According to a report by the Auditor General of the City of Buenos Aires (AGCBA, for its acronym in Spanish), the Buenos Aires government took 81 months to authorize the Zoo’s continuation of the grant, although for years the company Zoo-Botanic 2000 failed to meet a number of commitments assumed from the beginning of the operation in 1991.

The paper recalls that in 1997 the City Administration created the Verification Commission of the State of Occupation of Real Public Domain (CVEOBDP, for its acronym in Spanish). Due to this new office, companies must submit documentation related to their respective holdings. "The breach of duty would entail the automatic termination of the concession and the immediate administrative unemployment of the goods," says the AGCBA. Although the Commission was dissolved in 2001, its functions-and attributions- were transferred to the Department of Concessions and Privatization (DGCyP, for its acronym in Spanish).

But, beyond the flaws detected in wildlife care and facilities, the Zoo didn’t even fulfill the obligations it had before the CVEOBDP. The Audit lists, among other roles that "no bids were presented and that not every document was authenticated by a Public Notary." The report says the company introduced “off the record” affidavits swearing and conducting inventories, but "without the annexes to realize inventory of the library, birds, reptiles, mammals, and other movable property, useful goods and materials belonging to the Zoo." However, no one claimed that documentation.

"Finally, the process with the CVEOBDP first and then the DGCyP later, culminated with the continued operation, took six years and seven months from the filing of Zoo-Botanic 2000 and the issuance of the resolution in 2004," the AGCBA completed.
 

History

The privatization of the Zoo began in 1990 when the then mayor of Buenos Aires called a public tender for the concession for the category "urban renewal Plaza Italia-Zoo-Botanical- Sarmiento Avenue." The City Audit explains that that same year, "given the opposition of the Society," was left out of the operation of the botanical and finally, the company Zoo-Botanic 2000 SA took over the lease from February 1st 1991 for a period of 20 years.

The watchdog says the irregularities started at the time of bidding. First, the contract regarding the delivery of the property was not met "that materialized on the day fixed, but it would have been idle." At that time, there were two carousels and four kiosks.

"The principles of legality, impartiality, and contradiction were compromised (because) the municipal authorities of the Zoo were related to the bidding process and the contractor," adds the report, and then specifies that the executive coordinator of the Zoo, while running the Botanical it had a low function level, it was a shareholder of the Zoo-Botanic 2000. And who ran the zoo since September 1989, "was part of the evaluation commission of the bids and then continued as director, depending on the concessionaire."

Regarding the status of the department, the AGCBA argues that "the tender documents were drawn up without adequate knowledge of the tendered good. Ignorance of the situation of the property at the time of the bidding was shared by both parties: supplier and licensor". So much so that only 18 months into the contract, Zoo-Botanic 2000 called to double the budget  estimated due to the "difficulties, diseases, failures, ruinous states, lack of documentation, lack of plans, and needs to redesign."

Moreover, the Audit said "difficulties" in conducting its report, which was adopted last year on data from 1990-2008. Specifically, it referred to "having no access to the file by which the tender for the concession was to be processed" of the Zoo, and "the grant was found partially.”

Shares

After Zoo-Botanic 2000, in 1998, it took charge of the Inter Corporation Entertainment (CIE, for its acronym in Spanish). In July 2003, the CIE Argentina Group was renamed Commercial Controller CIE of Variable Capital. Six months later, in January 2004, there was a merger, where CIE International of Variable Capital absorbed Commercial CIE of Variable Capital.

After all these movements, the Buenos Aires Audit concluded that "the concessionaire transferred its shares at least four times, making changes in the composition of their capital and changes in the social contract, without prior approval of the Administration, incurring in offenses of the Bidding Terms and Conditions, and without the DG of Concessions applying any sanctions.”

According to the financial statements of the Zoological Gardens for 2006, its controller is 95%, CIE RP SA. While the sale of tickets is run by Ticketmaster Argentina SA, except that of the carousels, which are sub-granted by Dagusa SA. "As appears from the analysis of the documentation relieved, relationships exist between various sub-dealers, which would be verified in equity reciprocal investments, management positions or legal representations between those same dealers. The Zoo currently has five sub grants" said the AGCBA. However, the technicians emphasized that "every activity that took place on the grounds of the Zoo lack authorization.”

Canon
Zoo-Botanic 2000 had to pay per month a fee equivalent to 10% of the operating revenues. When it took over the property, the dealer assured to perform restoration, and until it recovered its investment, the fee would come only from the admission tickets, excluding other income. But the work did not progress.

After the 2001 crisis, the Government of the City of Buenos Aires established a plan to facilitate payment for public property dealers that were in debt, like Zoo-Botanic 2000. The Audit revealed that the company was included in the moratorium without ordering and without complying with the requirements needed for this benefit.

But that's not all: the report adds that the Bureau of Concessions and Privatizations reported that investment the company made had already been recovered in 1999. It is said that during that time the fee was calculated on a lower base: "This generated a difference between actual payment and what would have been entitled" explained the auditors. That difference would amount to $1,406,241.82.
 

Increased Inflows

Between February 1998 and December 1999, the Buenos Aires Zoo increased the value of the general admission from $3 to $4 pesos without authorization from the City Government. However, the canon was still established on the basis of $3 pesos.

After detecting this breach, the company was intimated to pay $ 231,151 for outstanding principal and interest.

According to the Audit, the dealer did not pay the fees in time for the first half of 2003. After several intimations, the company and the City signed an Agreement, Act I, which refinanced the debt to $207,849.94 in 12 consecutive monthly installments starting September of that year.

The AGCBA mentions that it was not provided any information on the number of tickets sold both passports as general admission tickets, or the proceeds from the various attractions, precisely the economic variables that are covered by the contracts between Zoo-Botanic 2000 and the five sub-dealers.