Why are we investigating purchase prices during the corona crisis?
“What do you want then? On one hand, you blame the government for not being able to secure enough respirators, and now you blame us for purchasing them very expensively,” reproached Transparency Slovakia one of our fans on Facebook. The fan is right to some degree. It should be a primary goal of the government to ensure the security of the health of the nation during the crisis. We emphasized this fact in many of our posts.
At the same time, it doesn’t mean that we should completely abandon the inspections and give the state representatives a free hand with all transactions. Long term Slovak experience, and also many examples during the current world crisis, clearly show that groups are willing to use the crisis for own profit. We shouldn’t underestimate them. On top of that, the more resources we waste in inefficient medical supplies purchases, the more we will miss them in a potentially longer crisis.
More expensive than in the Czech Republic
So what did we warned against in the past days? In the first place, the government started purchasing the masks, respirators, and disinfection very late. It resulted in low transparency and overpricing. The biggest purchase of healthcare supplies worth 22.5 million € was settled by the Administration of State Material Reserves on March 17! The crisis was accelerating at the time and the government imposed strict epidemiologic measures.
Slovakia buys respirators more expensively than the Czech Republic
(Comparison of FFP2/N95 respirators purchases during corona crisis)
Price comparison between the Czech Republic and Slovakia
It concerns a contract with an until-then unknown one-person firm Lacorp, which included the delivery of 600,000 units of lower-standard protection respirators for 8.74€ per unit (VAT not included). The Czech Ministry of Health bought similar respirators for ⅔ of the price, only in lower quantities (see Table 1.1). Both countries had an emergency state declared on the day of purchase and the world market for masks and respirators was affected by the corona crisis for weeks.
On the same day as the mentioned Slovak contract was settled, the Ustecky kraj published a purchase of 100,000 respirators for a price of 5.90€ per unit in the Central Register of Contract of the Czech Republic. The Ustecky kraj and Administration of State Material Reserves of Slovakia, therefore, bought large quantities of masks at the same time but with a significantly different price (ASMR bought six times more masks than the Ustecky kraj!).
The purchase by a Slovak Nationalists Party official
We consider even more contracts that ASMR settled last week as problematic. It concerns contracts with a company called Green Day – its CEO is a regional official of the Slovak Nationalists Party, Slavomir Leysek, and its owner is his wife Iveta.
The state bought from this block-of-flats-based LLC in Bratislava’s neighborhood Raca 190,000 units of surgical masks for 390,000€. One mask, therefore, costs 2.052€ (including VAT), which is even more than in the criticized purchases with A-testing (1.322€) and Lacorp (0.996€).
For a comparison, special textile and washable masks with anti-bacterial silver will be sewn by Slovak women in Zornica for 2.70€ per unit including VAT.
Coincidentally, we pointed on the Green Day company before the elections. Slovak Nationalists Party was buying billboards and other services through the Leysek’s unknown company. Similarly, like other parties, we criticized the SNP for nontransparent campaigning, since they hid part of expenses in a close-tied company. Green Day even had tax payment issues, equal to 2,318€ in January, for more than a year.
Breaking the law
ASMR does not only buy masks from Leysek’s firm but also 1,100 protective half-masks and 2,200 filters, accounting for 62,000€. This smaller contract was settled on Wednesday, March 11. By signing the two aforementioned contracts, the state institution broke the law because on that day Green Day was not listed in the Register of Public Sector Partners (a register showing who profits from state orders). It was added on March 17 – a week after signing the contracts.
ASMR’s explanation of violation is that the company issued, on the day of settling, a declaration of additional registration into the register. However, it doesn’t change the fact that the law was broken and the state institution now faces a fine.
Again, we are emphasizing that we understand the key role of the state in this situation – and that is to secure the health of its citizens. At the same time, it is right to inspect the means of how this goal is achieved. It is also essential to ask why did our state begin with these purchases in the time of the crisis even for the price of breaking the law. If the new government doesn’t want to be labeled as “failing”, it should deeply review the processes related to the protection of citizens by the end of the crisis at the latest.
Michal Piško, Ľuboš Kostelanský, Lukáš Zajac
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