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Bishkek – Kara-Balta: lobby stronger than rules?

Reconstruction of road Bishkek - Kara-Balta should end in 2017. Now it is the second half of 2016, but the work on the road hasn't even been started. The parties still can't decide whom to entrust the implementation of this important project.

Dancing around the tender

Those who often drive on this road well know its current state - it needs a repair. However, everything depends on money. The republic has no own funds for this project, so it has to turn to the international community. For almost a decade one was looking for a foreign donor for the project. Finally the Asian Development Bank agreed to finance the project. Project cost - $100 million. The ADB provides $65 million loan and a $35 million grant. We will repay the loan in 32 years.

Despite the fact that most of the amount is the loan, ADB proposed to Kyrgyzstan rather tough conditions. International financial institution controls the process of the tender for reconstruction of the road. The results of the competition won't be approved  without its consent. Tender for construction of road was announced in December 2015. In mid-June 2016, 16 applications were opened. As a result, six of them were found not complying with the requirements of the competition, and one company is included in the black list of the ADB. During the study of the applications of other candidates other interesting facts were revealed.

The lower price of $70 million at an estimated project cost of almost $100 million was suggested by China Railway №5 Engineering Group Co. LTD. - affiliated company of China Railway Group. The company is known for the fact that in 2009 it tried to enter the European Union market. Then its subsidiary with two Chinese partners won the tender for the construction of two highways in parts of Poland. The project started well in terms of development and preparation. However, later on the works stopped in the later stages because of poor management within tight regulatory framework. As a result, the project failed, China Railway Group was replaced by another contractor.

In 2012, the Council on Ethics of Norway conducted a study of the companies that are invested by the country's pension fund. In 2014, it recommended the Ministry of Finance to exclude China Railway Group from the list of companies invested by the Pension Fund - because of corruption.

Experts questioned that it was possible to implement the project effectively at such a low cost of the project, which was offered by China Railway №5 Engineering Group Co. LTD. Even the roughest calculations showed that the work schedule can be shifted, and the cost of the work will increase significantly.

Money talks

After the hype, which has risen in the media, the tender commission more thoroughly examined the proposals and everything about the applicants. The Commission has not voiced the winner of the tender and the reasons for its choice until now, referring to the confidentiality terms.

"According to the instructions of the bank, issue of a tender shall be confidential. Due to the fact that there is interference from the outside, we appealed to the ADB with a request to give information to the public. However, we were told that information about the participants of the tender, prices, offers will be published after the ADB will make a decision on awarding the contract to some company. Prior to this, any information can affect the outcome. We must strictly observe the laws of the bank. While the evaluation process is not completed," the head of the group of investment projects realization Kubanychbek Mamaev commented such secrecy to 24.kg news agency.

Whatever it was, but murder will out. And new scandal arises around the results of the tender. From own sources 24.kg news agency found out that as a result the Commission's decision was made not in favor of China Railway №5 Engineering Group Co. LTD. However, the Asian Development Bank strongly disagrees with such state of affairs. On hand of the agency there is the official letter from the Director of Transport and Communications Department of the ADB's Central and West Asia. The document in black and white says - ADB doesn't agree with the decision of the tender commission not to support the applicant, who offered the lowest price. ADB is also against the recommendation to award the contract to the party with the second lowest price.

"ADB recommends awarding a contract to party with the lowest price - China Railway №5 Engineering Group Co. LTD. as the applicant, best meeting all the requirements. In order to minimize the risks due to the low price offer, we recommend to request from the China Railway №5 Engineering Group Co. LTD. a guarantee for the execution of works, increased to 20 percent of the project cost, and / or have a guarantee issued by a local bank to perform relevant obligations," the letter said.


Only if China Railway №5 Engineering Group Co. LTD. doesn't agree with the new conditions, the Ministry of Transport and Roads should contact the ADB for prior approval of the second tenderer, which offered the lowest price.

It turns out that, despite expert opinion and not quite good reputation of China Railway №5 Engineering Group Co. LTD., an international financial institution openly lobbies for the interests of this company.

But, recall, most of the allocated amount - a loan, and Kyrgyzstan will pay it back, that is, all of us, and even our children. But for some reason we don't have the right to vote... Are we being twisted the arms?