The EU Delegation in Tirana, A History of Maladministration

By Vincent W.J. van Gerven Oei,
The EU Delegation in Tirana, A History of Maladministration
EU Ambassador Romana Vlahutin visits Vlora. Jan. 31, 2017. Source: RTSh.

Recently, Exit reported on the procedure around the acquisition of the official residence of EU Ambassador Romana Vlahutin in luxury complex Rolling Hills. The European Commission (EC) claims that all proper procedures have been followed, and that the EC’s acquisition of one of Albania’s most expensive pieces of real estate is in fact financially and security-wise the best “money for value.”

But independent audit reports and documents of the Ombudsman of the European Union show a consistent pattern of maladministration, mismanagement of funds, weak responses to corruption cases inside the EU Delegation in Tirana, and difficult communication between the Delegation and the European Commission in Brussels.

An external audit report from September 2001 entitled “Evaluation of EC Country Strategy: Albania 1996–2001, drafted by an independent Italian consultancy firm, shows an ineffective delegation trying to implement “overambitious” programs and “uncoordinated” interventions with “very little impact.” The devastating evaluation of the Delegation’s performance is compounded by “financial irregularities” and “extremely poor coordination” between the Delegation and Commission Headquarters in Brussels:

The irregularities in financial and contract management identified in the reviews commissioned by the Delegation should be thoroughly investigated. Formal audits should be performed in these areas, either by the Commission’s internal audit services or by the Court of Auditors

Management actions are required to secure improved cooperation between the Delegation and Headquarters.

These irregularities are later identified as follows:

  • In the road sector, out of seven works contracts analysed, six were awarded to contractors whose bids were not the lowest. In a number of cases, the subsequent performance of the contractors was seriously deficient.
  • Analysis of the tender evaluations highlighted a number of irregular practices and inconsistent applications of procedures.
  • Relationships between PMU [Program Management Unit] staff and supervising consultants; and between supervising consultants and contractors have been unhealthily close in a number of cases. Supervising consultants in some instances supported excessive claims.
  • With respect to the contract for construction of [a] border crossing with Greece, a review found interference on the part of the Delegation in the process by which supervising consultants were appointed; which led to extremely poor implementation of the contract […] and to serious irregularities in the payment of claims; the review recommended legal action against the contractors.

Although the external auditors recommend a “formal and transparent investigation of reported past financial irregularities,” it remains unclear whether such an investigation has in fact been executed.

However, documents obtained from the EU Ombudsman show that the same problems as found in 2001 have persisted over the years.

The Serious Crimes Court, Tirana. Source: Panoramio.
The Serious Crimes Court, Tirana. Source: Panoramio.

Construction of the Serious Crimes Court

The first EU Ombudsman case (2450/2008/(VL)BEH) refers to the complaint of a German engineer, who supervised the construction of the Serious Crimes Court (SCC) in Tirana in 2008. The construction had been tendered out by the Ministry of Justice to a private contractor, with the funding provided by the European Union.

After first filing a more general complaint regarding certain “difficulties” encountered after criticizing the Ministry of Justice and the ECD in Tirana, he later filed a more detailed complaint:

[The complainant] argued that the contractor and the [Ministry of Justice] agreed to use cheaper and inferior materials for certain parts of the building than the ones provided for in the contract and in certain documents annexed to it. The products and supply companies for these materials were laid down in a specific form (Form 4.6.9) so as to ensure the use of quality materials. The elements of the building concerned were the air-conditioning, the facade and the sound proofing.

It appeared that both the Ministry of Justice and ECD in Tirana accepted these cheaper materials without any compensation in the price. After complaining about this breach of contract, the supervisor was put “under enormous pressure” by the company for which he worked to be “less strict”: “he had been pressured on a constant basis to approve products and works of lower quality.”

The complainant concluded by saying that it was ironic that the construction of the SCC, a court for adjudicating serious crimes, gave rise to a manifest suspicion of corruption. In case the ECD had been willing to do so, there would certainly have been a possibility to deal with less incriminated representatives of the contracting authority than the representatives actually involved in the project.

The Ombudsman concluded that there was no convincing proof of maladministration in case of the construction per se, in part because the supervisor didn’t ask for his contract to be renewed and thus was not present on the construction site until the end of the project. However, with regard to the treatment of the supervisor by the ECD, which consistently took the side of Ministry of Justice and the private contractor in spite of multiple threats and intimidation, the Commission failed to take decisive action:

[T]he recognised seriousness was such that one would have expected the ECD to make contact with the Commission’s headquarters in Brussels in order to consult about possible reactions. At the very least, one would have expected the ECD to record the incidents reported by the complainant, as well as its considerations as to which action to take on the file. However […] the relevant file does not contain any trace in this regard.

This is the first case of maladministration. Moreover, when one of the construction workers died on the construction site, the ECD failed to follow through after the Ministry of Justice closed the court case. Again, the Ombudsman judges the inaction of the ECD as maladministration:

The Ombudsman finally considers it remarkable and rather unusual that it was apparently at the contractor’s instigation that the family of the deceased worker was provided a flat, where one would instead have expected the contractor’s insurance to take appropriate steps. While the Ombudsman is unable to ascertain whether the complainant is right in stating that this amounted to an acknowledgement of guilt on the contractor’s part, he considers that, at the very least, the ECD should have considered this aspect reason enough to insist on further elucidation of the situation.

Tender for technical assistance and training

Second was a case (1005/2011/MMN) considering a tender procedure for the provision of technical assistance and training to the Ministry of Agriculture, Food and Consumer Protection launched in 2010, supposedly the continuation of technical assistance and training project that was at that moment being implemented. One of the companies applying to the tender complained to the Ombudsman that the team leader of the current project had drafted the terms of reference for the tender procedure in which his own company was participating together with several other companies, including the complainant.

Unsurprisingly, the company who won the tender was the same company that was at the time already providing a similar service, and whose team leader had drafted the term of reference which his company, of course, completely fulfilled. The EU Delegation went on to sign a contract with the winning company, three weeks before informing the other competitors, thus avoiding any complaint procedure.

The EU Delegation in Tirana denied there was any conflict of interest, and moreover failed to provide the email correspondence between the Delegation and the team leader requested by the Ombudsman. Based on all the evidence provided by both the Commission and the complainant, the Ombudsman concluded that this was a case of maladministration, and recommended that the Commission make “an adequate ex gratia payment to the complainant.” The Commission refused to do this.

The EU Ombudsman concluded its report as follows:

It is good administrative practice to avoid actual, potential and apparent conflicts of interest in the context of tender procedures. In the present case, the Commission allowed an expert of the successful tenderer to participate in the drafting of the Terms of Reference, which gave rise to at least an apparent conflict of interest. This constitutes an instance of maladministration.

Tender for Environmental Monitoring System

Finally, another case (513/2011/(PMC)EIS) was brought forward in 2011 by an Italian company, which had competed in a tender procedure of the EU Delegation (in 2010 all European Commission Delegations were renamed) for an Environmental Monitoring System. Even though promptly providing additional technical specifications, the company lost the tender bid on a technicality.

The company then asked the EU Delegation in Tirana for a copy of the winning tender, which it refused, citing “commercial interest.” Subsequently the company turned toward the Ombudsman, which in 2013 judged that the EU Delegation had illegitimately withheld “information about the characteristics and relative advantages of the successful tender.” It also judged the Delegation’s approach to “overly formalistic.”

The case was closed with a friendly solution, in which the European Commission provided the Italian company with information as regards the relative advantages of the winning tender.

Vlora Bypass and beyond

From the above three cases presented to the EU Ombudsman between 2008–2011 it is clear that the behavior of the EU Delegation in Tirana stills shows the same signs as those noted in the external audit report from 2001: “irregular practices” and “inconsistent application of procedures” continue to take place, and its behavior in all three cases appears to indicate that there are still “unhealthily close” relationships between the Delegation and certain private companies. It responds to allegations by withholding information and insisting it has followed all proper procedures, rather than being transparent.

Nevertheless the performance of the contractors in the projects it funds is still, as in 2001, “seriously deficient.” For example, the EU has invested €47 million into several infrastructural projects in Vlora: the Lungomare beachfront promenade, the Vlora Bypass, and a new drainage system.

All projects have been delayed for long periods of time. Ambassador Vlahutin even recently visited Vlora to be informed about the new deadline, and has now been  the Lungomare beachfront will be finished by April 30, about a year late. The contractor of the Vlora Bypass, the Italian company Serenissima, is in financial difficulties after bidding on (and winning) the tender with an unrealistically low price. The roadworks were originally supposed to be finished in September this year, but even the visit of the EU Ambassador couldn’t bring any clarity as to when this vital piece of infrastructure, which the EU contributes €18 million to, will see the light of day.



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