The Government has appointed the Russian Auction House as a state procurement platform

The market believes that the government has exceeded its power.
Inscrutable are the ways of lobbying, as described the governmental decision Nikolay Andreev, director of the state order platform Sberbank-AST  (conveyed through a representative). The government has exceeded the authority, resents the co-owner of ETP MICEX Sergey Gabestro.

On December 31, the government added to the five existing state order platforms the sixth one: Russian Auction House (RAH). But according to the law it can be done only by the selection of the results among the platforms, which never took place, said Gabestro.

The selection was carried out, it is argued by the government, but among the platforms intended not for procurement, but for the state property sales. The decision was taken by the Economic Development Ministry proposal. The order did not violate any procedures, claim a co-owner and CEO of RAH Andrey Stepanenko and a representative of the Economic Development Ministry.

RHD was created by government decree in 2009, when it was headed by Vladimir Putin, reminds Stepanenko. The platform is specialized in privatization. An important role in the success of RAH played one of its owners, Sberbank, according to market participants. Sberbank, of course, supported it, but didn't play a key role, disagrees Stepanenko. Sberbank's representative did not respond to the request.

Who owns RAH

The owners of RAH (SPARK data as of September 30) are: Sberbank (19%), Igor Metelskiy (11%), Andrey Stepanenko (7%) Georgy Biryukov (5%), JSC Russian Jeweler (53.5%, its shareholders are Metekskiu (66.67%) and Stepanenko (33.33%)). In 2013, the RAD auctions ensured 40% of the planned federal budget revenues from privatization; in 2015, 70%; and in the first half of 2016, 90%, according to the company. Transactions on the privatization of federal and regional property amounted to 53.4 billion rubles.

This will be the second state procurement platform for Sberbank. Its subsidiary, Sberbank-AST, is one of the market leaders. The platforms earn on providing applications: they open a bank partner account, and the participants of tenders transfer tender security to it; the money is blocked for the tener period; the platform receives interest income. 70% of security for the state order is placed on Sberbank and VTB accounts (which owns 48% EETP, the platform transfers 100% of the security to an account in VTB). RAH securities will be placed in Sberbank, said Stepanenko. There are no discussions about the unification of the two state bank platforms or about making RAH a single universal platform, says Stepanenko.

Neither the law nor the regulations say anything about the selection and its criteria, so the government list can be considered as selection list, said Deputy Minister of Economic Development, Yevgeny Elin. The issue is not fundamental, the addition of another platform will not worsen the functioning of contract system and maybe improve it by increasing competition between the platform, he said; there will be a full-scale selection at the end of the year anyway. 

The market has been waiting for this for several years. The participants who did not receive access to government contracts, asked to expand the list of favorites from five to 10-12 platform. The government, meanwhile, is discussing the reduction in the list to three platform, or even a single universal one. The idea to go to a universal trading platform, which would be used for state procurement and state property sales, appeared in 2015

Claims for the procedure had to had been submitted in December 2015, when the list of privatization platforms was increased, and five state procurement platforms were attached to RAH, said Stepanenko. Now the government has selected RAH as it is the largest electronic marketplace for sales in Russia, 80% of federal property sales are accounted for that platform, and it does not depend on the region or the bank, he says.

Bidding for government contracts will begin in March, and what customers will participate is uncertain, since negotiations are not conducted, said Stepanenko. He expects that among them will be the Ministry of Defense as a longtime partner (in 2016, RAH sold the Ministry of Defence property worth 4 billion rubles). State-owned subordinates of the Ministry of Defense also make purchases via RAH. 

Placement of the state order is also a service provided to the state, and it would be logical to choose platforms in compliance with one of the legal procedures, says co-founder of the Bureau of contract information, Olga Anchishkina. So far the government itself and the president are the leaders on non-competitive procurement. According to the Ministry of Economic Development, the decision of the president or the government defined 44% of purchases from a single supplier in 2015 amounting to about 504 billion rubles, which is 87.3 billion rubles more than in 2014.