PUBLIC ENTITIES' PROCUREMENT: Govt moves to bring it under cabinet purview

The Ministry of Finance has moved to bring the procurements made by all entities, which have public investments, under the purview of the cabinet committee/advisers' council on economic affairs "to ensure transparency and accountability", officials say.

Also, the move is aimed at reducing the "contingent liability" of the government, they add.

However, the Cabinet Division finds implementing the initiative "very difficult" and thinks it may not be possible considering the volley of complications that will arise.

Sources say the Finance Division in a letter in late July requested the Cabinet Division to take initiatives to include the procurements made by state-owned or joint venture companies - where the government has ownership or shares - under the purview of the cabinet committee.

However, Finance Division officials did not calculate the number of companies that would come under the purview of the cabinet committee upon the initiative's materialisation.

"We did not make a list of the companies for the same reason," says a joint secretary of the division.

He says they are yet to receive any communication from the Cabinet Division since the proposal was sent there.

Presently, any procurement made by ministries/divisions; departments/directorates; offices under the ministries, and semi-government and autonomous bodies; and state-owned industrial units and amounting to over Tk 500 million needs approval from the cabinet committee/advisers' council on public procurement.

Another Finance Division official says as the state-owned and joint venture companies remain out of the purview of the cabinet purchase body, their boards of directors can make decisions on procurements amounting to below Tk 500 million.

"In those procurements, transparency and accountability are not always maintained properly," he says.

Thus, the Finance Division wants to bring them under the purchase body's purview, which may also help lessen the contingent liability of the government, he adds.

After being approached by the Finance Division, the Cabinet Division sought opinions from the Bangladesh Public Procurement Authority (BPPA), the Implementation Monitoring and Evaluation Division (IMED), and the Legislative and Parliamentary Affairs Division.

According to sources, the IMED in its reply said the government has investments in the public sector or joint venture companies registered under the Company Act 1994, and their profits and losses are important for it.

It said the procurements made by these entities could be brought under the purview of the cabinet purchase body like other procurements made by the government.

In this case, the IMED also opined that the Public Procurement Rules 2008 needs to be amended so that the cabinet purchase committee's terms of reference can also be revised.

Sources say the Cabinet Division recently held an inter-ministerial meeting after receiving opinions from BPPA, IMED, and the law ministry.

The participants opined that the Public Procurement Rules 2008 needs to be amended, while the company act also requires scrutiny to change the cabinet purchase committee's terms of reference.

They were also of the opinion that the move would raise complications and may not be legally possible in many cases.

One of them said the government has shares or investments in companies like Unilever and British American Tobacco, or banks like IFIC and Bangladesh Commerce Bank.

"Being a shareholder, does the government have the right to control the procurements made by such companies? Does the government have enough manpower to look after the purchases made by such a large number of companies it has shares or investments in?" he asked.

Dr Zahid Hussain, a former lead economist of the World Bank's Dhaka office, tells The Financial Express the concept of transparency is being "misinterpreted" here since there is no guarantee that purchases through the cabinet body will ensure transparency.

He says many state-owned companies were given autonomy so that their boards can make operational decisions and they do not run like government departments.

They will run on a commercial basis like any other company, he also says.

"If the purchase decisions become centralised, where does the autonomy remain?" he asks.

Mr Hussain says the completion of their purchase will become a lengthy process then since they will have to spend a lot of time on getting the schedule of the cabinet purchase body.

"I do not think this is a good move from the government," he says, adding, "This will be nothing but an expansion of the empire of bureaucracy".

He also says this bureaucratic expansionism will only delay decisions without ensuring any improvement in their quality.

"I think this concept needs to be cancelled at the very beginning."

syful-islam@outlook.com