Armenia’s state anti-trust regulators have expressed concern at a lack of competition in supplies of goods and services to various government agencies, saying that this might fuel corrupt practices.
According to Artak Shaboyan, the chairman of the State Commission for the Protection of Economic Competition (SCPEC), the regulatory body has scrutinized state procurements and found that bidding specifications were often so detailed that only a single company could realistically meet them.
“For example, there were cases where a state body writes in its call for procurement proposals the name of a company or a product brand or its technical specifications are so detailed that it expects products from a particular supplier,” Shaboyan complained during a public discussion in Yerevan.
“This may lie beyond our authority but it affects the competitive environment,” he said, adding that the SCPEC has already conveyed its concerns to the government.
The Anti-Corruption Center (ACC), the Armenian affiliate of Transparency International, has for years charged that various government agencies purchase many goods and services at disproportionately high prices from a handful of companies usually owned by government-linked individuals.
“Corruption risks are obvious there,” Varuzhan Hoktanian, the ACC’s program director, said on Thursday, commenting on Shaboyan’s concerns.
“There is also another factor,” he said. “We know that we have a monopolized economy, which means that [many things] are done for a particular company.”
Prime Minister Karen Karapetian publicly questioned the integrity of state procurements just days after taking office in September 2016. In April this year, his government enacted amendments to an Armenian law on procurements meant to make the process much more transparent and prevent conflicts of interests among officials dealing with such purchases. A government official claimed in June that they will seriously preclude procurement fraud and collusion.
Deputy Finance Minister Karen Tamazian argued on Thursday that the amendments also banned the kind of “discriminatory” bidding requirements that were deplored by Shaboyan’s commission. “It is illegal to draw up such specifications,” Tamazian told RFE/RL’s Armenian service (Azatutyun.am). He added that his ministry is now closely monitoring government agencies’ compliance with the new rules.
The ACC’s Hoktanian acknowledged that the amendments were a step forward. He cautioned, however, that many laws are not properly enforced by the authorities.