Group head takes on ministry with complaints of foul play, although any change of heart seems unlikely (557 words)

Published: 9/13/2001

After grudgingly welcoming the government's new aircraft leasing structure proposal, the Leader Group is now trying to alter the result of the tender, which left it with interest subsidies, but without government guarantees. The Ministry of Economics and Trade Development responsible for the tender, is reported to have already rejected Leader's complaints and said it will not change the reported outcome. Leader's move is seen as being somewhat belated. At the time of the announcement of the winners, there were no complaints from any of the participants, although Leader expressed some disappointment with the points it was awarded as part of the evaluation process. According to reports, Igor Leiko, President of Leader, has now written a letter outlining the group's concerns about the fairness of the process to German Gref, the minister with overall responsibility and his deputy, Ivan Materov, who ran the tender committee. In his letter, Leiko is reported to contend that there were several inaccurate presentations of the economics of the investment schemes proposed by the bidders. He claims that this was particularly evident in the assessment of the socio-economic impact of the proposals. Leader, with two other bidders, received an equal number of points, but Leiko considers that its proposal was 3-5 times more effective than those of the other participants. He therefore believes that Leader should have been awarded 20-30% more points than its rivals. Leiko also argues that Leader had asked for interest subsidies of only $10.6m for a programme of potentially 80 aircraft, so making the least call on the state's resources; the key criterion to win the tender. He points out that the state, by awarding the tender to Ilyushin Finance and FLK, will have to pay $80m and $52.5m respectively for the government's 51% interest in the companies. Given this outcome, Leiko claims that it was obvious that this level of financing meant that the criterion was not applied. However, Leader's lack of an immediate government stake in the new ventures was also reported as going against the leasing group. Leiko concedes that, given the closeness of the three schemes, a fair decision would have been to award the tender to three, rather than two, bidders. The Ministry of Economics confirmed that it had received the letter from Leiko, to which it had replied stating there were no inaccuracies in the evaluation process and that the decision would stand. The position of the ministry, reiterated by Ivan Materov at the announcement of the tender result, was to give preference to bidders presenting firm orders as opposed to expressions of interest. Reportedly, Leiko does not expect that the Ministry will change its decision, but he is looking for more liberal treatment over the issue of government financing. As a last resort, however, he says he will take his claim to the courts, arguing that the tender was fixed and Ilyushin Finance, which reduced its capital requirements from $172m to $80m during the tender, was in violation of the terms. Ilyushin, for its part, claims that this was in response to the committee's decision not to include the Transaero demand for Tu-204s in any structures covered by the tender, so that the funding requirement was reduced accordingly.

Article ID: 2756