TALLINN, 28 June 2004 - The State Audit Office assessed the activities of the Road Administration and the Ministry of Economic Affairs and Communications, regarding the preparation of invitation for competitive tender for road repair works. As the result of audit the State Audit Office found problems with road repair works; this is applicable both to projects, assuring of competition between constriction companies and financing of construction works.
- When planning works, the main objective has been to repair as many roads as fast as possible and the need to keep the road under repair suitable for driving for some years is not always observed. Therefore, the State Audit Office can’t be sure whether the roads currently repaired remain suitable for driving for the period until the next regular repairs of 15 years – provided that the roads are maintained properly. It is the opinion of the experts that on some of the freshly repaired sections of road, cracks may appear within 3-4 years.
According to Mr. Mihkel Oviir it is surprising that when being approached with an issue as important as that, the Minister of Economic Affairs and Communications, accountable for that respective sphere, announced that the Ministry doesn’t consider it necessary to assess the operations of the Road Administration or its decisions concerning the settlement of technical road maintenance issues. The Director of the Road Administration informed the State Audit Office that he shares the opinions of the State Audit Office, but the official aim of the Administration is to assure the maintenance of a mileage as big as possible in combination with improved travelling conditions.
- The competition situation in road construction sphere was made worse by an agreement concluded by four of the largest road construction companies in March 2003, stating that the companies are going to submit consolidated tenders to participate in three of the largest invitations for competitive road construction tenders in 2003. The volume of these works amounted to approximately 4/5 of the volume of construction and repairs of public roads in Estonia in 2003. Large scale procurements and requirements applicable to the tenderers’ turnover contributed to decreasing competition in the road construction market, possibly also being the reason for price increase. As for the cases investigated, the groups asked much higher prices for the works than the state had intended to pay. In course of the price negotiations that followed the construction companies did agree to cut the prices to a certain extent but not to the level originally planned by the state.
Director General of the Competition Board Announced that the organisation of invitations for competitive tender, audited by the State Audit Office and the activities of the participants of the respective tenders is under the Board’s investigation.
- The State Audit Office states that the state has violated the provision of the Road Act to channel at least 75% of the receipts from fuel excise duty into road maintenance in 2003. The ministries involved are of dissenting opinion: the Minister of Finance sees the definition of the scope of funding road repair works as the purpose of the act but not the establishment of the sources for funding road repairs. The Minister of Economic Affairs and Communications expressed a similar opinion. It is the opinion of the State Audit Office that the wording of the act needs to be amended if restricted finances of the state make it impossible to comply with the Road Act.
Due to the dissenting opinion the State Audit Office is proposing the State Budget Control Committee of the Parliament to discuss the funding of road maintenance at the Parliament.
Audit report and related answers of the ministers and the Road Administration is available at the website of the State Audit office: www.riigikontroll.ee.
Helerin Kivilo
Consultant
Public Relations Service
Telephone: 6400 704
E-mail: [email protected]
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Posted:
6/28/2004 12:00 AM
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Last Update:
10/1/2015 10:53 AM
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Last Review:
10/1/2015 10:53 AM