Rot in public procurement: Cure still not in sight

Dhaka,  Monday,   2016-09-20
Published : 20 Sep 2016, 23:54:56

Rot in public procurement: Cure still not in sight

News Analysis
Shamsul Huq Zahid

'Whereas it is expedient and necessary to provide for procedures to be followed for ensuring transparency and accountability in the procurement of goods, works or services using public funds, and ensuring equal treatment and free and fair competition among all persons wishing to participate in such procurement, including the matters incidental thereto', reads the objective behind the adoption of the Public Procurement Act (PPA) 2006.

Ten years after its enactment, one does have ample reasons to wonder whether the pious objective would continue to be a mirage.

 An investigative report published in a Bengali contemporary last Monday on the state of procurement of medical equipment and machinery by a number of major government hospitals shows that the relevant piece of legislation has no bearing on the procurement, at least, in public health sector.  

The newspaper report started with how a supplier could manage withdrawal of his bill worth about Tk 180 million from the Dhaka Dental College and Hospital in the capital city without supplying a magnetic resonance imaging (MRI) machine. The principal of the college confirmed that the supplier had taken the money without making available the MRI machine to the hospital.

The report presented a vivid picture of massive irregularities in the procurement and supply of medical equipment and machinery in government hospitals in recent years. Allegations have it that some unscrupulous suppliers and contractors, in connivance with a section of dishonest officials of various government health facilities, embezzled over Tk.2.0 billion against false procurement.  

Interestingly, the suppliers, not the relevant authorities, in some cases, determine the requirement of medical equipment and machinery for a few government hospitals. The lists are then referred to the health directorate by hospital management with request for sanctioning funds against those. The health ministry and health directorate, allegedly, released funds worth Tk. 500 million and Tk. 1.5 billion respectively in the final month of last fiscal year (FY) against the proposal for procurement of medical equipment and machinery.  

But none, reportedly, is aware of any bids invited for procurement of those medical equipment and machinery.  There are instances where the suppliers got payments 40 to 50 times more than the actual market prices of the goods they made available to hospitals.

The Anti-Corruption Commission (ACC) is now carrying out investigation in a number of cases involving some of the government hospitals. Most allegations are related to procurement of medical equipment and machinery.

It, however, would not be fair to single out health sector since irregularities in procurement of goods and services -- the government spends more than US$6.0 billion on procurement annually -- are rampant in most public agencies operating in other sectors.

None knows for sure the extent of loss caused to the government every year because of irregularities in the procurement of goods and services. But there is a fair assumption that at least 25 to 30 per cent of the fund deployed annually on procurement is lost. It could, however, be more or less. But there is no way either to support or contest the assumption.

The government in 2002 established the Central Procurement Technical Unit (CPTU) under the ministry of planning. Following the enactment of PPA in 2006 and the Public Procurement Rules (PPR) in 2008, it was given the responsibility to help ensure the broad objectives of the PPA.

But the capacity of the CPTU does not match the responsibility that has been given to it from time to time. It is a tiny organisation with a limited number of manpower and logistics. It is not possible on its part to ensure transparency and accountability in procurements made by hundreds of public sector entities.

The CPTU is now engaged in implementing a procurement reform programme, bankrolled by a donor agency.

But neither CPTU nor its reform programme will be of any help unless and until men involved in procurement demonstrate honesty and integrity. The supplier will, naturally, try to indulge in irregularities to maximise their profits. But their evil intentions get support when men at the other end turn greedy and unscrupulous. There is no harmless cure for greed and dishonesty. The government, it seems, is not interested, to a large extent, to seek painful cure for the all-engulfing ailment called corruption.  

Should one, under the circumstances, raise a valid question: how has the nation been benefitted from the nearly 100 per cent hike in salaries of government servants? The taxpayers were told that the pay-hike would help cut the propensity to bribe-taking among the public servants. It was a false assumption. Rather the government servants have become more demanding these days. That is what most people allege.
Editor : A.H.M Moazzem Hossain
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