Lithuanian company “Biseris” entangled in a fraud scandal in Latvia

  • 2020-07-28
  • Nils Virkavs

The Lithuanian company “Biseris”, which has previously allegedly committed fraud and against which criminal proceedings have been started in Lithuania, is allegedly attempting to commit fraud while participating in a procurement announced in Latvia by the State Joint Stock Company “Latvian State Roads”. When accused of fraud, “Biseris” was reportedly trying to discredit and to accuse of corruption the employees responsible for the procurement.

An article published on the online news portal Enough on 31 March, which first informed the Latvian public about the dubious actions of “Biseris”, prompted the state JSC “Latvian State Roads” to re-evaluate the offer by “Biseris” and to stop the procurement in progress. Instead, the state JSC “Latvian State Roads” extended an earlier contract to be able to complete all the necessary work of marking the roads before the start of the spring and the summer season.

“Biseris” has publicly taken pride in offering the lowest price for the procurement by the state JSC “Latvian State Roads” for carrying out repair works of the horizontal markings on the asphalt surfaces of national roads between the year 2020 and 2025. According to the documents of opening the tender for procurements, “Biseris” offered to carry out the repair works for the horizontal marking of state roads in central regions for 6.018 million euros, while the Latvian company JSC A.C.B - for 8.026 million euros. In the Vidzeme region, “Biseris” offers to carry out this task for 6.69 million euros, while M-Z, LLC – for 9.97 million euros. A sum of 6.27 million euros is proposed by “Biseris” for repairing the road markings of the roads in Kurzeme, while CTB LLC is offering a price of 10.88 million. In the Latgale region, the offer by “Biseris” is 7.63 million euros, while the offer by MKOR LLC is 9.22 million euros.

While “Biseris” was presenting this offer, the Polish cooperation partner of “Biseris” revoked offers to lease trucks for the marking of the roads, refusing to collaborate. As “Biseris” themselves do not have the required equipment, this effectively means that they would be unable to carry out the services they are offering to “Latvian State Roads”. Road experts have suspicion that “Biseris,” which is the only company that was able to apply for all four parts of the procurement, can offer such low prices only because they intend to act similarly in Latvia as they have in Lithuania in the past.

After great competition in the procurement by the Lithuanian state road maintenance company, the largest share of the orders were given to “Biseris” which was offering the lowest prices. Afterwards, there were doubts that the company is being dishonest and using regular paint instead of a polymer material in the marking, though the price they are offering is for marking with the polymer. In their offer “Biseris” indicated a price – two euros per square meter of marking with paint, but nine euros for marking with polymer materials. Despite the fact that in the documents polymer was indicated as the material used for marking the roads, inspections revealed that instead of a polymer, regular paint had been used.

On 11 December, 2018, court officers headed to the main roads A4, A15 and A16, where they took two samples of the horizontal road marking (for the axial and the pedestrian markings). All six samples were sent to Poland's road and bridge inspection institute. It was discovered that only the axis of the A4 highway had been marked with polymer materials (thin-layer cold plastic), but all the other samples (the axial and the pedestrian markings of the A15 and A16 highways) were marked using simple road paint. In this case, the only works inspected were those which were carried out according to the “Biseris” procurement in Vilnius, while “Biseris” has signed ten contracts with the Road Directorate. An investigation of this infringement is still being carried out by the judicial authorities of Lithuania. Further information about “Biseris” actions in Lithuania can be found here.

In their offer to “Latvian State Roads”, “Biseris” has presented only the price and the standard European procurement form, without attaching a qualification, due to which “Latvian State Roads” have demanded a full package of documents, because of which the evaluation of the results and the announcement of the winner has been delayed.

In the meantime, “Biseris” announces itself in Latvia with a PR campaign celebrating their experience in Lithuania, Belgium, the Netherlands and Saudi Arabia.