ENSURING TRANSPARENCY IN PUBLIC PROCUREMENT DEALS

THE issues relating to public procurement have been under the scanner of
major donors, media and experts since the government initiated moves to
amend certain provisions of the public procurement act (PPA). Despite
opposition from multilateral capital donors, the government got a few of
the controversial amendments to the PPA approved by the parliament. Some
local critics, however, had held the view that the amendments were
basically aimed at "distributing" favours among the ruling party workers
and supporter's at the local levels. On their part, some key development
partners had then communicated their opposition to the amendments,
maintaining that the changes would weaken an earlier law that was
otherwise aimed at ensuring transparency and accountability in public
procurement.

The government, for quite sometime, stood firm on its PPA amendment
stance. But it later appreciated the need for taking a fresh view of the
donors' argument. Some such donors had then reportedly conveyed their
decision to suspend disbursement of fresh funds to their aided projects
unless the government signed revised deals agreeing to follow their
procurement guidelines. The initial opposition of the government to the
donors' point of view on public procurement was partly because of the
reason for encouraging new local businesses in procurement-related
activities. There may be some pluses of this stance. But the admission by
the planning minister the other day about corruption and other
irregularities eating up often 40 to 50 per cent of the fund spent on
procurement in public sector projects would give here a contradictory
signal. Speaking late last week at the first meeting of the 27-member
public-private stakeholders committee (PPSC) formed last month with a view
to ensuring transparency and accountability in public procurement, the
planning minister made this observation.

The decision of the government to constitute a watchdog body involving
people from both private and public sectors is otherwise welcome. However,
there are some grounds for raising questions over the inclusion of the
representatives of a few organisations in the committee. Furthermore, it
also remains to be seen whether the newly constituted PPSC would be able
to monitor any irregularities in spending of a substantial amount of funds
on hundreds of projects under the annual development programme (ADP).
However, the job of the PPSC could be made relatively easy, in terms of
availability of technical expertise, if two relevant organisations --
Central Procurement Technical Unit (CPTU) and Implementation, Evaluation
and Monitoring Division (IMED) -- can effectively carry out their duties
and responsibilities.

Meanwhile, it would be befitting to note here the crux of the problem for
ensuring effective and efficient uses of resources meant for public
procurement of goods and services for different development projects, as
has rightly been pointed by out none other than the planning minister.
That relates to corruption involving public funds. The government will
need to demonstrate its seriousness about addressing this problem while
combating the menace of corruption. If the implementing agencies strictly
follow the provisions of the PPA in letter and spirit, notwithstanding
some recent amendments, and if also the "vested interests" do not meddle,
unduly, in the related process, the extent of corruption in the spending
of development funds can certainly come down to a tolerable level.