Officials of the tender review board could not provide answers as to why they had taken a controversial decision to purchase thousands of wooden poles for the electricity authority (EAC) that later proved to be faulty, MPs said on Tuesday.
A probe had been ordered after it emerged that 30,000 poles procured in 2005 were unsuitable because they were rotting and that the problem became known a year after the purchase.
While the EAC had traditionally bought poles from Scandinavian companies, the order of faulty ones marked the first time it opted to buy from a Greek company. According to the EAC five officials were involved, of whom four have since retired.
AKEL MP Irene Charalambidou said the story did not only concern the €24m the case cost the EAC but how the door was opened to this company, Vex.
The door was opened by the tender review board at the time, which reversed the EAC board’s decision to award the deal to a Scandinavian company, she said.
But it appears that investigators did not look into that angle.
“The least the investigators should have done about this curious decision was to extend the probe to include the tender board and to make sure its members had been acting in good faith they should have opened their bank accounts,” Charalambidou said.
According to the AKEL MP, the auditor-general was now asking the attorney-general to go back and start the investigation from the day the board made the decision.
“In any case, we haven’t received any answers today from the then chairman of the board, Mr (Ioannis) Poyiadjis,” she said. “It was obvious that he could not respond to anything that we asked. I hope the investigators and the attorney-general can provide the answer.”
EAC chairman Othonas Theodoulou said the board had been informed about the problem in March 2014 and after carrying out administrative inquiries they conveyed the files to the attorney-general.
The EAC has also filed a lawsuit against the company for the losses it incurred. The faulty poles are being replaced gradually to avoid any accidents, Theodoulou said.
“In any case, we will cooperate with any additional investigation deemed necessary,” he added. “All the poles are problematic and must be replaced.”
Included in the €24m claimed by the EAC in court is the cost of the poles (€4m), installation and replacement expenses, and all administrative expenses incurred by the organisation in the process.
The contract was awarded in 2005 and the first shipment of poles was received near the end of that year. The first batch was installed in 2006, and the last in 2009. Rotting was identified in mid-2010, and the board ordered a disciplinary probe, which was completed in 2013. The report was forwarded to the Attorney-general.
The probe found that five EAC directors – four former and one sitting – showed “criminal negligence”, which resulted in the power company’s failure to seize the bank guarantees submitted by the supplier.
