Billions wasted on Latvia's landmark bridge, report reveals
Mar 18, 2009, 11:06 GMT
Riga - A landmark bridge project in the Latvia's capital Riga wasted billions of dollars in taxpayers' money, according to an official government report Wednesday.
The 800-metre-long Dienvidu Tilts or 'Southern Bridge' was the biggest construction project in the Baltic states for 25 years and opened in November 2008 -but has been beset by controversy and rumours about its true cost.
Now an official audit conducted by state auditor Inguna Sudraba says at least 27 million lats (50 million dollars) of public money was wasted on shoddy tendering processes and poor contracting procedures.
Even that sum pales into insignificance compared to ballooning construction costs which rose from an initial estimate of 108 million lats to 570 million lats.
'People did not follow good management rules and were not interested in using taxpayers' money as efficiently as possible,' Sudraba told Deutsche Presse-Agentur dpa.
'Over several years double payments were being made for the same things,' she said. 'This could be incompetence if it was just one case, but these payments were being made every month,' she added.
The report paints a damning picture of Riga city council's procurement procedure.
'Before taking its decision to commence construction on the bridge, the municipality had not finalised either the project, its deadlines or its result,' the audit office said.
The audit also says EU money was used inappropriately.
'It (Riga city council) had not undertaken appropriate and sufficient research on the project's requirements and their impact on traffic problems in Riga, and failed to develop a project feasibility study to qualify for the European Union's Structural Fund co- financing,' the report says.
Agreements including one with Germany's Deutsche Bank on a 567 million lat loan were concluded in violation of standard book-keeping procedures, Sudraba told dpa.
Contracts involved convoluted currency exchange deals to make it seem that less money was being borrowed for the bridge than was really the case.
'It's not sound practice,' Sudraba said.
The information has now been passed to Latvia's state prosecutor who will decide if criminal charges can be brought.
The newly-formed government of Valdis Dombrovskis now finds itself having to slash amounts roughly equivalent to the bridge's construction cost from the state budget, in order to qualify for a 7.5-billion-euro (9.5-billion-dollar) assistance package brokered by the International Monetary Fund.
In a television interview on Wednesday morning Dombrovskis expressed little surprise at the damning nature of the bridge audit, describing the bridge itself as being of 'very average quality' considering that it became one of Europe's costliest civil engineering projects.