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Economics&Finance 2017
Gold Counters of Azersu

Gold Counters of Azersu

2017 January 10 ( Tuesday )  12:13:24
 Azərbaycan

By the very end of 2016, on December 30 in the First Baku Administrative-Economic Court Azersu JSC finally gave an answer to the information request from Turan Information Agency of 30 August 2016 on the implementation of water distribution by order of President of the Republic of 29 March 2016 on the allocation of 12 million manat for the installation of water meters to the population.

The answer signed by the deputy chairman of JSC Azersu Mr. Seymour Seyidov on December 29 was not complete. The answer was given to three of the seven questions posed in the information request. So we were not given answers to the following questions: 1) the conditions of the tender, 2) the price, the delivery time and the number of counters provided by the winner of the tender, 3) the number, types and prices of meters purchased before March 29, 2016, 4) the installation price of one meter and the indexes forming the cost.

Interestingly, the letter notes that the tender announcements were published in the newspaper Respublika and on the website Azersu on April 5, 2016. However, the reference to the tender on the website proved to be inactive. And in the News section there is no mention of the announcement of the tender or its results.

But the agency managed to find out (http://interfax.az/view/669357) that the tender was announced for the purchase and installation of 50,000 smart meters. Sampling was carried out through open tender and held for 5 lots, including the supply of meters to be installed in residential buildings: Surakhani, Khazar and Pirallahi districts of Baku (9 thousand units, Lot 1), Nizami and Khatai districts of Baku (9 thousand units, Lot 2), Sabunchu district of Baku and the suburban area Baglar (9 thousand units, Lot 3), Absheron region of Azerbaijan, Sumgait and Garadagh district of Baku (9 thousand units, Lot 4), Nasimi, Narimanov, Binagadi, Yasamal and Sabail districts of Baku (14 thousand units, Lot 5).

The meters had to be supplied before 31 December 2016.

In the letter Seyidov stated that the winners were declared on five lots: Inshaat LLC, Asil Inshaatchi-R LLC, Anv-Inshaatchi LLC, Inshaatchi Neftchi LLC, and Hydro Inshaat Service LLC.

Internet search returned no results for Anv-Inshaatchi LLC. Companies with the name Inshaat LLC proved to be 9. Two companies are registered in Shirvan. One of the companies, according to Radio Azadliq, is led by a relative of the President of Azersu. Why the acquisition of counters involved not the manufacturers of the devices, but these non-core organizations, is a question to Azersu.

The order through these local companies is given to the Ganja instrument-making factory. Azersu says the mechanical meters will be purchased at the price of 30 manat including VAT per unit, while smart meters will be 110 manat excluding VAT for a piece. However, the tender information said nothing about mechanical counters. Given the fact that the tender was for the supply of 50,000 smart meters at the price of 110 manat each, it turns out that the total disbursed amount of the tender was 5.5 million manat. And what then happened to the remaining 6.5 million manat?

It is noteworthy that the world's manufacturers of meters were not invited to the tender.

The study of the offers of Russian, Chinese and Western manufacturers by Turan IA showed that the counters purchased by Azersu were clearly overpriced. https://russian.alibaba.com/g/smart-water-meter.html

http://www.pulscen.ru/price/080701-schetchiki-vodyhttp://www.kipexpert.ru/component/content/article/303.html

For example, Russian mechanical counters are $7 per piece, Western ones are twice as expensive, and Chinese meters cost just a couple of dollars, but they are made with brass and bronze and have appropriate quality certificates.

Chinese smart meters are available for as low as $8 and up with a quality guarantee. This is the price per piece. At wholesale large orders the price is markedly reduced. Western devices are twice as expensive, but not $ 65 (110 manat), the purchase price of Azersu. As noted above, Azersu declined to answer the question at what price it bought counters before the March presidential decree. According to Turan, they were bought at the price of 200 manat (256 dollars) per unit, that is, as if made from gold.

At the time of announcement of the winners of the tender on May 17, 2016 the dollar exchange rate was $1 = AZN 1.6. That is the total of 12 million manat allocated by the President in dollar terms amounted to USD 7.5 million. This amount could purchase 1 million Chinese smart meters. For complete coverage of all subscribers with smart meters about 0.5 million meters are required. Given the Azersu rates, it will take another few years to completely provide all subscribers with counters and to ‘disburse’ multi-million dollar budget tools. Today, 35% of the subscribers pay for their water on the old regulations, and this creates conditions for serious abuses both by the consumers and the water supplier.

In 2006 President Ilham Aliyev ordered to set all counters in two years. But this requirement was evidently not met, despite the existence of the state program for the installation of meters. It is interesting that the President himself as if forgot about his own decision and the state program, and allocating new uncontrolled amounts, created conditions for further abuse. His last year order for the purchase of meters amounting to 12 million manat and its execution point to serious problems with accountability, transparency and execution of the order.—0--

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