Riinvest Institute 2014

46 European Commission Press Release 2012, “Delivering 
savings for Europe: moving to full e-procurement
for all public purchases by 2016”
47 Ibid.
Premton Hyseni 
PUBLIC PROCUREMENT
Transparency in procured public projects in Kosovo
ARTICLE VI

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19
tion on procedures is easily available to all interested 
parties. Electronic procurement, for example, would 
single-handedly solve much of this problem.
Room for interpretation of the requirements is almost 
always left for procuring officials. For example, the 
law leaves room for the correction of arithmetic errors 
in the contract dossier. This gives the procurement of-
ficials of the contracting authority the power to selec-
tively eliminate companies. The law should specify an 
acceptable margin error within which the companies 
are called upon to make corrections. In other words, 
the loopholes that allows the contracting authority 
officials to interpret the law in a way which serves 
their private interests, should be eliminated. This has 
implication for the transparency of the contracting 
authorities in dealing with each tender in a just and 
equal manner. 
Framework contracts are problematic as they include 
items that possibly will never be requested from the 
framework contract holders. Thus, companies with 
‘inside information’ will quote higher prices on the 
items they know will be in great demand, and low 
prices on those they will know there will hardly be 
any demand. This makes the offer look appealing, 
however, it is damaging to the taxpayer. Transparen-
cy in what the contracting authority will need exactly 
during the framework contract duration, and maybe 
also have some sort of post-examination of the value 
received can help create a balanced playing field for 
all bidders.
FOL Movement monitors the public procurement ac-
tivities in Kosovo and finds that the trend of irregu-
larities and legal violations is continuing
48
. “In a three 
month period the public institutions have made legal 
violations in 29 tenders.” National Democratic Insti-
48 FOL 2013, “Procurement Monitoring, Quarterly Report, 
April-June”
tute (NDI) report
49
finds that the Public Procurement 
Regulatory Commission has not been successful, 
albeit for objective reasons, in its supervisory role in 
many occasions, especially in the case of the Health 
Ministry which has been notable for scandals in deal-
ing with its funds and contracted companies. The 
Health Ministry makes a perfect case study as the 
lack of transparency in selecting suppliers has led to 
low-quality pharmaceutical supplies which are either 
given to the patients and putting them at risk or had 
to be exterminated. 
Kosovo currently falls short in achieving a transparent 
and accountable public procurement system. The 
issues range from information inefficiency to illegit-
imate practices. The use of electronic systems and 
better practices in supervising the use of authority 
can do much to improve the use of our public con-
tributions.
49 National Democractic Institute (NDI) 2013, “Public 
Procurement Monitoring in the Health Ministry”

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20
n
Based on the guidelines of the Organization for Eco-
nomic Co-operation and Development (OECD) on Pub-
lic Enterprises (PEs) (2005) and according to the Trans-
parency Directive of the European Commission (2004), 
public enterprises should create rigid rules and high 
standards for the implementation of transparency.
50
The legal infrastructure (Law on Business Organiza-
tions, the Law on PE and laws that regulate some of 
the sectors where these companies operate) and insti-
tutional infrastructure (establishment of the Monitoring 
Unit of Public Enterprises - MUPE) are largely in place 
but lack of the implementation of legal provisions can 
be witnessed as well as quality oversight of activities by 
shareholders. Although the Law on PEs creates consid-
erable space for the state to act as an effective owner 
of the enterprises; creates conditions for transparency 
in managing these enterprises and equal treatment of 
shareholders and defines, to a large extent the duties 
and responsibilities of the board, this law does not 
address issues relating to the political independence 
of board members and their professionalism. The in-
volvement of civil society representatives (even just as 
observers) in the recruitment and selection process 
50 Corporate Governance 1, Riinvest Institute 2006
of board members still remains just an ambition, al-
though this rather important issue has been addressed 
by credible research institutions in Kosovo
51
and has 
been recommended to the government and assembly.
MUPE operates under the Ministry of Economic Devel-
opment and has legal responsibility to monitor and report 
the performance of PEs with a focus on operational per-
formance, financial performance, corporate governance 
and future prospects. However, even 6 years after its es-
tablishment staff hiring is not completed, notably the an-
alyst position for monitoring and auditing of PEs, only for 
budgetary reasons even though it was arranged in 2008 
by the Ministry of Finance’s decision that the unit should 
have 12 employees.
52
In 2013 this sub-unit managed to 
employ the analyst for policies and public relation. This 
sub-unit is bound by legal definition, among others, to 
coordinate the work with internal and external auditors of 
PEs and review and monitor audit reports in collaboration 
with the Office of the Auditor General (OAG).
MUPE has managed to draft some important docu-
ments towards advancing corporate governance in