Public procurement integrity and governance in the energy sector in Southeast Europe

Abstract

Public procurement processes are prone to some form of corruptive activities. The most common form of irregularity recorded in Southeast Europe (SEE) countries is preferential treatment of companies due to political connections of their owners. For instance, in Croatia, around half of the total contract value is won by bidders which are not private entities, but companies partially or fully owned by the state, which makes it typical breeding ground for certain abuses. For this reason, transparent governance of state-owned enterprises is extremely important, especially of those in the energy sector, as they are faced with numerous challenges, particularly with regard to governance deficits in public procurement. Resolving these challenges would contribute to a better socio-political environment which would prevent irresponsible financial management of state-owned enterprises and the implementation of inefficient or damaging investment decisions.