On June 29, the arbitration court of the Republic of Sakha (ROS) upheld a January ruling by Russia’s Federal Anti-Monopoly Service (FAS) that the ROS Ministry of Sport and State Customer Service had colluded to illegally restrict competition on two architectural design contract tenders in the regional capital of Yakutsk.
The FAS said the collusion led to the unfair award of the contracts to a large local design firm, Yakutproekt, which has one month to file an appeal.
Yakutsk, the capital of the Republic of Sakha, is 280 miles south of the Arctic Circle and is consistently the coldest city on earth. Sakha, also known as Yakutia, is a vast mineral-and-resource rich territory that is nearly as big as India.
The two contracts were worth more than 89 million rubles (US$ 1.6 million) and were for architectural design work on two major sports facilities, a shooting range and a sports center that includes a hotel.
Both are to be built for the 6th International Children of Asia Games in 2016, an international competition held every four years in Yakutsk which involves over 30 countries. The last such games were held in 2012 under the auspices of the International Olympic Committee, UNESCO and the Olympic Council of Asia.
According to the court judgment, construction costs for the two facilities were estimated by Yakutproekt to be 1.76 billion rubles (US$ 30 million), an estimate quoted by Head of the ROS Yegor Borisov, in a letter to the federal Russian minister of sports, Vitaly Mutko, in March 2014.
Yakutproekt is an open joint stock company that was created by an order of the ROS during privatization in the 1990s.
OCCRP research shows that Ivan S. Androsov, the Chairman of the Board of Directors of Yakutproekt, was on a list of citizens nominating Borisov for re-election as head of the ROS last summer.
As ROS leader, Borisov according to the constitution enjoys the power of being “the head of the executive power of the republic”. Borisov appointed the current minister of sports, Michail Gulyaev, by decree in 2014.
OCCRP also found evidence suggesting links between Yakutproekt and the ROS.
On its website andin company filings, Yakutproekt lists as its official address Ulitsa Ammosova 8, a concrete office block at the main city square in central Yakutsk that is home to several government agencies.
Another office at Ulitsa Ammosova 8 is the official address of the State Customer Service, one of the local authorities found by the court to have illegally restricted competition in favour of Yakutproekt.
© Google Streetview
In November 2014, local news service Sakha News (1sn.ru) had first raised questions about the legitimacy of the tender process for the two contracts.
A survey earlier this year found that 12 percent of Yakutians say they have been forced to bribe officials, and over 50 percent felt a “sense of impunity” among officials was a key reason for corruption.
OCCRP tried to contact the ROS government for comment, but received “email full” notices from all offices contacted. Yakutproekt did not respond to a request for comment.
