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Competition Council, “worried” that municipalities are establishing their own companies

de Adrian N Ionescu , 12.11.2017

The establishment of own companies by local administration to manage the services at the local level is worrying for the competition authority, Bogdan Chiritoiu, President of the Competition Council, said Wednesday, quoted by Digi24.

At the beginning of October, cursdeguvernare.ro asked for the opinion of the Competition Council on the companies established by municipalities.

The explanations provided did not cover, though, the anti-competitive tendency of this conglomerate of state-owned companies under private law.

Local authorities may directly award contracts to the companies they control only under certain conditions, and only if they do not find more advantageous offers on the market – was the opinion sent by the Council.

That, I admit, is scaring, okay, we are worried about this approach. Many local authorities want to establish their own companies to manage some of the local services (without tenders – editor’s note). Unfortunately, for Romania, the Directive is very good for Germany, but I am not convinced that it is good for Romania, although it is the same Directive for the 28 member states and it allows that,” said Bogdan Chiritoiu on Wednesday, quoted by Digi24.

The President of the Competition Council pointed out: the Directive “would be good for Western countries with a better discipline of the administration but in Romania, it is worrisome for us.”

Despite the “concerns expressed”, Bogdan Chiritoiu, who is now during the final mandate as President of the Competition Council, does not make also the decisive step: launching an investigation into the way the 22 companies follow the free market rules.

Bogdan Chiritoiu’s statements occur almost four months after the Bucharest Mayor’s Office established the 22nd company, which will deal with the administration, maintenance and sanitation of the cemeteries in the city.

The establishment of the municipality’s companies started in January 2017, with Trustul de Cladiri Metropolitane Bucuresti SA. The other 20 companies were the subject of some General Council meetings in March and April 2017.

At the budget amendment in September, the municipality decided to take money from major projects and direct them to the newly established firms.

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