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Economy

Mold-Street: Company controlling Chișinău Airport transferred millions of lei to a firm of the Russian Presidential administration

In a recent investigation, the Moldovan business news portal Mold-street found out that Air Invest, company that controls Chișinău International Airport under a concession contract, has delays in its investment and dubious transfers to the Presidential Administration of Russia.

In a Facebook post, Air Invest claims that the article is a “cheap attempt to destroy the image and the activity of the enterprise, that successfully manages and modernizes the Chișinău Airport”.

Mold-Street writes that a government commission evaluated the company’s investment into the airport at the level of 61,79 million euros until 31 December 2016. At the same time, after three years of concession, the value of finished work was estimated at only 47,7 million euros until 25 August 2017.

In addition, dubious transfers from Avia Invest to other companies of decision-makers of the airport holder have been found, according to a case court in April 2016. The prosecutors then found that decision-makers at Avia Invest SRL, ” using their job positions in personal and material interests (…), fictitiously transferred a part of the company’s profits to affiliated companies, causing substantial damage to the public interest and/or to the rights and interests protected by law of the physical or juridical persons”.

During 2013-2015, Air Moldova paid Avia Invest some 256,1 million lei for the landing services and the “modernization tax”. Later, Avia Invest transferred the money to other companies affiliated to Ilan Shor, the banker thought to be the mind behind the Grand Moldovan Theft, who happened to be the chair of the company’s board.

Some transfers were directed to interesting destinations. Between 27 December 2014 and 30 March 2015, Avia Invest transferred 109,6 million lei to Nobil Air SRL as a loan, which then loans the money to Airklassika Group. The latter converted the funds in US dollars and sent them to the “Center for Financial and Juridical Assistance”, belonging to the Presidential Administration of Russia. A similar transfer of 8,25 million lei (US dollars, in the last position) was made from Avia Invest to the Russian “Center” through Moldclassica International, Dufremol SRL, and Airklassika Group.

The prosecutors also found that funds of approximately 4,1 million US dollars and 6 million euros coming as payment from Air Moldova was diverted by Avia Invest through Aviaconsulting to Stanlex Impex LP from the UK- dissolved in April 2016.

The court case was later closed by the Buiucani Court of Chișinău, citing the legality of company’s transfers. The Anti-Corruption Prosecution Office also closed the investigation in June 2016, claiming that the court decision is irrevocable.

In 4 years of Airport’s concession, Air Invest changed a lot of its owners and beneficiaries. The founding owner of the company, Habarovski Aeroport, holds only 5% of the shares, while the Cyprus-based, 2 years old Komaksavia Airport Invest Ltd has 95%.

The International Airport of Chișinău concession to Avia-Invest under dubious conditions in 2013 has been a subject of controversy in the Moldovan society as a case of high-level corruption. Avia-Invest is considered to be an off-shore company with dubious shareholders and almost no experience in the aviation services industry. The even more dubious businessman and mayor of Orhei, Ilan Shor, is the head of the administration council of Avia-Invest. Shor’s Air Klassica, a service provider in the airport, received a 40,4 million lei loan from the defrauded Unibank in 2014.

Even if the Anti-Corruption Center recommended the canceling of the contract in August 2015, the Justice Minister Vladimir Cebotari found no reasons for that and the prosecutors didn’t do anything to investigate the concession of the Chișinău airport, in the context of its rapidly growing traffic and profit.

Currently studying International Relations at the University of Pécs, Hungary. Study focus: Transnistrian conflict settlement, Moldovan statehood, Moldovan democracy. Inquiries at [email protected]

Economy

Moldova Government increases guaranteed minimum wage to 2610 Lei ($157)

25 April 2018- The Government of Moldova adopted a decision to increase the guaranteed minimum wage in the real economy by 230 lei (approx. 14 USD) up to 2610 lei (approx. 157 USD). The change is expected to enter into force from 1 May 2018.

Thus, the workers in the real sectors of the economy will not receive less than 15,44 Moldovan lei (0,93 USD) for an hour of labor, compared to the current 14,09 lei- 2380 lei monthly.

In 2017, the prices increased by 6,6%, while the productivity growth rate was 3%- a 9,6% salary increase is put up.

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Economy

Moldova buys 69 Russian GAZ ambulances

24 April 2018- The Moldovan Center for Urgent Medical Assistance announced about the delivery of 10 ambulances bought last year from the Russian GAZ. Other 50 GAZ ambulances are expected to be delivered until the end of May.

The 69 ambulances will be distributed in 32 urgent medical centers, where the ambulances are 90% overused. The Center claims that the GAZ Sobol ambulances, costing 740 thousand lei each, comply with the international standards and the technical equipment allows a high level of medical assistance.

The seller of the ambulances was a Moldovan firm residing in Coșnița, Dubăsari district. According to Mold-Street, the ambulances were produced at the GAZ factory, which belongs to Basel group (Basic Element), controlled by the Russian oligarch Oleg Deripaska. The latter is subject to the US sanctions due to his alleged involvement in the President Trump campaign manager Paul Manafort’s collusion with Russian officials during the 2016 elections. There are also “allegations that Deripaska bribed a government official, ordered the murder of a businessman and had links to a Russian organized crime group” (NPR).

Some claim that this would mean that the Moldovan Government is a collaborator of Deripaska.

Facing criticisms about GAZ’s quality, State Secretary Boris Gîlcă declared that he was too skeptical about the quality, but then was later convinced that “things changed”:

“Things changed, there are quality cars, well equipped, at an extremely good price, the best price, which probably was the criteria for the listing”, says Gîlcă, quoted by Unimedia. Gîlcă says that only 60 ambulances were bought from the public listing, but then 9 were delivered as part of “very tough negotiations”.

For 2018, the Government of Moldova allocated 273 million lei for buying other 168 ambulances: 35 intensive therapy units and 133 regular ambulances.

In 2017, urgent medical assistance was offered to approximately 868 thousand people.

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Economy

Study: Corruption in Moldova’s public procurement yearly costs up to 3 billion Lei

Source: Iurie Morcotilo, Expert-Grup

11 April 2018- An analytical commentary by Iurie Morcotilo states that the corruption in public procurement costs Moldova up to 3 billion Lei (183,24 million USD).

The study is based on the official data on the estimated full cost of public procurement from 2008 till 2015. The main factors cited as causes stimulating corruption in public procurement are lack of transparency, the complexity of the procurement process, but also the misinterpretation of the public budget as something abstract, not as money from the taxpayers. The corruption in public procurements are believed to happen at different stages: planning, procurement launching, evaluation and contract awarding, contract implementation stage.

Though Morcotilo recognizes that quantifying corruption is hard in this field, the study views some indicators from Moldova’s ranking in the Global Competitiveness Report: embezzlement of public funds, favoritism in governmental decisions, informal bribes and payments, and inefficiency of public spending.

The costs of corruption in public procurement was also calculated based on the estimated international average of 20-25% of the total amount of public procurement. In Moldova’s case, the 25% quota was reasonably applied, even if the statistical data on public procurement are lacking (only big contracts are counted for stats). The study found that between 1,3% and 2,5% of Moldova’s GDP are lost to corruption in public procurement:

“Based on the available data and applying the 25% average percentage of the corruption cost in public procurement, it can be estimated that in 2015 this cost varied from MDL 1.6 billion to MDL 3 billion, which represents between 1.3% and 2.5% of GDP”, reads the study.

Of course, those are only monetary costs. Other consequences are:

  • long-term financial losses for the public budget;
  • negative impact on health and safety of population;
  • negative effects on competition.

The author opinionates that the corruption in public procurement can be reduced only by joint efforts of the authorities fighting corruption and those responsible for procurement management, but also by enhanced monitoring by citizens.

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