Guloyan, owner of the Kentron TV Station, member of parliament from Arindj, and business partner of another MP, Gagik Tsarukyan. (Indeed, Guloyan is only the de jure owner of Kentron TV-Tsarukyan is the station's de facto owner.)

We wondered whether Milta, Ltd. had any experience checking auto emissions, and in general, what the field of their expertise was. Armen Ghambaryan, Milta's deputy director, told us, "We haven't handled this type of activity thus far. We work in various spheres - commerce, manufacturing."

They have never handled this type of activity and yet they won the tender and were at once granted licenses to operate seven centers.

The license for Center #1 in the Kentron District was awarded to Unigraph-X, Ltd. "This is the first time we are engaged in this type of activity. In general, we do many things. What difference does it make?" said Unigraph-X director Mushegh Potikyan. Last March this company, again unexpectedly, was awarded the license for sterilizing stray dogs in Yerevan.

According to our sources, the company is backed by a senior government official.

The Automobile Enthusiasts Center, which had run the CO Center for more than twenty years, was notified that it had lost its license.

Article 29, Paragraph 3 of the Law on Licensing states: " The decision to deny a request to be granted a license must cover distinctly specified reasons and legal grounds for the denial." Following the tender, the company tried in vain to obtain a text explaining why they had been denied the license.

"I wrote to the Ministry requesting a copy of the decision outlining the reasons we were denied, but I was I was told that since we lost the tender we didn't have the right to that information," said Gohar Gabrielyan, director of the Automobile Enthusiasts Center. She was informed that the explanations for denials were provided only when a company was originally awarded a tender, but then for various reasons the decision was subsequently reversed. However, neither the Law on Licensing nor the new regulations enacted by the government contain any clause to that effect.

Yet Avtonoruyt, Ltd., which was originally awarded the tender for the CO center in the town of Noyemberyan but then had the decision revoked, only received notification of the denial. So no matter whether a company initially loses or wins a tender, it cannot obtain the text of the decision specifying the reasons and legal grounds for the denial.

Avtonoruyt Company applied for licenses to operate CO centers in Yerevan, Vanadzor, Goris and Gyumri, and Noyemberyan. It won the December 20, 2005 tender for the Noyemberyan CO center with a unanimous majority: 6 votes in favor, with none against. But later it was deprived of permission to operate the center.

Again, no written explanation was provided. Our letters we sent to the minister of environmental protection asking why Avtonoruyt had lost its license were in vain as well. The response letter signed by the minister contained only some quotes from the law that had no relation at all to our questions.

For a long time now, the results of tenders in Armenia have been predetermined well before the tenders are held. This is just one instance.

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