Defense Field State Procurement Contain Intense Corruption Risks: Expert
26.07.2018
14:00
On July 26 Artak Manukyan president of National Center of Public Policy Research presented the monitoring results of 2017-2018 defense field state procurements at Media Center.

The speaker noted the importance of the methodology and stated that they used only open data. The economist presented the dynamics of budget expenditures which shows an increase in the Defense Ministry budget in 2017 from  200 billion to 294 billion AMD.

As to last year's procurements the economist noted that the total data based on open sources made 32 billion AMD, in spite of the planned 43 billion procurement.

“To put it metaphorically 32 bilion AMD “cake” is divided between 358 winners. The first place goes to Flesh, Elit Capital LLC, Gazprom, Avangard LLC, Elit LLC. They are the major winners. When we look at the number of winners we see they participated in one tender, that is to say it didn’t happen as a result of a few tenders. There is no quantity wise centralization, but there is such finance wise”, says Artak Manukyan.

Full list of companies can be checked out here  www.policyobserver.am .

As a result of comparing a number of factors the economist sees increasing corruption risks regarding a number of companies.

“Some companies while winning in state procurement tenders don’t have employees at all. There is a company that serves a contract of providing uniforms for millions of drams meanwhile has registered only one employee. For instance Garant LLC is conducting large scale construction for 544 billion AMD but has only 8 employees, it is very dubious. Or K.K.F. Trading LLC providing uniforms for the ministry of defense, police, NSS, ministry of justice penitentiary services, investigative committee but has only one registered employee. It is to be noted that it can’t be importer because we have checked the declarations which point to domestic production. It is here that the problem comes up with regard to proper tax obligation”, Artak Manukyan stressed.

He also notes that at the end of the year the ministry of defense mainly buys souvenirs, golden watches and others. The speaker thinks that those are the funds saved during the year and such luxurious procurements being budget wastes are made in order not to return the money to the state budget.
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