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News analysis
Yet another twist in public procurement law saga
Shamsul Huq Zahid

          The government has dragged its feet again on the Public Procurement Act (PPA). Surprise, surprise!
But what is most surprising is that the government of late has resorted to duplicity in a bid to hoodwink the largest multilateral donor -- the World Bank (WB).
According to newspaper reports, in the face of strong opposition from most ministers, the much-awaited cabinet approval of the final draft of the PPA was deferred Wednesday last and a decision was taken to form a cabinet committee to further examine the draft.
But a handout issued by the Press Information Department same night said the Cabinet in principle approved the PPA with certain amendments. Once the cabinet approves the final draft of an act, there remains no scope for examining the same by any committee.
It did not take too long a time for the WB to know what had transpired at the cabinet meeting. And, apparently, as a token retaliatory measure, Monday cancelled $ 1.02 million from the funds it provided to three projects alleging violation of procurement norms. The Bank has also asked the government to refund the amount in question and take action against officials concerned.
Investigations detected evidence of "inappropriate" and "collusive" bidding practices in the projects, the WB said. If the WB desires, it would certainly hit mines of such irregularities.
The latest development centering the PPA would obviously multiply the worries of Finance and Planning Minister M. Saifur Rahman who had tried his best to get the PPA approved by the cabinet. The finance minister badly needs external funds to improve the country's balance of payments (BOP) situation that occasionally comes under strains. The WB officials told him point blank in September last to transform the existing Public Procurement Rules (PPR)-2003 into a full-fledged law before November (current month) if he really intended to receive the third tranche of the Development Support Credit (DSC).
The WB board of directors is scheduled to consider the disbursement of the tranche in its meeting scheduled for November 18 next.
It is not unusual that the proposed PPA would face stiff opposition from ministers, particularly when they had opposed tooth and nail the PPR framed in 2003. The PPR was also introduced at the insistence of the WB to rein in massive corruption in public procurement.
However, the basic objective of the PPR could not be fulfilled in many cases as authorities concerned relaxed some of its provisions while making procurement of goods and services. The Bank became really annoyed when the government amended certain rules of the PPR recently and wanted the government to enact a new law on public procurement.
But why should the ministers oppose the PPA that aims at ensuring transparency in public procurement? Is there any valid reason behind such opposition?
Newspaper reports quoting cabinet meeting sources said except for the finance minister none of the cabinet ministers had spoken in favour of the draft PPA. Rather some ministers reportedly claimed that if introduced the law would make the government procurement more expensive and time-consuming. It was alleged that certain clauses of the proposed Act would increase scopes for corruption.
There is no denying that corruption in public procurement has been rampant. People have been witnessing for decades how public funds meant for procuring goods and services are either misused or misappropriated by the ruling politicians and government officials in the absence of harsh punitive actions.
It is also no secret how inappropriate and collusive biddings are widely practiced in government supplies and development projects, particularly in districts and upazila levels, to favour ruling party leaders and workers.
Given the scale of corruption in public procurement, the positive sides of the proposed PPA, by any measure, would outweigh the negative sides, if there is any. Those who are opposing the PPA do need to take, at least, a couple of issues into consideration. The country, no matter one likes it or not, has been rated as the most corrupt by the Transparency International (TI) for the fifth time in a row and one of the main sources of such corruption is public procurement of goods and services. So, it would be a wise decision to have an effective deterrent to corruption in public procurement programmes. Moreover, the multilateral donor agencies, which are often, justifiably or otherwise, blamed for attaching harsh conditions to their aid programmes, are the providers of soft-term loans to poor countries like Bangladesh. Unless and until the country can do away with dependence on such institutions for development activities, it has to bear with certain conditions. However, the WB condition relating to the PPA can no way be termed as a harsh one. It is a good meaning condition that needs to be supported by all.
But there is a catch in the PPA issue that also needs to be taken into cognisance by the WB and other multilateral donors.
Some of the bilateral donors may feel uncomfortable with the proposed PPA since they at times insist on bypassing competitive bidding, particularly in the case of tied-loans and suppliers' credit. The government, much to the annoyance of the multilateral donors, accepts such loans failing to secure soft-loans for some important development projects.
When the proposed PPA comes into force, it would be difficult for the government to fall back upon such hard bilateral loans. In that case, the multilateral donors would be required to fill in the gap. But will they?


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