CNE Fails to Report Alleged Collusion Among Construction Companies Over Contract Pricing
The National Emergency Commission admits to identifying cases of price fixing among bidders for emergency school reconstruction projects but did not file complaints.
The President of the National Emergency Commission (CNE) of Costa Rica, Alejandro Picado, announced on Wednesday that the agency did not file any complaints despite identifying possible instances of collusion among construction companies aimed at inflating contract costs for five schools included in the Comprehensive and Resilient Infrastructure Emergency Reconstruction Program (PROERI).
During a session of the Legislative Assembly's Budget Commission, Pilar Cisneros, head of the ruling Social Democratic Progress Party (PPSD), stated she is aware of situations where bidding companies allegedly conspired to increase project costs, resulting in the non-conclusion of respective tenders.
Cisneros requested specifics from Picado concerning these behaviors.
Picado confirmed, "This has occurred with approximately five large schools; we identified that some companies colluded to set a high price."
Upon inquiry from La Nación after the legislative hearing, Picado acknowledged that no formal complaints were filed and he could not recall the names of the companies involved.
He asserted, “We realized in time what was happening and took the necessary precautions.
We did not file complaints because we do not have the necessary elements.
It is not necessary at this moment, as no contract was awarded to any company.”
The PROERI encompasses a catalog of 502 infrastructure projects, which includes 298 classified as at imminent risk and 204 stemming from emergency decrees.
The funding for this initiative originates from a $700 million loan from the Central American Bank for Economic Integration (CABEI).
Picado was summoned by legislators to provide an update on the current status of the PROERI, which, according to a report from the Comptroller General of the Republic (CGR), had only achieved an advancement of 0.3% regarding projects deemed at immediate risk up until October 31, 2024, consuming 73.8% of the total resources from the CABEI loan.
The CGR determined that only one of the 298 projects had commenced execution in the eight months following the loan’s approval, despite an 18-month deadline set by the CNE's Board of Directors for the completion of the reconstruction works, as established in accord No. 27 on March 9, 2023.
An analysis report from the Legislative Assembly dated February 4 indicates that this deadline began on March 22, 2024, and is set to end on September 22, 2025. However, Picado expressed to the Budget Commission that he could not assure that all projects would be finalized within the self-imposed timeframe.
“It is a six-year project; I cannot guarantee the completion of the works within 18 months,” he informed Congresswoman Paulina Ramírez, chair of the legislative committee.
Ramírez remarked, “You had assured that the projects entering the program had pre-investment and pre-feasibility, yet today we see that they are at those stages.
It was not realistic to claim that they were ready for bidding, which presents an obstacle.”
Assembly member Jonathan Acuña from the Broad Front (FA) inquired whether delays in the PROERI projects were attributed to specific instructions from the Comptroller, to which Picado responded negatively.
He later assured members that five projects have been completed and 19 are currently in progress, stating that 70% of the projects at imminent risk have already been tendered and 82% of the projects linked to emergency decrees have progressed.
Lawmakers also criticized the CNE for failing to provide a complete report to Congress as required under Article 16 of the PROERI approval framework, which mandates semiannual updates for improved oversight of resource usage.
A study conducted by the Budget Analysis department confirmed this.
It noted that the report from CNE's Internal Audit did not address financial execution or progress specifics for projects and lacked necessary details on projects listed as at imminent risk, although it did cover those linked to emergency decrees.
Juan José Monge, Executive Director of the CNE, responded to the criticisms, indicating that while the Internal Audit report, AU-009-2024-INF, was issued by that department, the active administration does not bear responsibility for its content.
He mentioned an intention to request clarification for more detailed information as mandated by law.
Ramírez disputed Monge’s argument, asserting that the law is explicit and all stipulated information should have been complied with.
“You cannot justify that the Audit is responsible, because once the report is made, you should have verified that it met the legal requirements,” she stated.
Acuña concurred, emphasizing that the CNE should rectify the data transmitted to Congress, highlighting that the report should not have reached lawmakers in its incomplete state.
During a session of the Legislative Assembly's Budget Commission, Pilar Cisneros, head of the ruling Social Democratic Progress Party (PPSD), stated she is aware of situations where bidding companies allegedly conspired to increase project costs, resulting in the non-conclusion of respective tenders.
Cisneros requested specifics from Picado concerning these behaviors.
Picado confirmed, "This has occurred with approximately five large schools; we identified that some companies colluded to set a high price."
Upon inquiry from La Nación after the legislative hearing, Picado acknowledged that no formal complaints were filed and he could not recall the names of the companies involved.
He asserted, “We realized in time what was happening and took the necessary precautions.
We did not file complaints because we do not have the necessary elements.
It is not necessary at this moment, as no contract was awarded to any company.”
The PROERI encompasses a catalog of 502 infrastructure projects, which includes 298 classified as at imminent risk and 204 stemming from emergency decrees.
The funding for this initiative originates from a $700 million loan from the Central American Bank for Economic Integration (CABEI).
Picado was summoned by legislators to provide an update on the current status of the PROERI, which, according to a report from the Comptroller General of the Republic (CGR), had only achieved an advancement of 0.3% regarding projects deemed at immediate risk up until October 31, 2024, consuming 73.8% of the total resources from the CABEI loan.
The CGR determined that only one of the 298 projects had commenced execution in the eight months following the loan’s approval, despite an 18-month deadline set by the CNE's Board of Directors for the completion of the reconstruction works, as established in accord No. 27 on March 9, 2023.
An analysis report from the Legislative Assembly dated February 4 indicates that this deadline began on March 22, 2024, and is set to end on September 22, 2025. However, Picado expressed to the Budget Commission that he could not assure that all projects would be finalized within the self-imposed timeframe.
“It is a six-year project; I cannot guarantee the completion of the works within 18 months,” he informed Congresswoman Paulina Ramírez, chair of the legislative committee.
Ramírez remarked, “You had assured that the projects entering the program had pre-investment and pre-feasibility, yet today we see that they are at those stages.
It was not realistic to claim that they were ready for bidding, which presents an obstacle.”
Assembly member Jonathan Acuña from the Broad Front (FA) inquired whether delays in the PROERI projects were attributed to specific instructions from the Comptroller, to which Picado responded negatively.
He later assured members that five projects have been completed and 19 are currently in progress, stating that 70% of the projects at imminent risk have already been tendered and 82% of the projects linked to emergency decrees have progressed.
Lawmakers also criticized the CNE for failing to provide a complete report to Congress as required under Article 16 of the PROERI approval framework, which mandates semiannual updates for improved oversight of resource usage.
A study conducted by the Budget Analysis department confirmed this.
It noted that the report from CNE's Internal Audit did not address financial execution or progress specifics for projects and lacked necessary details on projects listed as at imminent risk, although it did cover those linked to emergency decrees.
Juan José Monge, Executive Director of the CNE, responded to the criticisms, indicating that while the Internal Audit report, AU-009-2024-INF, was issued by that department, the active administration does not bear responsibility for its content.
He mentioned an intention to request clarification for more detailed information as mandated by law.
Ramírez disputed Monge’s argument, asserting that the law is explicit and all stipulated information should have been complied with.
“You cannot justify that the Audit is responsible, because once the report is made, you should have verified that it met the legal requirements,” she stated.
Acuña concurred, emphasizing that the CNE should rectify the data transmitted to Congress, highlighting that the report should not have reached lawmakers in its incomplete state.