{"id":449432,"date":"2021-05-27T17:02:11","date_gmt":"2021-05-27T17:02:11","guid":{"rendered":"https:\/\/www.moldova.org\/en\/?p=449432"},"modified":"2021-05-31T10:40:28","modified_gmt":"2021-05-31T10:40:28","slug":"chisinau-arena-a-successful-project-or-a-hopeless-failure","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/chisinau-arena-a-successful-project-or-a-hopeless-failure\/","title":{"rendered":"Chisinau Arena – a successful project or a hopeless failure?"},"content":{"rendered":"Reading Time: <\/span> 5<\/span> minutes<\/span><\/span>

“The first large-scale social project since independence”<\/em> – this is the way Chisinau Arena Aqua Center & Tennis Club<\/strong> is described on its official webpage<\/a>. The futuristic complex, occupying a 10-hectare land, looks bright and optimistic on sketches and architectural models, especially when backgrounded by smiling politicians who present themselves as project initiators. Chisinau Arena is supposed to be the main sport and entertainment facility in the capital city, with basketball, volleyball, handball fields, tennis, mini football, boxing courts, concert, congress and exhibition halls, an aqua centre with swimming pools, an aqua park, fitness and SPA, as well as a caf\u00e9-restaurant area, an open public pool and an ice-skating rink.<\/p>\n

\"\"

Source: chisinauarena.md<\/p><\/div>\n

\"\"

Source: chisinauarena.md<\/p><\/div>\n

The big problem is that all of it is not ready yet. The opening date is not set, and in order to be able to be put it into operation, more funds from the state budget are still needed. It rather seems the longest-running money laundering project, along with the biggest corruption and embezzlement schemes of the country.<\/span><\/p>\n

A partnership with issues<\/h3>\n

Chisinau Arena project was launched in 2018 by the former democratic leader, Vladimir Plahotniuc<\/strong>. First, democrats announced that the arena will be open in the fall of 2019. A public-private partnership between public institutions and a Turkish private company was created in August 2018.<\/p>\n

But then, it was found<\/a> that the complex could not be put into operation because it could not be connected to the gas, water and sewerage networks existing in the area. Also, it was not connected to the electricity networks. In May 2019, an additional agreement was signed, through which state authorities undertook to pay 1.5 million euros<\/strong> in addition to the initial contractual provisions<\/span> in order to enable the connection to the water and sewerage systems. Thus, the initial deadline was extended to February 2020, then May 2020 and November 2020, suggesting the pandemic crisis would have ruined the authorities’ plans.<\/p>\n

The Public Property Agency (PPA) stated<\/a> that construction works carried out by the Turkish company were completed in December 2019. The initial agreement provided for the construction works to be carried by the private company only in the perimeter of 10 ha around the building. The rest was supposed to be done by the public partner. Still, the public-private partnership didn’t manage to ensure the connection of Chisinau Arena to the municipal networks, including the access roads. Several additional appendixes to the contract were signed, instalment payments were postponed, the public institutions responsible for the implementation of the project informed that they do not have the necessary resources for the design, construction and arrangement of the necessary networks, as the existing ones “do not comply with the technical requirements for the service of such a complex.”<\/em><\/span><\/p>\n

The next issue was the access roads, which were never built, according<\/a> to the administrator of Chisinau Arena. In May 2021, the state officials responsible for supervising the construction works declared that the building itself is ready. Still, a final document wasn’t signed, as the arrangement of access roads would require<\/a> additional 2.8 million euros<\/strong> from the state budget<\/span>. Moreover, the land on which the access roads need to be built are privately owned and do not belong to the complex. They would need to be declared of public utility, while negotiations with owners would need to be conducted in order to allocate other plots to them.<\/p>\n

The expropriation of landowners (23 plots and 2 buildings) would require Government decisions and votes in Parliament, which would increase the public contribution by at least one more million euros<\/strong>. That was just another issue not taken into account in the initial phase of the project.<\/p>\n

What is more, some former owners of lands on which Chisinau Arena was built claimed that, during the democratic government, they were pressured to give up their property without claiming any compensation, their access to their properties was restricted or they could not use their lands because of uncertainties and the refusal of authorities to issue permissive construction documents.<\/p>\n

\"\"

Source: zdg.md<\/p><\/div>\n

The future of Chisinau Arena doesn’t look very bright. In case the complex is not opened in the next months, conservation costs of not less than 10 million lei<\/strong> per year would be implied<\/span>. “There are a lot of systems that need to be operational: heating needs to be maintained at a certain level, recycling systems, humidity systems need to be kept at a certain level. […] We wouldn’t like to reach conservation and we already have a decision of the Board of Directors that it is not the best option for the complex,”<\/em> explained<\/a> Eduard Calancea<\/strong>, manager of the state company that administrates Chisinau Arena.<\/p>\n

By September 2020, 11.5 million euros<\/strong> were allocated from the state budget for Chisinau Arena. Most of this amount was paid in 2018-2019 when the complex was built. Another 1.5 million euros were transferred to the private partner, in July 2020, as an instalment within the public-private partnership agreement.<\/p>\n

Corruption, money laundering & embezzlement<\/h3>\n

All in all, the Government undertook to pay a total amount of 44.5 million euros <\/strong>(!) as the total cost of the project. The funds are supposed to be paid from the future incomes generated by the complex and from the state budget, in instalments, during a period of 12 years. Given that Chisinau Arena does not generate revenue, the annual costs and instalments are paid from the state budget nowadays.<\/p>\n

A criminal case was filed, in October 2019, by the Anti-corruption Prosecutor’s Office<\/strong> against the actions of the government officials who participated in the launch of the Chisinau Arena. The group of officials were accused of embezzlement of foreign property in circumstances of abuse of power. In addition to the 10 ha on which the arena was built, the group would have allegedly stolen another 59 hectares of land from the agricultural circuit, which were pledged to the Turkish construction company.<\/span> “If, due to state authorities fault, Chisinau Arena is not put into operation in the next period or at least one instalment is not paid, the 59 ha land will become foreign property,”<\/em> MP Alexandru Slusari<\/strong> informed<\/a>.<\/p>\n

\"\"

Source: zdg.md<\/p><\/div>\n

There are no clear provisions in the contract signed with Turkish company that it would have to justify the costs<\/span>, so there is a risk that the real cost of the project was overrated. “This project was conceived as a scheme that would eventually lead to the takeover by certain groups of the property and land that was allocated for this project. There is such an impression created that the amount of 43 million euros was randomly named. No supporting documents have been found to clarify how this amount was reached. Things have changed over time and now the cost of this project is 44.5 million euros. The risks are that, in this case, the real cost is lower than what the state spends for this project,”<\/em> \u00a0Maia Sandu<\/strong> pointed<\/a> out.<\/p>\n

Prosecutors are also in the process of checking the legality of the way the contract price is formed, as well as granting preferential tax conditions to the company that built the arena (the tax exemption applied on the value added tax when importing building materials, without diminishing the payments to suppliers).<\/p>\n

After all the things revealed and those that were not discovered yet, the question is how much\u00a0the citizens of the country would still have to pay until Chisinau Arena would start to generate revenue.<\/p>\n

Photo: chisinauarena.md<\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 5<\/span> minutes<\/span><\/span>“The first large-scale social project since independence” – this is the way Chisinau Arena Aqua Center & Tennis Club is described on its official webpage. The futuristic complex, occupying a 10-hectare land, looks bright and optimistic on sketches and architectural models, especially when backgrounded by smiling politicians who present themselves as project initiators. Chisinau Arena […]<\/p>\n","protected":false},"author":31,"featured_media":449438,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,6,3,4,14,56],"tags":[1053,115,35,27,1054,1055],"class_list":["post-449432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-important-en","category-politics","category-society","category-sports","category-reportaje","tag-chisinau-arena","tag-corruption","tag-important","tag-moldova","tag-schemes","tag-state-budget"],"content_social_share":"Reading Time: <\/span> 5<\/span> minutes<\/span><\/span>

“The first large-scale social project since independence”<\/em> – this is the way Chisinau Arena Aqua Center & Tennis Club<\/strong> is described on its official webpage<\/a>. The futuristic complex, occupying a 10-hectare land, looks bright and optimistic on sketches and architectural models, especially when backgrounded by smiling politicians who present themselves as project initiators. Chisinau Arena is supposed to be the main sport and entertainment facility in the capital city, with basketball, volleyball, handball fields, tennis, mini football, boxing courts, concert, congress and exhibition halls, an aqua centre with swimming pools, an aqua park, fitness and SPA, as well as a caf\u00e9-restaurant area, an open public pool and an ice-skating rink.<\/p>\n

\"\"

Source: chisinauarena.md<\/p><\/div>\n

\"\"

Source: chisinauarena.md<\/p><\/div>\n

The big problem is that all of it is not ready yet. The opening date is not set, and in order to be able to be put it into operation, more funds from the state budget are still needed. It rather seems the longest-running money laundering project, along with the biggest corruption and embezzlement schemes of the country.<\/span><\/p>\n

A partnership with issues<\/h3>\n

Chisinau Arena project was launched in 2018 by the former democratic leader, Vladimir Plahotniuc<\/strong>. First, democrats announced that the arena will be open in the fall of 2019. A public-private partnership between public institutions and a Turkish private company was created in August 2018.<\/p>\n

But then, it was found<\/a> that the complex could not be put into operation because it could not be connected to the gas, water and sewerage networks existing in the area. Also, it was not connected to the electricity networks. In May 2019, an additional agreement was signed, through which state authorities undertook to pay 1.5 million euros<\/strong> in addition to the initial contractual provisions<\/span> in order to enable the connection to the water and sewerage systems. Thus, the initial deadline was extended to February 2020, then May 2020 and November 2020, suggesting the pandemic crisis would have ruined the authorities’ plans.<\/p>\n

The Public Property Agency (PPA) stated<\/a> that construction works carried out by the Turkish company were completed in December 2019. The initial agreement provided for the construction works to be carried by the private company only in the perimeter of 10 ha around the building. The rest was supposed to be done by the public partner. Still, the public-private partnership didn’t manage to ensure the connection of Chisinau Arena to the municipal networks, including the access roads. Several additional appendixes to the contract were signed, instalment payments were postponed, the public institutions responsible for the implementation of the project informed that they do not have the necessary resources for the design, construction and arrangement of the necessary networks, as the existing ones “do not comply with the technical requirements for the service of such a complex.”<\/em><\/span><\/p>\n

The next issue was the access roads, which were never built, according<\/a> to the administrator of Chisinau Arena. In May 2021, the state officials responsible for supervising the construction works declared that the building itself is ready. Still, a final document wasn’t signed, as the arrangement of access roads would require<\/a> additional 2.8 million euros<\/strong> from the state budget<\/span>. Moreover, the land on which the access roads need to be built are privately owned and do not belong to the complex. They would need to be declared of public utility, while negotiations with owners would need to be conducted in order to allocate other plots to them.<\/p>\n

The expropriation of landowners (23 plots and 2 buildings) would require Government decisions and votes in Parliament, which would increase the public contribution by at least one more million euros<\/strong>. That was just another issue not taken into account in the initial phase of the project.<\/p>\n

What is more, some former owners of lands on which Chisinau Arena was built claimed that, during the democratic government, they were pressured to give up their property without claiming any compensation, their access to their properties was restricted or they could not use their lands because of uncertainties and the refusal of authorities to issue permissive construction documents.<\/p>\n

\"\"

Source: zdg.md<\/p><\/div>\n

The future of Chisinau Arena doesn’t look very bright. In case the complex is not opened in the next months, conservation costs of not less than 10 million lei<\/strong> per year would be implied<\/span>. “There are a lot of systems that need to be operational: heating needs to be maintained at a certain level, recycling systems, humidity systems need to be kept at a certain level. […] We wouldn’t like to reach conservation and we already have a decision of the Board of Directors that it is not the best option for the complex,”<\/em> explained<\/a> Eduard Calancea<\/strong>, manager of the state company that administrates Chisinau Arena.<\/p>\n

By September 2020, 11.5 million euros<\/strong> were allocated from the state budget for Chisinau Arena. Most of this amount was paid in 2018-2019 when the complex was built. Another 1.5 million euros were transferred to the private partner, in July 2020, as an instalment within the public-private partnership agreement.<\/p>\n

Corruption, money laundering & embezzlement<\/h3>\n

All in all, the Government undertook to pay a total amount of 44.5 million euros <\/strong>(!) as the total cost of the project. The funds are supposed to be paid from the future incomes generated by the complex and from the state budget, in instalments, during a period of 12 years. Given that Chisinau Arena does not generate revenue, the annual costs and instalments are paid from the state budget nowadays.<\/p>\n

A criminal case was filed, in October 2019, by the Anti-corruption Prosecutor’s Office<\/strong> against the actions of the government officials who participated in the launch of the Chisinau Arena. The group of officials were accused of embezzlement of foreign property in circumstances of abuse of power. In addition to the 10 ha on which the arena was built, the group would have allegedly stolen another 59 hectares of land from the agricultural circuit, which were pledged to the Turkish construction company.<\/span> “If, due to state authorities fault, Chisinau Arena is not put into operation in the next period or at least one instalment is not paid, the 59 ha land will become foreign property,”<\/em> MP Alexandru Slusari<\/strong> informed<\/a>.<\/p>\n

\"\"

Source: zdg.md<\/p><\/div>\n

There are no clear provisions in the contract signed with Turkish company that it would have to justify the costs<\/span>, so there is a risk that the real cost of the project was overrated. “This project was conceived as a scheme that would eventually lead to the takeover by certain groups of the property and land that was allocated for this project. There is such an impression created that the amount of 43 million euros was randomly named. No supporting documents have been found to clarify how this amount was reached. Things have changed over time and now the cost of this project is 44.5 million euros. The risks are that, in this case, the real cost is lower than what the state spends for this project,”<\/em> \u00a0Maia Sandu<\/strong> pointed<\/a> out.<\/p>\n

Prosecutors are also in the process of checking the legality of the way the contract price is formed, as well as granting preferential tax conditions to the company that built the arena (the tax exemption applied on the value added tax when importing building materials, without diminishing the payments to suppliers).<\/p>\n

After all the things revealed and those that were not discovered yet, the question is how much\u00a0the citizens of the country would still have to pay until Chisinau Arena would start to generate revenue.<\/p>\n

Photo: chisinauarena.md<\/p>\n

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