Česká spofiitelna is accusing the Finance Ministry of unfair bidding practices after it awarded the job to HVB Bank in alliance with insurer Česká pojišťovna. Česká spofiitelna claims HVB dramatically underbid competitors to win the contract and wants the Anti-Monopoly Office (ÚOHS) to look into the fairness and transparency of the tender.

With price being the key criterion, HVB Bank emerged as a clear winner, having offered to manage the accounts for 50 hellers. Meanwhile, ČSOB said it would charge 1,200 Kč, Česká spofiitelna asked for 12 million Kč and Komerční banka's demand was 100 million Kč.

"The dumping price of only 50 hellers for administering the subsidies worth hundreds of billions of crowns in the next four years violates the law on public tenders, which stipulates that all extremely low-value bids should be excluded," said Laďka Hadravová, Česká spofiitelna's spokeswoman.

Česká spofiitelna has administered the government's EU subsidies accounts since 1993, and the bank keeps some 80 percent of public accounts owned by towns and municipalities.

Hadravová added that the Finance Ministry said earlier that the expected cost for administering the accounts was about 200 million Kč.

Finance Ministry spokeswoman Petra Krainová denied that HVB Bank was guilty of price dumping.

"When assessing the bids, the Finance Ministry asked three bidders, including Česká spofiitelna, for clarification of their very low prices. All of them offered satisfactory explanations. That is why the prices could not be labeled as 'dumping,' " Krainová explained.

She added that while HVB Bank and Česká pojišťovna were selected in June, the Finance Ministry has not signed a final contract with them.

Dušan Hladn˘, director of HVB Bank's corporate clients department, described the 50-heller price as symbolic, adding that it was difficult to estimate real costs related to managing the government's euro accounts. What's more, he said, the value of the assignment to distribute EU subsidies is inestimable.

"We'll get in touch with a number of subsidy recipients who are not among our current clients, and there will be a chance that they'll become our customers," Hladn˘ said.

He characterized Česká spofiitelna's complaints as driven by the bank's desire to force out other bids.

In the ideal scenario, Hladn˘ said, "The protests would lead to the tender's cancellation, and a new tender. Česká spofiitelna would then be able to adjust its offer in a way that it could win."

He warned that calling a new tender could have negative impacts on the distribution of EU subsidies to local businesses beginning in 2007.

Rejected zero

Another reason the Finance Ministry's acceptance of HVB Bank's offer is causing turmoil is because the ministry rejected an offer from ČSOB last October to maintain the accounts for free.

"The reason for canceling that tender was not the extremely low offer, but rather the fact that we could not calculate with a zero in our assessment methods," Krainová said.

She added that the ministry merely exercised its previously stipulated right to cancel the tender.

ČSOB also appealed to ÚOHS, but the office did not consider its appeal founded because of the ministry's right to cancel tenders, ČSOB spokesman Martin Orság said.

ČSOB has not questioned the second round.

The ministry has been quite inconsistent, said Česká spofiitelna's Hadravová. She added that, following the rejection of the ČSOB offer, Česká spofiitelna attempted to come up in the second round of the tender with a minimal price that would merely cover expenses related to administering the accounts with EU subsidies.