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Audit Casts Damning Light on Albanian Broadcaster’s Tenders

Investigation 02 Oct 14

An audit report, which BIRN has obtained, says procurement procedures in Albania’s state-owned public broadcaster, RTSH, were often uncompetitive and even illegal.

Besar Likmeta
BIRN

Tirana

The headquarter of Albania’s public broadcaster RTSH in Tirana | Photo by Wikimedia

The report by the Supreme State Audit Office, covering the period from 2010 to the first half of 2013, has not been published before, even though the broadcaster is funded through a tax that every owner of a TV is obliged to pay.

Data compiled by BIRN from the report show that for the period in question, RTSH held 12 tenders for equipment and services for contracts worth 168.2 million lek (1.2 million euro) in total.

Ten tenders were held to buy equipment for RTSH’s radio and TV stations as it tried to transform itself from analogue to digital broadcasting. Two were held for security companies to guard its buildings and antennas.

Another, for the procurement of fuel for the station’s fleet of vehicles, worth 17 million lek (€121,000), was later annulled for no apparent reason, according the audit office.

According to the report, all the tenders were marked by a failure to uphold standard procurement procedures. Key documents were also missing. The net result was that proper competition was hindered.

Two companies, TBS96 and Eurokontakt, won most of the tenders for TV equipment. Often they were the only ones bidding.

According to the audit, in at least one of the tenders, TBS96 appeared to have had prior knowledge that it would be selected as the winner.

Although the State Auditing Office report holds the procurement unit of the public broadcaster responsible for repeatedly breaking procurement law, it has not filed charges with the state prosecutor. This is because it judged the missteps administrative in nature.

The audit office only leaves one recommendation for RTSH’s procurement department, which is to take “appropriate measures” to ensure a greater participation of bidders in tenders in future.

In an interview with BIRN, RTSH’s former director, Petrit Beci, dismissed the report as unprofessional and accused the authors of trying to blackmail him.

Beci, who was general director of RTSH from 2005 until late 2013, when he resigned for health reasons, said Albania’s procurement law was not appropriate for a media institution and for the demands that it entails.

Founded in 1938, Albania’s Radio and Television Station, RTSH, is a member of the European Broadcasting Union. It operates three television stations, four digital TV stations and four radio stations.

The broadcaster is funded through funds from the budget, from commercial advertising and from a license fee collected through electricity bills.

Allegations of corruption, political bias and mismanagement are nothing new in the company, which Albanians tend to see as a propaganda tool for whichever government is in power.

According to the State Audit Office report, the procurement unit at RTSH was not up to standards because the media giant had failed to train its staff as required by law.

Based on a 2007 government decision, staff in all procurement units in the public administration, in public agencies or in public companies are supposed to undergo “at least one training per year” in procedures at the Agency of Public Procurement.

According to the auditors, the procurement unit in RTSH, during the audit period, repeatedly failed to provide reasoningin the tender documents for the specific criteria it had imposed on bidding contractors, thereby breaching procurement law.

In many cases, the broadcaster imposed criteria on bidders that could be loosely interpreted, or which hampered competition, effectively restricting bidding for TV equipment to two companies.

In one tender, held in 2010, to buy video equipment for its flagship TV station TVSH, procurement commission records show that three companies entered bids but only two were evaluated – for no apparent reason. “There is no trace of the third company,” the auditors noted.

In another tender in 2010 to buy IT equipment, RTSH held the procurement procedure twice, annulling the first tender after two of the bidders did not qualify. However, it did not explain why the bidders were disqualified.

In a tender in 2012, auditors noted, one of the bidders, TBS96 sh.p.k, was so certain it would win the contract that it insured the contract on the same day that the bids were opened – before they were evaluated, also in breach of the law.

Quizzed on the audit report and on the lack of competition in RTSH’s procurement procedure, former director Beci defended his track record at the helm of the broadcaster, arguing that only a few suppliers of TV equipment were on the market.

“There are only two companies in Albania that sell TV equipment,” he said.

“The rest either don’t have proper documents or are just shops,” he added, noting the TBS96 sh.p.k was the major supplier while Eurokontakt was the other.

“Although I didn’t know which company would win a tender, because the documents are not drafted by the director, I always knew it would be one of these two,” he continued.

Beci, who has a long experience in film production and TV, having previously worked in Albania’s state-owned film studios and as director of the two largest private broadcasters in the country – Top Channel and TV Klan – said RTSH was the only national media outlet in Europe that held tenders for equipment on such a small scale.

Beci denied having profited at all from the tenders. However, he admitted that the tender system was open to abuse. Procuring equipment through engineers, based on reference prices, was the way to go, he advised.

“As long as there are tenders in Albania there will also be theft,” he said. “If it’s not the director stealing, it will be the bidders,” he added.

However, Beci described the audit on RTSH as illegal and accussed the auditors from the Supreme State Audit Office for blackmailing him.

“The Supreme State Audit Office has no authority over [independent] institutions that secure most of their funds on their own – they should only have audited for the money that RTSH received from the budget,” he said.

“The auditors often ask directors of state institutions to hire 20 people [in exchange for a favourable report]” he claimed. “This has happened to me as well,” he added, insisting, however, that he declined to succumb to such pressure.

The Supreme State Audit office did not return a request by BIRN to comment on the allegations.

The former television chief said that procurement for TV equipment was complex, and the alleged breaches mentioned in the audit report were only minor missteps.

“I cannot say that no small mistakes were made,” he said. “But, compared to the difficulties of running such institutions, they are more like bread crumbs after a meal,” he concluded.

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