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The fate of national money for local development

Money and procurement 2: where did the contracts for local investments end up?

EFOR continues the research concerning the way in which procurement was made from the National Local Development Programme (PNDL). The funds allocated through PNDL are meant for the development of local infrastructure, such as roads, water supply, water treatment plants, sewerage, construction of sports facilities or modernization and construction of public buildings. Although the funds are allocated by the Ministry Of Regional Development and Public Administration (MDRAP), the procurement procedures are made locally, by the beneficiaries (e.g. municipalities and country councils).

Between 2013 and 2016 there were made payments valuing 5,719,641,554 RON / approx. 1.5 billion Euros for the PNDL, according to the information published by MDRAP. Most of the money went to communes, meaning 4,419,514,542 RON.

EFOR has already showed that the distribution of these funds is predisposed to political clientelism practiced by all parties and between 2012 and 2016 a governing mayor had twice the chance of obtaining money than one from the opposition. The situation is even more evident between 2007-2008, when the chance was thrice as bigger.

The current report comprises other five counties: Caraș Severin, Gorj, Iași, Timiș, and Teleorman.

The main conclusions are:

  • In each of the studied counties, approximately 50% of the contracts went to 5-6 firms out of 40-50 competitors that won contracts from PNDL. A significant number among them have legal issues, political or family links with mayors, presidents of the county councils, local councilors, members of the Parliament or leaders of the parties at local or central level.
  • The links exist in many party-related cases, though they tend to be rather built around local power relationships. Therefore, there are firm owners who donate to more parties, are camp-switching or have family connections with persons from other parties.
  • Some of the firms are owned on paper by administrators who have no visible public image, but in reality are controlled by political figures. In some of the identified cases, the real owners have not done quite big efforts to camouflage themselves and have done business directly with their firms, in pure conflicts of interests. We mention that we have not analyzed all of the firms, but only those who got most of the contracts; there is a possibility that some of these companies which are situated on the last places in the list are champions with respect to contracts with the state in other counties.
  • There exists both situations in which the monopoly is detained by party companies from the county and firms that come from other regions of the country and have a great success all over Romania. The rule seems rather the county/regional monopoly.

You can find more on data and procurement in PB #55 (Romanian only)

Read also the first of the research here.

Co-financed through Prevention of and Fight against Crime Programme of the European Union.

The project Law, Economy, Competition and Administration – Developing a Multidisciplinary Approach in the fight against Public Procurement Criminality is financed by the European Commission, through DG Home Affairs. This publication reflects strictly the opinions of the authors, with the European Commission not being responsible for any way of use of the information contained therein.

The project is developed by the Freedom House România in partnership with authorities and public institutions: The Ministry of Justice, Competition Council, National Agency of Public Functionaries, NGOs: EFOR; international partners: The Center for the Study of Democracy (Bulgaria)


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