Fast dealing by the İETT

Aykut Küçükkaya
 
The company, which sold the buses to the public body in euro, is selling the same buses on its website more cheaply in Turkish lira. İETT, which carries passengers all over Istanbul, has its own staff transported by subcontractors.
TOTAL OF 500 MILLION LIRA
Contained in the report in which Istanbul Metropolitan Municipality (IMM)’s 2016 tenders are examined is an attention-grabbing section devoted to Turkey’s largest public transport body, İETT. Tarık Balyalı, who made a dissenting statement about the IMM Auditing Commission’s report, has closely scrutinised eight of the 92 tenders conducted by İETT in 2016. The total value of these tenders amounts to nearly 500 million Turkish lira. Important findings are contained in the report concerning, ‘The exchange-rate loss incurred by İETT, having put 375 buses out to tender in euro, the finding that the company that landed the bus tender was selling the same buses more cheaply on its own website, the way the construction company KİPTAŞ was awarded driver services to İETT at precisely the pre-tender estimate, the way İETT puts out staff transport works to tender and the way tailor-made tenders are arranged.’
On 9 January 2017, Osman Gökçebaş and Erdal Yılmaz from the AKP and Tarık Balyalı from the CHP were elected to the Istanbul Metropolitan Municipality Assembly Auditing Commission, created to ‘audit Istanbul Metropolitan Municipality’s income and expenditure and its accounts and transactions in 2016.’ Balyalı drew up an eighteen-page dissenting statement to the Auditing Commission’s report on 31 March 2017. A separate section has been devoted to İETT in Balyalı’s statement and it contains some noteworthy findings. İETT held 92 tenders in 2016. The Auditing Commission, for its part, examined eight tender files relating to 2016. The monetary value of the tender files that were examined totalled 462,476,000 lira. There follows a summary of the notable sections in the report concerning the tenders valued at nearly half a billion lira:
DRIVERS FROM KİPTAŞ
HIGH PRICE FOR İETT
1 The tender for the ‘Procurement of 370 Diesel Solo-Type Buses’ that had previously been cancelled twice was held in 2016. The estimated cost was 257,000 lira. The tender price, however, was denominated in euro. The tender attracted a lot of public interest and was won by the company BMC. The euro stood at TRY 3.3318 on the date on which the tender was conducted.  However, the euro later came close to TRY 4. IMM was forced to pay an exchange rate difference of 80,000 lira per vehicle, amounting to 30 million lira for the 375 buses. When the price per vehicle is calculated based on the current value of the euro, this comes to 561,600 lira + VAT, while the per-vehicle price on the contracting company’s website is shown to be 490,000 lira + VAT. When approached from this standpoint, very considerable public loss is involved.
TAILOR-MADE TENDER
2 The tender for asphalting and wall paining İkitelli garage in which two companies bid had an estimated cost of 174,000 lira, while the tender price was 169,000 lira. However, details such as the size of the area to be painted, the quality and quantitative and qualitative content of the materials to be used and the duration of the works were totally absent from the tender’s technical specifications. An environment of competition was not created in this tender, which was entirely tailor-made, and the tender specifications appear to have been put together in a random manner.
KİPTAŞ THE SOLE PARTICIPANT
3 The estimated cost of the Driver and Service Worker Staff Service tender was set at 235,408,000 lira. In this tender, which IMM subsidiary KİPTAŞ won as a participant outside its own area of expertise, no other company apart from KİPTAŞ entered. KİPTAŞ, which submitted a price 6,000 lira below the estimated price, landed the tender for 235,402,000 lira. The procuring by the country’s largest public transport company of its entire complement of drivers from a construction company gives a serious indication of the IMM administration’s standpoint towards the matter. It shows that it is not using public funds effectively.
TENDER FOR STAFF-BUS CONTRACTOR
4 The total cost of staff-bus tenders for the Anatolian Shore and European Shore in 2016 amounted to 13,366,000 + VAT. The statutory framework must be created to enable İETT, which carries passengers all over Istanbul, to transport its own staff and make the arrangements for this. It is unacceptable that the same firm constantly wins this tender. This situation amounts to a serious shortcoming in terms of the effective use of public funds. With İETT perfectly capable of meeting its own staff transport requirement in line with its needs with the amount it pays out by way of company contribution and VAT, thanks to this option not being taken and the work being assigned to a contractor, there is a large-scale transfer of funds to another entity.
 ‘There is no competition in tenders’
The CHP’s Tarık Balyalı, one of three members of the Auditing Commission that audited Istanbul Metropolitan Municipality (IMM)’s 2016 affairs, included some important warnings concerning municipal companies in his report: ‘There are 35 companies that are in partnership with the IMM and its subsidiaries. On examining the tenders that these companies have obtained from the IMM over the years, we see them obtaining volumes of business in a constantly increasing amount. IMM companies entered into engagements with the IMM under 90 tenders valued at 2,990,905,000 lira in 2014, and under 124 tenders valued at 2,149,093,000 in 2015.  The amount of the engagements that IMM companies entered into under 104 separate tenders in 2016, on the other hand, was 4,300,780,000 lira. This amounts to a 100% increase. We see, in particular, that our subsidiaries are the sole participant in a considerable number of high-value tenders. We have also established in the examinations we have conducted that in some of the tenders won by our municipality’s subsidiaries, technical specifications have been compiled in a way that prevents competition and the participation of other companies. Tenders in which IMM subsidiaries participate should also be held in a transparent and competitive environment. Other companies should be enabled to enter these tenders.’