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25th Sep 2017

Investigation

Security firm wins EU contract despite tax problem

  • Kabul street: the contract is the largest one in the EU's private security portfolio (Photo: russavia)

British private security firm Page Group has scooped a contract to protect EU diplomats in Afghanistan, but faces delays over local tax compliance.

A Page Group spokesperson confirmed to EUobserver on Thursday (14 March) that "this company's tender for the provision of security services at the EU delegation has been accepted."

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The contract, worth between €30 million and €50 million over the next four years, is to see it provide at least 100 security guards as well as mobile patrol teams and armoured vehicles to protect EU staff, their families and visiting VIPs.

The EU complex in Kabul houses about 75 EU personnel when fully staffed.

The dangers of the job were highlighted in 2011 when a bullet hit the window of the EU ambassador's office, and earlier in 2010, when a rocket exploded 70 metres away from him at a tribal meeting in the Afghan capital.

Page Group beat off rival bids from British-Emirati firm Sabre International, Canada's GardaWorld and French company Geos to get the deal.

It was in a good position because it has already been working for the EU in the war-torn country for several years.

But the award is controversial for financial reasons.

The EU has postponed the publication of its decision in the Official Journal, which gives it legal force, because Page Group is not up to date with tax returns to Afghan authorities.

The British firm said its old contract has instead been extended until 30 June.

In the meantime, it is trying to catch up with paperwork. "The Afghan finance ministry recently changed the dates of its financial year. We are in the process of filing returns to comply with the new tax year," it noted.

A contact in the private security sector told this website that Page Group owes Afghanistan money.

"It's just like Libya. In Libya, G4S had no authorisation to work, but the EEAS [European External Action Service] gave it the contract anyway. Here, Page Group has no authorisation to work because it's not in line with fiscal rules, but the EEAS gave it the contract anyway," the source said.

The EU last year gave British firm G4S a €10 million contract to protect its staff in Libya.

But it was forced to bin the deal when Libyan authorities complained that G4S did not have a permit to operate in the country.

Meanwhile, an EU source told this website that Page Group should have been excluded from the Afghanistan tender due to other discrepancies.

The contact said it overcharged the EU mission to the tune of €1 million in the 2008 to 2009 period by, for instance, claiming fees for guards who were never posted, in an accounting dispute which continues to rumble on behind the scenes.

"This is EU taxpayers' money. The European Commission should have excluded them from bidding for any further work until the matter is fully cleared up," the source noted.

For its part, Page Group denied that there are any problems.

It said the Afghan tax issue is "not relevant" for its eligibility to do EU work. It added that the overpayment allegations are "incorrect."

The EEAS declined to answer any questions for the time being.

"We cannot comment on ongoing procurement procedures. The results will be published in the EU Official Journal in the normal manner," its spokesman, Michael Mann, said.

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