GEL 5 million from the municipalities of Adjara for a company linked with Russian businessmen - საერთაშორისო გამჭვირვალობა - საქართველო

GEL 5 million from the municipalities of Adjara for a company linked with Russian businessmen

15 June, 2023

The Sever company, which has links with Russian businessmen, wins tenders related to the care of stray animals and operation of a landfill without competition in the municipalities of Adjara. In total, Sever has received GEL 4,979,714 since 2013, more than 90% of which the company received through simplified procurements, non-competitive tenders, or disqualification of other bidders. 

Businessmen with Russian citizenship who own Sever

The Sever company (registration name “Север”) was founded in February 2011 by a citizen of Georgia, Suleiman Parajev, and a citizen of Ukraine, Kirilo Novak; in November of the same year, citizens of Russia, Andrey Balashov and Ildar Neverov, acquired 30% stakes each in the company. In 2012, the director of the company was a Russian citizen, Valeriy  Litvinenko, followed by a citizen of Estonia, Alias Gunar, and by the latest changes of November 2022, by Jemal Gogitidze. By the same changes, Ildar Neverov ceded his stake to Andrey Balashov, who owns a 90% stake in the company today, while a 10% stake is owned by a citizen of Ukraine, Kirilo Novak.               

In November 2022, Ildar Neverov ceded his 50% stake in one more company registered in Georgia to Andrey Balashov. Neverov and Balashov founded Tyor LLC in April 2011, and Sever rented a special vehicle determined by the tender terms from this company. In November last year, Neverov also resigned from the position of director of Tyor. Prior to that, Neverov and Balashov had founded an offshore company with a similar name – Tyor Commercial Inc. – in Cyprus, information about which can be found in the database of the International Consortium of Investigative Journalists (ICIJ). In Georgia, they registered Tyor at the same address where Sever had been founded several weeks before.

Who is Ildar Neverov?

Ildar Neverov is the Public Business Ombudsman on Issues of the Environment and Use of Natural Resources at the Office of the Presidential Commissioner for Businessmen Rights of the Russian Federation. For years, this organization was headed by Boris Titov, who is among the persons sanctioned by Great Britain and Australia. At the same time, since 2010, Neverov has been a member of the Coordination Council of the public organization Business Russia and the Chairperson of the Committee on Ecology of the same organization. Business Russia is a standing economic forum that is periodically convened by Vladimir Putin to discuss the economic and financial strategy of Russia.

Today Neverov is the director of the Russian state company Arktikugol. This company works on the program of development of the Arctic region, obtains coal on the Spitsbergen Archipelago, and tries to increase the volume of its exports, whereas this product has been under partial sanctions. However, Neverov’s business interests are diverse: at various times, he has been active on Russia’s secondary metals market, participated in the management of waste processing enterprises, been on the Board of the Murmansk Maritime Company, and been a member of the Group for the Development of the Arctic and Northern Sea Route.

It is noteworthy that Ildar Neverov was a member of the Board of Directors of JSC Bank Sputnik. This company came under a sanction of the U.S. Treasury Department on May 27, 2022. This sanction was not imposed because of Russia’s military aggression and was caused by the bank’s relationship with North Korea.

The War and Sanctions project, which is supported by the Ministry of Foreign Affairs of Ukraine, considers Neverov’s business partner, Nikolay Ruzavin – who was the Minister of Construction of the Republic of Buryatia, which is part of the Russian Federation – as one of the persons to be sanctioned. Neverov and Ruzavin jointly own an offshore company registered on Cyprus – Siberia Metals Ltd., information about which can also be found in the well-known investigative project (Panama Papers, Pandora) of the International Consortium of Investigative Journalists (ICIJ).

Ildar Neverov owns a flat with an area of 196 sq. m at 80 I. Chavchavadze Avenue in Tbilisi, which he bought in March 2012.

Sever’s non-competitive wins in municipal procurements

On September 29, 2011, soon after Sever was founded, the Government of the Autonomous Republic of Adjara transferred via usufruct a land plot in the Kakhaberi Settlement of Batumi – with an area of 12,208 sq. m on which stood 4 buildings with a total area of 511 sq. m – to the company. It was in this territory that the company arranged open-air cages for stray animals and the infrastructure related to their care and euthanasia. From 2013, Sever got actively involved in municipal procurements and, as it has turned out, the company has been a supplier of animal care, sterilization, vaccination, and other procedures till now and has no competitors.

Since 2014, Sever has also been winning – without competition – municipal procurements announced with the aim of operation of the Batumi landfill. The remaining municipalities of Adjara are also served by this company – they bring household waste collected in the territory of the municipalities into the Batumi landfill. That this landfill poses an environmental threat to the city and to the Black Sea coast has been mentioned in a number of local and international reports. A new landfill was supposed to be opened in 2020, but its opening is also being protracted.

Since 2013, Sever has participated in 73 public procurements and won in 69, including 63 procurements won without competition and 6 – through disqualification of a competitor. In total, the company has received GEL 4,816,286. During the same period, 39 simplified procurement contracts with a value of GEL 163,428 have been awarded to the company. One of the procuring municipalities was Zugdidi, while the remaining contractors of Sever are the municipalities and/or municipal legal entities of Adjara.

In the years 2013-2023, the amounts received from tender contracts and the conditions of competition were distributed in the following manner according to municipalities:

In the very first public procurement announced in 2013 which Sever won without competition, the Batumi City Hall had clearly tailored the tender terms to the company. The Batumi City Hall also didn’t require that the bidder meet any technical conditions in the documentation of the first tender announced with the aim of operation of the landfill. Sever also won this tender without competition. After that, in the tenders announced by the Batumi City Hall, Sever proved relevant experience and has also been winning on the market of municipal procurements without competition.

We believe that the privileged position of the Sever company – which has links with citizens of Russia, and especially with Ildar Neverov, the director of a Russian state company – in the procurements of the municipalities of Adjara, tailoring of the tender terms to this company, and restriction of competition should become the grounds for investigative structures to launch an inquiry.