GEO

Criminal investigation into GEL 1.5 million worth of missing irrigation pipes in Krtsanisi

13 October, 2010

Update 20 Oct. 2010: We have been informed that about a week ago, investigators arrested two of the auction winners. According to the investigators, Rustavi City Hall employees are also being questioned and soon a decision regarding whether to charge them will be made. A year ago, Rustavi city hall auctioned off irrigation pipes in Krtsanisi. The “winners” of these auctions never paid — but nevertheless were allowed to remove the pipes without replacing them. The villagers of Krtsanisi, left without water for their farms or homes, came to our ALAC program, which provides free legal consultations, for help. On their behalf, TI Georgia requested materials from various state agencies and discovered that before the auction, an audit valued the irrigation pipes at GEL 1.5 million (presumably on the basis of their value as scrap metal, but the audit is not public). The auction winner was awarded the pipes with a bid of just GEL 1,000 more than the minimum bid price of GEL 570,000. The winner of the auction then removed the pipes, but paid only 5 percent of their bid price to the state budget. They also failed to replace the old pipes with new ones — a condition of the auction. According to locals, the bidders even removed pipes which were never privatized. We presented these findings and supporting documentation to the Chamber of Control of Georgia (CoC), and assisted the villagers to write a collective letter to the Chamber about the incident. However, after two months, the CoC had not replied. We then asked the Prosecutor General’s office to investigate the case, and mentioned the CoC's inactivity. After we applied to the General Prosecutor, the CoC answered our first letter within a week and published their audit conclusion. As a result of these letters, the Prosecutor General initiated criminal proceedings against Rustavi city hall employees for abuse of power. The investigation uncovered that Rustavi City Hall conducted the auction for the metal pipes not once, but three different times. According to the Chamber of Control, none of the “winners” of these auctions ever paid — but were allowed to remove the pipes anyway. The Chamber of Control’s audit put the total loss to the state budget at 600,000 GEL but the Prosecutor’s office is waiting for the conclusion of its own experts, and given the price of the pipes according to the original audit of 1.5 million GEL the experts' conclusion may very well be higher than the Chamber's decision. The approximately 2,500 inhabitants of Krtsanisi still do not have functioning irrigation pipes in their village. They could not grow their crops during the past summer and even now they only have drinking water for two hours a day.

Author: Eka Bokuchava