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Russia’s Culture Ministry corruption scandal may affect BaltStroy - report

11:32 05/04/2016

MOSCOW, April 5 (RAPSI) – The corruption case involving among others Russia’s Culture Deputy Minister Grigory Pirumov may result in a review of lucrative restoration contracts signed with BaltStroy company, Kommersant newspaper reported on Monday.

The contracts at initial stages of execution are considered to be reconsidered, as evidenced by a freeze of restoration of Koporye Fortress in the suburbs of St. Petersburg amounting to 100 million rubles (about $1.5 million), what Ministry’s experts say is an overestimate.  

Some of the tenders won by BaltStroy, a part of Petersburg-based Forum Holding, may be reconsidered and annuled, Kommersant reported, citing some undisclosed sources close to the Culture Ministry.

Forum Holding is owned by Dmitry Michalchenko, a billionaire arrested on March 29 on charges of alcohol trafficking.

In the meantime, investigators claim that about 186 million rubles earmarked for the restoration of Izborsk Fortress carried out by BaltStroy were embezzled. 

“Obviously, this contract is already closed; however, at this time auditors are working at the Culture Ministry, therefore, the tenders BaltStroy has won relatively recently may well be reviewed,” – a source close to the Ministry says. According to this source the contracts yet to be carried out or at initial stages of execution may be affected first. The state procurement database show that at the moment BaltStroy has about 10 such contracts ranging from 14 mln to 110 mln rubles. 

The Culture Ministry’s press service has said that the internal audit announced by Minister Vladimir Medinsky is underway since March 18; however, as yet auditors have no evidence justifying pull-out of contracts made with BaltStroy. Nevertheless, the Ministry is putting on hold some tenders, where contractors have not been determined yet. For instance, on March 28 it had to cancel a contest for development of Koporye Fortress restoration project under pressure of 11 experts, who had signed a letter to this effect. After a consultation with the protesting experts the internal Ministry’s commission concluded that this project amounting to almost 100 mln rubles of federal budget money was overestimated by at least 50 mln rubles. 

Atecks, a company founded by the Federal Guards Service (FSO) and BaltStroy are currently two largest players on the Russian restoration and construction market. According to Goszatraty [State Expenditures] database on state procurement, since 2012 the Culture Ministry has made more than 230 contracts with Atecks amounting to 70 bln rubles and 160 contracts with BaltStroy totaling to 58 bln rubles. 

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Russia’s Culture Ministry corruption scandal may affect BaltStroy - report

11:32 05/04/2016 The corruption case involving among others Russia’s Culture Deputy Minister Grigoriy Pirumov may result in a review of lucrative restoration contracts signed with Baltstroy company, Kommersant newspaper reported on Monday.
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