TALLINN, 15 February 2012 – In the opinion of the National Audit Office, the main reason behind the defects that emerged during the erection of the War of Independence Victory Column was that the entire process was too rushed and work was done by the trial and error method. The rush was the result of the unrealistic completion deadline set at the political level - 28 November 2008 was set as the date for opening the War of Independence Victory Column before anyone knew what the monument would look like, what materials would be used and how complicated its erection would be.

Nobody suggested that the completion deadline might have to be changed after it was decided in autumn-winter 2007 that the column and the cross would be covered with glass instead of the initially planned material. The National Audit Office believes that it was practically impossible to build the monument in less than a year and have it look like the winners of the design contest had pictured it in January 2008.

The National Audit Office is of the opinion that the political charge of the issues relating to the monument prevented the persons directly engaged in its erection from giving an objective assessment of whether the Ministry of Defence and its contract partners were able to solve the problems that were likely to occur in the course of the project.

Tarmo Olgo, Director of Audit of the Performance Audit Department of the National Audit Office said that looking at the problems concerning the monument on a longer timeline, we see that activities were very sluggish in the initial stages, but the people involved were acting extremely rashly in the final stages. “The National Audit Office advised the government to guarantee funding and organise the erection of the War of Independence Victory Column in cooperation with the City of Tallinn in March 2005,” explained Olgo. “A year and a half passed and the government finally formed the contest committee in August 2006. Another eight months passed before the contest was even announced, and yet another 11 months went by before the contract for the construction of the column was signed. This basically left very little time or just seven months for the erection and design of the entire column. Let me remind you that later on, getting the new lighting system for the column alone took 14 months from rocurement until completion. Opening the monument on 28 November 2008 became a dream, and questioning whether this dream could actually come true was not considered appropriate.”

The massive time pressure meant that good public procurement practices were not adhered to in the organisation of several procurements, the suitability of the intended solution for the monument’s central part, the column and the cross, was not adequately assessed and the quality of the works was not supervised as required. The numerous problems meant that the War of Independence Victory Column was completed seven months after the intended deadline and needed repairs immediately after opening.

In many cases, construction started before the required project documents had been prepared and before the Ministry of Defence had given its final approval. The lack of required project documents and time meant that the necessary expert analyses of the technical solutions were not carried out. It later turned out that these technical solutions (lighting and ventilation) were not working and the state incurred additional costs in fixing them. Incomplete project documentation also made the performance of owner’s supervision and finding defective works at the right time more difficult.

“The problems surrounding the column are a prime example of what happens when people don’t do things in the right order – first the design, then an expert analysis of the design, and only then construction,” said Tarmo Olgo. “Things were done in no particular order, or sometimes even in the reverse order when the column was built.”

Czech company Sans Souci was selected to design and build the column and the cross without a proper contest, because the unreasonably short deadline for submission of tenders meant that it was impossible for the other companies invited to participate in the contest to submit tenders at the requested level of detail.

Estonian construction companies were generally selected from among several tenderers and the amount of the requested fee was used as the selection criterion, i.e. attempts were made to get the work done under the best conditions available in the market conditions of the time. There was basically no competition for the selection of the chief designer and the project manager.

The calculations made by the Ministry of Defence in 2011 indicate that the erection of the monument and the elimination of the defects found after its opening cost 8.5 million euros in total, which exceeds the initial estimated amount by a third. 0.8 million euros of this amount or 9% of the total cost of the monument was spent on repairing defective works.

“The National Audit Office does not think it’s a problem that the final cost of the column exceeded the initial estimates by one-third,” said Olgo. “On the contrary – the problem for us is that the Minister of Defence came up with the initial budget of 100 million kroons in the situation where even the Ministry itself didn’t know exactly what and how they were going to build. Later on, they tried to not exceed this amount of 100 million kroons, which the public believed was the final cost of the column, and the Minister kept insisting that the project was going to cost 100 million. This in its turn meant that during the erection of the column, money was saved in areas where it was not justified. For example, several necessary technical expert analyses and construction works were not ordered because of the limited budget.

The opinion of the National Audit Office as a result of the audit is that the financing of works was not transparent. More than a half of the expenses were covered with money initially allocated for defence purposes. The rest of the money was received from the government’s reserve, and the money allocated for the Ministry’s management costs was also used. The National Audit Office finds that considering the importance of the monument, the costs of its erection should have been recognised in the state budget or in the plans for distribution of state budget funds separately from any other expenditure.

The National Audit Office found no evidence to suggest that the money allocated to the Ministry of Defence by the government from its reserves, the money allocated by the Ministry of Defence from its own budget, and the money received as donations from the Monument to Freedom Foundation had been used for any purposes other than to cover the expenses associated with the monument.

Experts find that the supporting structure of the monument’s column and cross is strong, and with proper maintenance should remain strong for at least a hundred years. The glass panels are also securely fastened to the supporting structure. The experts do not have a clear position on the crack resistance and colour stability of the glass panels. The experts have inspected the technical systems installed in the monument at the end of 2010 and at the beginning of 2011 and found them to be reliable and given them a 5-year operating warranty.

The Minister of Defence noted in his letter to the National Audit Office that the audit report helps explain the issues surrounding the erection of the monument to the public. The Minister claimed that the Ministry of Defence reacted to the materialisation of the risks arising from the complexity of the project and the ambitious schedule systematically and without rushing, and the best specialists were involved whenever necessary. The Minister of Defence added his explanatory opinion to some of the claims made in the report.

Background

The War of Independence Victory Column is so far the most important monument erected in Estonia after the country regained its independence to commemorate the people who fought for the independent state of Estonia. The state spent more than eight million euros on the erection of the monument, incl. the 200,000 euros donated by thousands of people. The monument was completed considerably later than planned. Several significant defects were found after the opening ceremony, including the fact that the lighting system did not work and had to be replaced. The defects found in the War of Independence Victory Column were widely discussed in public, which is why it is important to submit an unbiased opinion of the activities of the Ministry of Defence in organising the erection of the monument.

The National Audit Office started the audit outside its work plan in July 2008 when it had become evident that the column was not going to be completed by the intended deadline.
The National Audit Office evaluated the activities of the Ministry of Defence in erecting the War of Independence Victory Column from the moment the monument was planned until the finalisation of its erection. The National Audit Office evaluated the management of the monument’s construction, the selection of important contract partners and the organisation of owner’s supervision, and it also checked whether the money allocated for the erection of the monument was used expediently, economically and lawfully. The causes of the problems encountered during the erection of the War of Independence Victory Column and the opinions of experts about the long-term stability of the monument were also analysed.

The National Audit Office relied on the documents received from the Ministry of Defence, the written and verbal explanations of the employees of the ministry itself and its contract partners in the erection of the monument, and the documents discussed in the Government of the Republic. The expedience of the expenditure incurred in 2008 and 2009 for the establishment of the monument and whether this expenditure had been correctly recognised in the Ministry’s accounting was checked on random basis.

The National Audit Office contacted Czech company Sans Souci s.r.o. that designed and built the column and the cross of the monument twice asking for their explanations to several issues, but the company never sent them to us despite promising to do so.

Toomas Mattson
Head of Communication Service, National Audit Office
640 0777
513 4900
[email protected]
 

• Posted: 2/15/2012 12:00 AM
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