Five companies that signed the largest state procurement contracts in 2016 and in the first half of 2017 are mostly linked to high-ranking government officials.
Hetq received the data about those five companies from the Ministry of Finance.
The data reveals that officials use their business connections to win major state procurement competitions.
The Defense Ministry signed five major contracts.
Flash and AMPG win several contracts
Flash and AMPG Group are among the list of companies that have signed major contracts in 2016 and in the first half of 2017.
The owners of these companies are not commonplace people. Flash belongs to Barsegh Beglaryan, a friend of Armenian President Serzh Sargsyan.
Albert Taroyan, Honorary Consul of the Republic of Philippines in Armenia, owns AMPG Group.
Flash signed major contracts and received the largest amounts of money from the state budget in 2016 and 2017 to supply diesel fuel. In two cases, the company signed the contracts with the Ministry of Defense.
Under the contract signed in 2016, the company received 2 billion 342 million drams from the state budget and supplied the Ministry of Defense with gasoline and diesel fuel. Almost half of the contract value has been allocated for Regular diesel.
In the first half of 2017, Flash has signed a contract worth 1.864 billion drams. Under that contract, the company will again supply the Ministry of Defense with the Premium and Regular types of diesel, summer and winter diesel fuel.
This company signed a contract with the State Revenue Committee (SRC) in 2016 and in the first half of 2017 for excise stamps printed on alcoholic drinks and cigarettes.
The AMPG Group's contract was the second largest after Flash in 2016. Last year, under a contract with the SRC, the company printed excise stamps "2017" on polymer membranes for imported and local alcoholic drinks (45 million), cigarettes (259 million) and articles subject to mandatory marking (500 million), in compliance with standards. This contract amounted to 1.891 billion drams.
In 2017, the company won a 1.411 billion AMD contract to print excise stamps "2018" for imported and local alcoholic drinks (37 million) and cigarettes (295 million), in compliance with standards.
The SRC allocated the substantial part of the amount envisaged by the contract for printing cigarette excise stamps.
Other large contracts of 2016
Last year, there were three more companies that signed large-scale contracts with government agencies and received large sums from the state budget.
Gevgrig signed a 979 million AMD contract with the Ministry of Defense to supply aviation fuel. Arsen Harutyunyan, one of the owners of Gevgrig, served as director of the Maxhur company belonging to the former Republic Party of Armenia (RPA) MP Harutyun Pambukyan. Maxhur also deals in diesel fuel sales.
Gevgrig has since filed for bankruptcy.
In 2016, Khachhar signed a contract with the Ministry of Transport, Communication and Information Technologies worth 787 million drams. Under the contract, the company carried out capital repair works along the Yerevan-Sevan-Azerbaijan border – repairing the asphalt-concrete pavement, installing new metal barriers and implementing other construction works. Khachhar also signed the largest contract with the Yerevan Municipality in 2016. The owner of Khachhar is Rouben Baghdasaryan, who is linked to the RPA parliamentarian and owner of Jermouk Group, Ashot Arsenyan.
Avangard LLC signed another contract, worth 585 million AMD, with the Ministry of Defense to supply 1,200,000 kg of melted cheese to the army. This company is registered in Martouni, Artsakh. According to the data of the Artsakh State Register of Legal Entities, the company belongs to Gastello Mkrtchyan, aka Gastik. He is an employee of the Defense Ministry.
Armenia's Transparency International Anti-Corruption Center NGO studied the public procurement contracts signed from November 22, 2015, to January 22, 2016 and found that during that period the Ministry of Defense signed eleven contracts with Avangard.
The company supplied the army with food, construction materials, utility supplies, sanitary and washing materials, electrical, radio and household equipment, ammunition supplies, garments, car spares, laundry and cleaning services.
Companies that signed largest contracts in the first half of 2017 belong to officials
As already mentioned, two out of five companies that signed the largest contracts in the first half of 2017 are Flash and AMPG Group.
In the first half of this year, the second largest contract after Flash was signed with Arpa-Sevan OJSC, that belongs to the RPA parliamentarian Hakob Hakobyan. The company has signed a contract worth 1.873 billion AMD with the Ministry of Energy and Natural Resources to carry out major repair works on dilapidated sections of the Arpa-Sevan N 2 tunnel.
The other large contract during the first half of 2017, worth 960million AMD, was signed between the EIC Telecom Company and the Government Staff. The purpose of the contract was to organize the April 2 election process.
Under the contract, the company was obliged to carry out the video recording of the electoral process in all electoral precincts, to save the videos, and provide copies if needed. In the precincts where internet was available, they were supposed to ensure online broadcasting, introduction and maintenance of video copies. According to the State Register of Legal Entities, Yervand Simonyan is the owner of the company.
The fifth major contract of the first half of 2017 was signed by the Ministry of Defense and the Artsakh Footwear-Sewing Manufacturing Union CJSC. The aim of the $ 847 million contract is to provide footwear to the army.