Stolen by hard work

Extract from the speech addressed by General Prosecutor Askhat DAULBAYEV at the meeting with the core group of Atyrau Oblast on August 31:

“The general audit received a broad public response, but due to shortage of information it gathered from rumors heating the situation. As the General Prosecutor, I want to clear up the circumstances being backed by the audit results. In early August the President received a complaint from the former deputy akim of Atyrau Oblast Salimzhan NAKPAYEV, who is now convicted for arbitrariness, about his illegal conviction and violations in the work of the Atyrau Oblast state bodies during the use of budget money and government procurement procedures. No complaints, especially those referring to illegal use of budget money, are left without the President’s attention – he gave a personal instruction to Prosecutor General and the head of financial police to non-prejudicially figure out the situation and report the results to the people and himself. Therefore, I and the head of financial police formed a special group to conduct checking in Atyrau.

During the audit the facts shown in the complaint proved real, moreover, many other violations were revealed. Due to time shortage, I will briefly tell you about some of them only:         

I would start with government procurement. The analysis of the procurement reports showed that the largest construction tenders concerning housing, waterlines, gas pipelines, motor roads, clinics, schools, kindergartens, as well as design estimates, were all won by one group of companies over the course of the last five years. I would mention some of them – SnabOilStroy LLP won tenders to get over 20bn tenge, AtyrauInzhDorStroy – 20bn, ATG Kurylys LLP – 19bn, AtyrauTransGaz Ltd – 16, TsentrStroy Ltd – 10bn, Asia-Market C – 8bn, NarynEnergoGaz – 8bn tenge. Over the last five years this group of companies was granted construction tenders together amounting over 120bn tenge. Despite such a tremendous sum of state funding, in fact competitive environment was not provided – usually only two potential vendors took part in a tender – one of them being an apparent winner, and the second one a paper company, affiliated to the first one. Its only role was to create an illusion of competitiveness. Results of these tenders, unlike in other oblasts, were almost never appealed. Normally, in other oblasts, in case an unfair decision is made the lost side always appeals to state agencies and the court. But in Atyrau, not a single complaint was lodged for some time past.

The further checking revealed that the bulk of the winner companies was affiliated to certain business people and government officials. One of the latest tenders is an example – the tender for construction of a highroad of oblast importance costing 2.7bn tenge was won by AtyrauInzhStroy LLP, affiliated to a businessman who is famous in the region. I will not say a single name so far, due to presumption of innocence. Not a single design estimate approved by state expert review was in place. As usual, there was a second ‘potential contractor’ – MunayKurylysService LLP, which is also related to the same businessman. The audit has proven the bid applications of both companies noncompliant to the requirements. Moreover, the greater part of works had been completed as of the moment of tender, and the tender itself was conducted in order to receive budget money – it means everybody knew who would win the contract.

It was also determined that design estimates of tender participants (80%) were developed by AtyrauStroyProekt LLP, founded by the businessman’s spouse. As the result, they prepared design estimates on their own, drew fantastic sums for themselves and took part in these tenders to win the money.      

We also discovered the fact of illegal privatization of gas infrastructure that feeds six districts, for the price fifteen times lower than its actual cost. Fifteen times! Despite the annual profit of OblTransGaz (a state owned gas supply company) nearly equaling 150mln tenge, on 5 July 2011, the oblast Akimat decided to put the gas pipeline out to an investment tender, which was held with gross violations of the law. As the result, the gas pipelines in Atyrau city and the districts of Inder, Makhambet, Makat, Kurmangazy, Issatai and Zhylyoi, that previously were on the books of OblTransGaz, were sold to ZhaikGazSbyt LLP for just 650mln tenge, given that its construction and restoration cost budget 9.8bn tenge. The tender was participated by ZhaikGazSbyt LLP and a company affiliated to the same businessman. So far I am mentioning only one businessman.

We revealed the illegal selling of a state property by the Akimat in 2011 - it is the annex building of the Oblast Akimat. You are all well aware that I am talking about the restaurant and its production facilities. It has been sold to KaspiStroy LLP, whose ultimate owner is again the same businessman. A 1,777 square meter building located in the very center of Atyrau and built in 2003 with a balance value of 159mln and market value of 164mln tenge, has been privatized for only 17mln tenge. It was sold for the sum that is tenfold less than its legal price along with gross violations of the law. In relation to this a criminal case has been launched and investigation is in progress.

I underline, we are not mentioning a single official, we just revealed the fact, ascertained it and we are investigating into it. The same year was illegally privatized the written-off 125km Guryev-Makat waterline of a balance value of 373mln tenge – it was sold to MunayKurylymService Ltd for just 4.9mln tenge. Again the buyer was the same founder related to the same businessman.

A company, related to this businessman, committed the same violations by buying the building and equipment of State Enterprise Atyrau Akparat at an understated price, you well know this building. Its balance value is 707mln tenge, but it was sold for 231mln – three times cheaper. As the result, a state company that previously used to accommodate these venues for free, had to rent the rooms and the equipment. In just a year, the state company Atyrau Akparat paid these private property holders 120mln tenge. They sold it for 231 and paid 120mln for rent! In similar way was privatized the analytical environmental laboratory whose balance value made 270mln tenge, but was sold for just 120mln. I underline, the matter concerns an environmental protection facility – country needs it, people need it! 

These are only a part of violations. They have been checked. There are plenty of ongoing audits as well as violations revealed.

Currently, there are materials concerning 189 applicants to the government procurement tenders on construction and 11 facts of state property alienation, submitted to financial police for further audit and making legal procedural decisions.

On April 2, 2012 Atyrau City Court #2 had sentenced Salimzhan Nakpayev to a four year imprisonment as per Article 327 Part 3. Based on his complaint General Prosecution thoroughly studied his case and revealed a number of gross violations there, therefore I have referred a protest to the Superior Court. I think the court will issue a fair and legal decision on this case.   

Dear participants of the conference and the people of Atyrau Oblast!

In conclusion, I would like to say that our audit is not aimed against certain people – we want to objectively figure out the current situation and in case of finding violations of the law to take measures to eliminate them within the legal boundaries, compensate damage and bring the guilty to the account. If investigation proves government officials guilty in dissipation and stealing of state property they will be punished to the full effect of the law. As the General Prosecutor, I guarantee that all criminal proceedings launched by financial police in relation to these cases, will be taken under my special supervision. In case they are referred to the court, the prosecution will take all required measures to ensure a legal, transparent and open consideration, so that every fellow citizen is able to see a true picture of these cases.

Currently, we are facing attempts to influence the prosecution’s audit, including manipulation of public opinion. I already said that no person was mentioned neither by prosecution nor financial police. So far no official or entrepreneur received an accusation, nobody is apprehended nor arrested. We do not understand the current response. Why they want to affect the prosecution’s audit and investigation given that nobody is accused or wanted? Due to this I would like to address to the public of the region that any attempts to pressure on prosecutors and investigators, or any other actions aimed to influence the audit and investigation will be considered criminally liable and stopped.

When these facts were revealed, the oblast prosecutor, an honest officer, was proven not involved in abuse, but in this situation he demonstrated heartlessness and faint-heartedness. We ascertain the lack of appropriate prosecution’s supervision from the side of prosecutor’s office and other law enforcement bodies. Today he resigned and I accepted his resignation and appointed a new prosecutor of the oblast upon the approval of the President.”

After the conference we managed to ask couple of questions to the RoK General Prosecutor Askhat Daulbayev:

- Will you comment on the situation around the akim’s resignation?

- I can’t.

- Where is he now?

- I don’t know.

- Can we say he is temporarily detained?

- No, you can’t.

- Why the prosecution initially denied and stated it was not conducting any audits in the Atyrau Oblast Akimat?

- You know, General Prosecution is represented by our only representative. He never stated that.

- Can we say you have been put heavy pressure on in the recent days?

- Nobody pressurized us. We just warned so that nobody puts pressure on us in further.

By Saule TASBULATOVA and Ainur SAPAROVA