It was announced that Tbilisi City Hall terminated the contracts of both contractor companies involved in the rehabilitation of Tsereteli Avenue – RTD and Millennium Builder Group (which was simultaneously working on rehabilitating two sections of the avenue) on 16 January of this year. The decision was made upon improperly performed work.
It was revealed that the company had improperly completed construction work on three other road projects in addition to Tsereteli Avenue.
RTD Ltd. won the tender (NAT210012014) announced by the Roads Department in July 2021 for the rehabilitation of the km15-km30 section of the Marneuli-Tetritskaro-Tsalka road, a project of national importance. Whilst eight companies participated in the tender, RTD was declared the winner due to disqualification of the other bidders. The contract, worth GEL 8,699,999, was signed in November 2021, initially set to be completed within 16 months. A total of 11 amendments were made to the contract with the completion date extended several times. The final amendment adjusted the deadline to 15 June 2024 (the original deadline being 13 June 2023). The company has been paid GEL 5.7 million (65% of the total value) and whilst the completion period has been violated by 166 days, the contract has not been terminated and is still ongoing. Due to this tender, the company has been blacklisted at the request of the buyer, the Roads Department.
The second tender (NAT220006258), which the company RTD was unable to finish, involved the rehabilitation of km13-km17 and km24-km25 sections of the Khashuri-Akhaltsikhe-Vale (border with Turkey). The contract between the Roads Department and the company was signed on 30 May 2022 at a value of GEL 9,699,999 and the works were initially scheduled to be completed within eight months from the issuance of the written assignment. The contract now included ten corrections and 13 amendments, extending the planned work schedule and the completion deadline. The initial completion date (May 2023) was changed multiple times with the deadline being extended to 15 June 2024 with the 13th amendment. The contract is still ongoing as of today although it is 166 days past its original expiration. The company has been paid GEL 6,660,669, accounting for 69% of the total contract value. The Roads Department also requested that the company be blacklisted due to these delays.
The third road construction project, also carried out by the company RTD, involved the rehabilitation of the national importance section Didi Dmanisi-Dmanisi-Gomareti-Nediani km1-km15. The tender of this project (NAT220024810) was issued on 25 November whilst the contract worth GEL 14,699,999 was signed with the company on 22 February 2023. A total of three amendments were made to the contract, extending the deadline for completing the work to 31 July 2024. The contract term has been exceeded by 122 days as of 28 November. A total of GEL 2,372,357 has been paid to the company as of now, accounting for 16% of the total contract value. The company was blacklisted for this project as well due to improper performance.
Notably, RTD does not agree with the three aforementioned decisions requesting to blacklist the company and has appealed to the Court regarding this matter, according to the decrees.
The company RTD is also currently involved in another ongoing project, namely the rehabilitation of km9-km20 section of the Igoeti-Kaspi-Akhalkalaki highway. The tender for this project (NAT230022389) was announced on 9 November 2023 whilst the proposal submissions began on 10 December and ended on 15 December with an estimated value of GEL 16,772,758. Three bidders participated in the tender: Tsekuri Ltd., Road Construction Department #1 Ltd. and RTD Ltd. A contract worth GEL 14,899,999 was signed with RTD on 18 January 2024 with a completion period of one year. However, an adjustment was made to the contract on 24 January, reporting it was a correction of an error. Additionally, two more amendments were made: the first extended the contract’s term until 1 July 2025 and the second adjusted the work plan and schedule.
Whilst there would be nothing unusual about the aforementioned agreement, an important circumstance arises – Tbilisi Mayor Kakha Kaladze terminated the agreement with RTD Ltd. on 16 January 2024, citing the inadequate quality and delays in the rehabilitation of Tsereteli Avenue. It was evident even before the termination that the company was not fulfilling its obligations properly. Despite this, the Roads Department signed a GEL 15 million agreement with RTD just two days later, on 18 January 2024 – the company that had been ‘disapproved’ by the Tbilisi City Hall
It is also important to note that RTD Ltd. was founded in 2013 according to the Register of Entrepreneurs and Non-Entrepreneurial (Non-Commercial) Legal Entities. The current owner and director of the company is Lukhum Kartlosishvili whilst the founder is Lasha Kartlosishvili, a member of the Gardabani Municipality Council from the Georgian Dream. The company has been participating in state procurement since September 2015.
RTD won its first tender after Lukhum Kartlosishvili became the owner. Kartlosishvili donated GEL 25,000 to the Georgian Dream within a month of signing the first contract.
One of the grounds for registration in the blacklist is when the supplier fails to fulfill or improperly fulfils the obligations under a contract according to rules and conditions of the blacklist. Furthermore, the contract term must have expired or the contract must have been terminated earlier than the expiration date. A bidder/supplier registered on the blacklist is prohibited from participating in state procurements or signing agreements for one year after being blacklisted.
As it turned out, RTD Ltd. was registered on the blacklist four times due to improperly performed work – once for the rehabilitation of Tsereteli Avenue and three additional times for the projects discussed in this article.
Discussion about this post