In 2004, the company Transportadora Gas del Sur bought 30 and 36-inch pipes from Siat Tenaris to expand the gas distribution network. But according to a report by the National Audit Office (AGN, for its acronym in Spanish), it is not possible to determine exactly how much or how long they had the acquired merchandise.
The operation is part of the infrastructure expansion works planned for 2004 and 2005, and was processed through file 9188 of the National Gas Regulatory Entity (ENARGAS, for its acronym in Spanish).
There the AGN found a "great amount of inconsistencies due to dissimilar information and absence or repetition of documentation."
The paper notes that "there is no certainty as to the amount for which this procurement was made", and adds that between pages 320 and 324 of a procurement management audit report, dated December 27th 2004, mention is made of sum of $113,227,700 dollars while another document, a legal report added on January 6th 2005, says at pages 330 and 331 that the "estimated amount" was $108 million dollars. Nevertheless, the AGN adds that "although ENARGAS authorizes the contracting of the first amount, in the audit report issued on the fulfillment of the purchase orders issued, the sum of the same amounts to $116,573.134 dollars."
The lack of coincidence does not end there. According to the control body: "From the file it appears that the aggregate purchase orders do not coincide with those mentioned in said report (of the audit) neither in the quantity, nor in the number, nor in the partial amount nor total, which is of $39,161,060 dollars."

The AGN also noted that "on September 20th 2004, payment orders were issued for $10,968,636 dollars without which ENARGAS had previously authorized the contract," which was granted only on January 5th of the following year.
But doubts are not limited to the money of the operation. According to the Audit, "the pipe length to be acquired by contracting" Tenaris cannot be conclusively determined. It is that, while in the Pliego it says 290 kilometers, there are papers of the ENARGAS that refer other lengths. For example, on page 122 of a note dated 7 September 2004, it is 234.65 kilometers; another note, in this almost undated, accuses 265.65 kilometers; and in that audit report that speaks of US $ 113.2 million, the purchase order is authorized "up to 270 kilometers."
Among other irregularities in the operation, AGN notes that, on the one hand, the file gives rise to a "contract assignment" from Tenaris to the company Constructora Obedrecht "in which ENARGAS was not a party", and could not even be verified if Asked for authorization and, on the other, that "the offers made by the different suppliers that quoted are not added to the respective file."
In this regard, and beyond the operation of the manager of Transportadora Gas del Sur, the Audit stated that "ENARGAS did not apply a market price monitoring system, nor did it develop an alternative method to evaluate the bids presented, nor even in cases where there was a single offer, because it was a direct award." Based on this finding, the technicians understood that the regulator showed a "lack of control of the values offered and their reasonableness."
Lack of Formalities
One of the tasks of ENARGAS is to create procurement management audits. The AGN found that the information filed in these files "is often added without a chronological order and, in most cases, the amount of the purchase orders cannot be reconciled with the sum of the aggregated invoices."
In addition, as a regulator, it carries out technical and legal reports and accounting audits, in which "the absence of minimum formal requirements proving controls has been verified," said the Audit, adding that the reports "are not numbered, neither are they made out in letterheads or have clearings "that identify them with the ENARGAS. In fact, the technicians added that these shortcomings "do not allow them to know which official or which area issued the relevant reports."
There is also a lack of documentation necessary for ENARGAS to control the gas operations. For example, the AGN found files that did not contain the Bidding Terms and Conditions or the suppliers' offers.
And the audits carried out by the regulator include observations that, according to the Audit, "lack the formalities". This is the case of reports that contain notes in manuscript, "sometimes written in pencil, errors in purchase orders and absence of supporting documentation and handwritten corrections - from dollars to pesos - that are not saved," the paper concluded.