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Conflict of Interest in Žitište: Serbian Progressive Party Alderman Gets 3.7 Million for Student Transportation

13. Apr 2021.
A bus stop in Žitište; Photo: Zoran Dedić
The Žitište municipal administration last year awarded a student transportation job worth 3.7 million dinars to Serbian Progressive Party alderman Dragan Rapaić. That public procurement was added to the plan the same day it was announced, while Rapaić’s company Eko Line 2020 was founded less than two months before that. Anti-Corruption Agency representatives say that this is a conflict of interest and say they will launch procedure against Rapaić and the Žitište municipal heads.

In the Municipality of Žitište, near Zrenjanin, a yellow school minibus last year transported 23 elementary school students from their home to school and back.

That image would not be unusual if the municipal administration in Žitište did not carry out public procurement in February 2020, which it had not foreseen a few months earlier. Although it had earmarked 4.5 million dinars for “public transportation” in the budget, the local administration added this procurement to the Public Procurement Plan subsequently, the same day it announced an invitation to bid.

In the 10-day application period, just one company submitted a bid – Eko Line 2020 – and so there was no ranking. The company asked for 3,720,000 dinars, 30,000 less than the estimated value of procurement. A contract was concluded quickly.

Nemanja Nenadić of Transparency Serbia says that the services should have been included in the procurement plan earlier:

“Late entry (…) could have led to other companies having less time to plan their participation in that tender, but also that the company owned by the alderman may have obtained that information before its competitors.”

The head of the Žitište municipal administration, Mladen Ajduković, says that he does not know why this procurement did not immediately become a part of the Plan, but does not think it affected the competition:

“This public procurement was posted on the Municipality of Žitište website and on the Public Procurement Portal. Those who follow the Portal could have known.”

The one who managed to apply for the competition was Eko Line 2020, the sole proprietorship of Dragan Rapaić, a long-time Serbian Progressive Party alderman in the Municipality of Žitište. The company had been founded less than two months earlier, the Center for Investigative Journalism of Serbia (CINS) has learned.

Even though he was on the Serbian Progressive Party and New Serbia election ticket called Let’s Get Žitište Moving – Tomislav Nikolić, already in 2012, Rapaić took office in the local Assembly in 2016. His second term of office as alderman is currently in progress.

When asked why he got into that business, Rapaić replies that he has to live off something, and an alderman’s supplement is not it. He adds that he did not know he would win the tender, because “it’s all a lottery.”

He explains that he did not found the company solely for the sake of this public procurement, rather he intended to provide transportation to children with special needs. He claims that no one in the Municipality even knew he had founded a company and that, even though he landed the procurement, the coronavirus epidemic disrupted his business:

“Everything had to be driven double. Forgive me [for putting it this way], I ate a piece of s*** by getting into the whole thing in the first place. You understand? You have a sum of money to use, and here they’re tearing up school timetables.”

Neither Rapaić nor Ajduković could specifically say how much was ultimately paid for this job due to the coronavirus pandemic. While Ajduković claims that probably 50 percent less money was given, Rapaić thinks he was paid the whole sum.

Rapaić also supported the Serbian Progressive Party with 40,000 dinars in 2018 and with another 40,000 in 2019. Ajduković donated the same amount in 2018. The administration is the student transportation contracting party, while Žitište Mayor Mitar Vučurević signed the contract with Rapaić.

Nemanja Nenadić believes that these officials should have addressed the Anti-Corruption Agency due to potential conflict of interest:

“Both the head of the municipal administration and the mayor are in a dependent relationship with the alderman, given that the Assembly controls both and oversees their work.”

Žitište town center; Photo: Zoran Dedić

Agency representatives confirmed to CINS that there was a conflict of interest. By checking official records, they determined that, despite having been obliged to do so, Rapaić, Vučurević and Ajduković had not notified them of that.

“The Agency will launch procedure against them to decide on the existence of violation of provisions of the Law on Prevention of Corruption,” reads the reply.

Rapaić says that only later did he find out it was a conflict of interest, but did not answer the CINS journalist’s question about why he did not inform the Agency then. He claims that this was one of the reasons why he had verbally offered his resignation as alderman to the party and the Municipal Assembly.

“I didn’t get an answer. Is that a problem now? I can submit [my resignation] now.”

Although he says it bothers him that he had a conflict of interest last year, Rapaić could not explain why he took part in public procurement this year, too.

Asked if he knew it was a conflict of interest, Ajduković replies that he did not even know Eko Line 2020 was Rapaić’s company. Had he known, he says, he probably would have reported it, if that is a legal obligation.

The Agency states on its website that it recommended Vučurević’s dismissal from the position of mayor in November 2018. First, they handed him a warning for not having transferred his management rights in the Primo Trade company within 30 days after the date of his election. Since he failed to do so even after the warning, they recommended that the local assembly dismiss him. Vučurević was not dismissed and was re-elected as mayor in 2020. You can find the Agency’s procedures against officials from 2010 to November 2018 in CINS’ database.

CINS did not get any answers to questions regarding this public procurement from the mayor. Vučurević told the CINS journalist that he could not talk and that he would call her back, but did not do so by the time the article was published. Representatives of the municipal administration did not say why this procurement was not part of the initial Public Procurement Plan for 2020, why it was added to the Plan on the day of announcement of the invitation to bid, and other questions, either.

Same procurement more than a million dinars cheaper this year

Procurement of the service of transporting elementary school students in the territory of Žitište ended up in this year’s Public Procurement Plan. Even though he offered a lower figure than before, about three million dinars, this time Rapaić had competition and did not get the job. The winner was the Banat Trans transportation company with a conspicuously lower bid – about 2.3 million dinars without VAT.

Moreover, in 2021 the value of the service was estimated at some four million dinars, i.e. about 340,000 dinars more than in 2020.

Nenadić thinks that last year the municipal administration did not do all that it could have to encourage potential competitors to apply:

Rapaić’s former company now owned by utility company

Dragan Rapaić had a transportation company before Eko Line 2020. According to the data CINS obtained, Rapaić bought the Ekotrend-Plus company in March 2019 and already in August changed its activity to passenger transportation.

Several days later, he sold the company to Dejan Denić, and Ekotrend-Plus posted a loss of 1.9 million dinars at the end of the year.

In September 2020, Public Utility Housing Company EKOS Žitište became its new owner. At the end of that month, Ekotrend-Plus contracted student transportation with the municipal administration and seven high schools in nearby Zrenjanin, for about two million dinars per month.

“The fact that in 2021 the Municipality of Žitište got a significantly better bid when more companies took part in the competition than in 2020, when there was just one, is a clear signal that the Municipality did not do everything right in preparing this procurement last year.”

The municipal administration representatives did not send CINS the documentation based on which they had estimated the value of procurement in 2020, but rather a memo in which they state that the price was set after they had checked the prices with the local transportation companies and the services invoiced by the Public Utility Housing Company EKOS Žitište.

“We would like to point out that the services of transportation of (elementary school) students in the year in question, 2020, saved a significant amount of funds in the Municipality of Žitište budget,” says the memo.

Rapaić says that he prepared the bids based on distances, kilometers and expenses. He believes that this year’s bid by Banat Trans is below the real price, but did not want to complain and cause the annulment of the tender.

 

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The making of this story was supported by the Open Society Foundation, Serbia. The sole responsibility for the content of the story lies with CINS and does not necessarily reflect the views of the OSF, Serbia.

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