OREANDA-NEWS. July 11, 2013. Arbitration Court supported the position of Moscow OFAS and found unlawful a decision of the Moscow Government to increase investments, technical characteristics and refinancing of No.1 Garbage Recycling Plant without a tender.

In 2004 a tender was organized for reconstructing No.1 Garbage Recycling Plant. The essential conditions of the tender included, in particular, the contract prices (the scope of investments and refinancing the investor’s costs form the city budget), as well as technical characteristics of the Plant (the volume of waste processing).

“Budagep-Budalux” Ltd. was pronounced the winner.

Investments were specified at around 176 million euro;

Refinancing - 270 million euro;

Plant productivity— 360,000 tons of waste per year.

In 2009 and 2010, however, the Moscow Government increased investments, refinancing and technical characteristics of the plant (without competitive procedures).

In sum:

Refinancing investor’s costs increased up to more than 1 billion euro; productivity increased twofold – 700,000 tons;

Also in 2010 the Moscow Government instructed to transfer the rights on the investment project to the new investor.

On 18th February Moscow OFAS found that the Moscow Government violated Part 1 Article 15 of the Federal Law “On Protection of Competition” completing an investment project for reconstruction of No.1 Garbage Recycling Plant.

“A government body cannot change the essential conditions of a contract concluded upon the outcome of competitive bidding, and especially designate a new investor. The Court fully supported out position; now we are determined to terminate the contract between the Government and the new investor for the plant reconstruction”, pointed out the Head of Moscow OFAS, Rachik Petrosyan.