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ÚOHS rejects favoritism charges

Winner of e-toll system tender must await appeals rulings

By František Bouc
Staff Writer, The Prague Post
February 1st, 2006 issue

The Anti-Monopoly Office (ÚOHS) ruled Jan. 27 not to cancel the controversial tender for an electronic toll system on Czech roads, rejecting charges by two unsuccessful bidders that the competition's conditions were unfair.

The Transportation Ministry cannot sign a contract with the winner, Kapsch of Austria, because the two companies — Mytia and Autostrade — have appealed the ÚOHS ruling.

"No contract can be signed until the issue is brought to an end," said ÚOHS Chairman Martin Pecina.

Pecina will review the appeals and make a final ruling within weeks.

The battle between the companies and the ministry dates to November, when the ministry eliminated three of the four short-listed suitors on the grounds that their bids were insufficient. Two days before Kapsch's Nov. 21 selection, the ministry said the bids of the Mytia consortium (Ascom Fela, Damovo and the ABD Group), Autostrade, and a consortium of A-Way and AZD lacked liability insurance and other financial guarantees.

Mytia and Autostrade called the ministry's decision discriminatory. They argued that the decision violated a condition of the tender stipulating that price would be the main criterion in selecting the winner.

Indeed, Kapsch won the tender despite its offer to build the system for 22 billion Kč ($956 million) comin in billions higher than Mytia's and Autostrade's.

In its Jan. 27 ruling, the ÚOHS found that Autostrade had submitted an insufficient bid, and that Mytia, while its bid was complete, was not in any way discriminated against.

Autostrade Group Director Piero Bergamini said the tender was specifically tailored to Kapsch. He said the ministry's decision to eliminate the other suitors was illegal and referred to the ÚOHS's evaluation of Autostrade's initial complaint as "obviously rushed."

Should Pecina reject the appeals, Mytia and Autostrade are prepared to appeal to the European Commission.

Kapsch has insisted the tender was fair. Board member Erwin Toplak said the unsuccessful bidders are trying to delay the ministry's decision.

This isn't the first time the e-toll tender has faced controversy. Also in November, suitors offering satellite toll technologies complained that the rules clearly favored companies manufacturing microwave systems.

As a result, satellite systems providers decided not to participate.

The delay is a blow to the government, which was planning to collect 8 billion Kč a year from the system starting in 2007.

Jiří Kubínek, deputy transportation minister, said the government needs to sign a contract with a winner now in order to start bringing in toll revenue by 2007.

In the year following the system's launch, the government will collect tolls on 970 kilometers (603 miles) of motorways from trucks weighing more than 12 tons. The system will eventually cover more than 2,000 kilometers of roads in this country.

František Bouc can be reached at fbouc@praguepost.com


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