Representatives of the construction company indicate that the company is currently facing financial difficulties in meeting its obligations to subcontractors. In order for “Velve” to be able to continue its business and to defend its and subcontractors’ interests and legal rights, on May 7, at the Riga City Court, at the request of “Velve”, a decision was made to initiate a TAP case.
As the company explains, the purpose of TAP in this particular case is to protect the construction company from immediate creditors’ full recourse against the company, promoting the return of a viable company to the economic cycle. In the process of legal protection, “Velve” will have the opportunity to complete the existing objects, as well as to solve the issues of mutual settlements with PSKUS, in order to ensure as much as possible the legal rights of its own and the subcontractors involved in the PSKUS object to payment for the completed works.
It has already been reported that PSKUS could file a claim against “Velve” at the end of May for recovery of damages caused to it, according to the information report of the Ministry of Health (MoH) on the development of the A2 and B building projects of the hospital.
After the unilateral termination of the contract on February 13, PSKUS has identified the subcontractors of “Velve”, with the aim of finding out the amount of unpaid services and/or materials of “Velve”. Based on the opinion expressed by the Procurement Supervision Bureau (IUB) and the Central Finance and Contracts Agency (CFLA), PSKUS has no legal reason and legal basis to make direct payments with “Velve” subcontractors. Despite this, the Ministry of Health (MoH) and PSKUS are looking for possible solutions to settle the outstanding debts of “Velve”.
Currently, from February to June or July, PSKUS carries out urgent works within the limits of its resources, providing permanent building security, video surveillance, installation of a fence delimiting the construction site, maintenance of the microclimate, arrangement of the construction site, installation of lighting and technical security systems, regular inspection of the object, microclimate control in the basement and other emergency jobs.
It is planned to carry out urgent construction works from mid-summer to the end of the year. in order to prevent the risk of irreversible damage to the building until a new construction contractor is selected in the procurement procedure. The report states that until PSKUS concludes a new construction works contract, a negotiation procedure will be held to conclude a contract for the urgent execution of construction works that would ensure that the condition of the building does not deteriorate.
The scope of urgent construction works includes such items as the construction of external enclosing structures, between them, roof, parapets, construction of windows and bays and completion of facade works, construction of the internal rainwater drainage system, construction of a temporary heating and ventilation system to ensure the microclimate of the building, construction of emergency lighting, security construction of fencing, construction of a temporary security system, dismantling of the basement, improvement works of the territory, including the construction of a ramp, construction of evacuation bridges, as well as elimination of mold in the basement. With the aim of defining all the types and volumes of urgent works, PSKUS has concluded a contract for the construction expertise of the A2 building. The full scope of the work to be performed will be identified at the end of the second quarter of 2024.
On the other hand, from the end of 2024 to the end of 2026, it is planned to ensure the construction of the remaining amount of construction works until the building is put into operation, attracting a new general contractor. The expected duration of the procurement procedure, including the conclusion of the contract, could be until the end of 2024, the start of construction works – until the first quarter of 2025, and the planned completion date of construction works until the end of 2026.
For the A2 project, additional ineligible costs in the amount of 687,254 euros were planned for the provision of project management and construction supervision, which will be covered from the PSKUS budget, thus increasing the total costs of the large project to 157,425,265 euros and clarifying the financing framework of the EU funds for the 2021-2027 planning period to 67,891,730 euros.
The report emphasizes that the delay in the completion of the A2 building significantly affects the placement of its planned functions and the availability of facilities suitable for patient health care, as well as affects the possibilities of increasing the number of treated patients, the implementation possibilities of the B building project, taking into account the impact on the amount of available funding and its construction in accordance with the PSKUS infrastructure development plan.
Likewise, the delay in the completion of the A2 building affects the time of useful and safe use of the building of the hospital’s 32nd building, which is planned only until 2027, when it is planned to be demolished, with structural units partially transferred to the newly built A2 building and building 15, thus freeing the construction area for the construction of the B building . It also affects the implementation of the renovation and reconstruction of the 24th, 25th and partly 15th buildings of the project financed by the Rehabilitation Fund, taking into account the fact that the project plans to move the functions in the buildings to the A2 building.
The project of the A2 building includes the function of emergency medical assistance and the relocation of the Emergency Medical Center. Currently, emergency assistance is provided in conditions of limited infrastructure. In order to reduce the risks associated with the provision of high-quality and affordable emergency care, it is necessary to evaluate the current flow of hospitalizations at PSKUS, the Ministry of Health says.
The Ministry draws attention to the fact that as a result of the construction of the A2 building, the construction of the B building is significantly endangered. For the implementation of its development project, EU funding in the amount of 151,185,240 euros was originally planned for the 2021 – 2027 planning period. Taking into account the fact that 67,891,730 euros from the funding marked B in the 2021 – 2027 planning period were previously allocated to the implementation of the A2 project, currently 83,293,509 euros remain for the implementation of the B building development project, the amount of additional funding required is 173,835,713 euro.
The Ministry of the Interior states that it is necessary to find a solution for attracting the necessary funding for the development of hospital B building in order to create a modern hospital infrastructure that meets the needs of patients and employees. Currently, only a part of the B building can be implemented within the mentioned funding. It is proposed to first implement the creation of the Logistics and Service Center of the B building complex, which is necessary for the coordinated integrated service functionality provision of the entire hospital, which is also urgently needed due to the failure to start the functionality of the A2 complex on time.
In addition, it is planned to start separate preparatory works for the implementation of the B building project, successively after attracting the missing funding, the remaining volume of B building and its addition to the already built Logistics and Service Center will be implemented. The Ministry of Health explains that since it is impossible to implement the treatment function of building B in a high-quality manner without joint logistics and service support, this approach provides an opportunity to advance the development of the complex of building B even without the availability of full-scale financing, at the same time ensuring the implementation of the preliminary works necessary for the building’s functionality, without hindering the common infrastructure development plans until the necessary funding is attracted.
Taking into account the circumstances related to the delay in the construction of A2, the MoI estimates that the new reception of A2 could start functioning fully only in 2027, thus the risk of not completing the construction of the B body is clearly marked. within the deadline. Consecutive full development and functionality of the B building can be planned outside of the investments of the EU funds of the 2021 – 2027 planning period.
It is expected that the Ministry of Interior and PSKUS, after receiving the tenders for the procurement of construction works of A2 and before concluding the contract, will report to the government the solutions regarding the possibilities of the future implementation of B.
The second phase building of Building A will house the Emergency Medical Center reception, operating rooms, surgical and neurosurgical profiles, neurology department and stroke unit, maxillofacial surgery, as well as intensive care and the Woman and Child Clinic together with the maternity unit. Mostly double and separate single wards are planned for patients to limit the spread of infections.
Building B, on the other hand, is intended to house the Outpatient Center, Diagnostic Department, Emergency Medicine Center, Cardiology Unit, Cardiac Surgery Center, Thoracic Surgery, Vascular Surgery, Operation Unit, Hybrid Operating Room, Cardioresuscitation, Pharmacy, Patient Kitchen, Cell Transplantation Laboratory, Workshops, Support Rooms .
In 2022, the construction company “Velve” worked with a turnover of 69.152 million euros, which is 0.6% more than a year earlier, while the company suffered losses in the amount of 3.181 million euros, as opposed to a profit a year earlier.
The company “Velve” was registered in 1992, and the capital of the company is 1.423 million euros. The sole owner of the company is the AS “MN Holding” company, but the real beneficiary is Yekaterina Nikulina.
