Israel Electric Corporation (IEC) overpaid CPM Building Management Ltd. more than NIS 1 million to manage the construction of IEC's new headquarters in Haifa, according to a review by the Office of the State Comptroller.
More than 2,000 IEC employees work in the 34-storey building. In 2004, IEC replaced the project manager with CPM, one of Israel's largest building management companies. CPM is run by managing director Amikam Oren, who was appointed CEO of Azorim Investment, Development and Construction Ltd. (TASE: AZRM) a year ago, but fired a few months later.
The basis of IEC's contract with CPM was "the Ministry of Defense rate". The State Comptroller found that IEC did not bother to verify this rate, but relied on numbers provided by CPM, which resulted in IEC overpaying for CPM's services.
According to sources at the company, the State Comptroller also honed in on the fact that CPM was chosen without a tender, and without IEC seeking competing bids.
Published by Globes [online], Israel business news - www.globes-online.com - on February 19, 2008
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