The company “Etmax” from Banja Luka, which builds small solar power plants, is simultaneously working on a feasibility study for these power plants. Under very peculiar circumstances, “Etmax” was awarded this public procurement by “Elektroprivreda RS”.
Written by: Miljan Kovač
The illogicality of the situation is best illustrated by the fact that Etmax’s bid of only 9,480 BAM was accepted as the most favourable, despite the total estimated value of the contract being 45,000 BAM. The procedure of this public procurement, which is full of irregularities, indicates that both the management of ERS and Etmax considered it essential for this company to conduct the analysis. In any case, everything indicates that the priority for the Banja Luka company in this case was not just one-time profit, but rather maintaining a partnership with the public enterprise, which will prove to be highly beneficial in future projects of solar power plant construction and electricity production.
The numerous public procurement contracts and awarded concessions for solar power production testify to the favoured status of this business entity within the energy system of RS.
Quite (un)natural indeed
The decision to choose the most favourable bidder, awarding Etmax the procurement of the study “Analysis of the economic and financial feasibility of small solar power plants for household needs based on annual electricity consumption and price trends,” was signed by the acting CEO of Elektroprivreda, Luka Petrović, on January 10th of this year.
According to the justification for the decision on the tender that was announced on November 29th of the previous year, five bids were received, and all were considered acceptable. The criterion of “lowest price” was used to select the most favourable bidder.
The lowest bid in the amount of 34,600 BAM was submitted by “CPK” Ltd. from Banja Luka, while Etmax requested 45,000 BAM for the same service, offering a discount of 1,000 BAM.
The other bidders submitted bids equal to or slightly lower than the estimated value.
As provided in the public procurement announcement on December 23rd of the previous year, an e-auction was held in which all five bidders participated, and Etmax reduced the price of its bid to only 9,480 BAM. Undoubtedly, this is the significantly lowest price, but it is questionable whether the procedure was carried out in accordance with regulations.
Transparency International Bosnia and Herzegovina point out the provisions of the “Regulation on the Conditions and Methods of Using e-Auctions.” Article 8 of the regulation states, among other things: “Any reduction in the price of a bid in the case of the lowest price as a criterion for contract award is possible within the range of 0.1% to 10% of the lowest initial price of all bids.”
Clearly, the price reduction in this case was significantly higher than prescribed.
Furthermore, the Law on Public Procurement, specifically Article 66, stipulates: “If the contracting authority considers that the offered price is abnormally low, it shall request the bidder in writing to justify the offered price. If the bidder fails to provide a valid justification to the contracting authority, which may include a comparison with market prices, the contracting authority shall reject the bid.”
Photo: ETMax, Illustration
It is evident from the decision to choose the most favourable bidder that Elektroprivreda did not perceive anything “abnormally low” in the fact that the bidder offered a price several times lower than their estimation.
Consequently, it can be considered “natural” for future electricity producers to make investment decisions in small solar power plants based on the analysis conducted by Etmax and, of course, choose the same company for the installation of solar panels.
The favoured bidder indeed
Etmax was awarded a lucrative contract in February of last year by Elektroprivreda. The contract was for the “Study on the Use of Solar Energy for Household Needs as ‘Prosumers’ (Consumer/Producer) in a Neighborhood in the City of Trebinje.”
Etmax was the only bidder, submitting an offer worth 148,000 BAM, excluding VAT, so there was no competition in this particular project. Given the specific requirements outlined in the tender, there was hardly any room for competition.
As an example, the bidders were required to demonstrate “successful experience in executing two or more contracts with a similar nature and complexity to the subject of procurement in the last three years.” Considering the complexity of the public procurement, which includes feasibility studies, supervision, installation of solar systems, and roofing work for solar panels, along with the given conditions, it was not expected that multiple bidders would express interest in this project.
Therefore, Etmax once again obtained a contract where it analyzes and, based on its own analysis, sells and installs solar panels. They have their own range of products at their disposal.
In the meantime, this company has signed a series of direct procurement agreements with public enterprises and institutions in RS. The collaboration with Elektroprivreda is at the forefront. In March of this year, this public enterprise organized the fourth Energy Summit (SET) in Trebinje. Among the numerous sponsors, Etmax stood out as the “golden sponsor” of SET, both this year and the previous year. In this way, the company has at least partially “repaid” the contracting authority for the projects that have been generously awarded to them.
It appears that Etmax has progressed to a higher phase of business operations. The director of the company, Siniša Maksimović, signed a contract with the Minister of Energy and Mining, Petar Đokić, at the end of March this year for the construction and utilization of the solar park “Nevesinje.”
Photo: RTRS, Minister Petar Đokić and Siniša Maksimović signing the Concession Agreement
Etmax has been awarded a concession for the construction of the largest solar park in Bosnia and Herzegovina to date, with a capacity of 500 megawatts. The value of this investment is 880 million BAM.
It is not known how the company, founded in 2012, will secure such funds. However, Siniša Maksimović stated after signing the concession agreement that they have “multiple models available to finance the construction of the solar park.”
So far, the experience of working with Elektroprivreda RS has proven to be a very successful business model for this company.
The author: Impuls