CHABY BARASA, DECEMBER 31, 2015
In his inaugural address to the 11th Parliament in Dodoma in November this year, President John Magufuli, spoke against wasteful spending of public funds on procurement of luxury goods and called for immediate amendment of the procurement law to address its shortcomings. Our Staff writer CHABY BARASA reports.
TO prove that he is determined to walk the talk, President Magufuli has intensified the anti graft crusade and embarked on a series of austerity measures aimed at checking wasteful government spending.
Accounting for more than 70 percent of government expenditures, it is no wonder public procurement has been in the spotlight, which has seen the suspension of chief executive officers of RAHCO and DART as the institutions are being investigated on allegations of flouting the procurement law
The Managing Director of the Reli Assets Holding Company (RAHCO), Mr Bernhard Tito, has been suspended to pave the way for investigations into allegedly gross procurement flaws in awarding tender for building standard gauge railway line linking Dar es Salaam and Kigoma as well as neighbouring countries of Burundi and DR Congo.
The Executive Officer of Dar es Salaam Rapid Transit (DART). project Ms Asteria Mlambo has also been suspended for similar procurement irregularities regarding the reported dubious process in awarding a tender to an interim service provider of the DART project.
During his inaugural speech, Dr Magufuli spoke at length how the public procurement law was being abused by unscrupulous suppliers who quote inflated and unrealistic prices of commodities, causing massive losses of public funds.
“Under the current law, a house that would normally cost 30m/- could end up being constructed for 200m/-,” he noted and stressed the need for value for money in implementation of public projects, saying that embezzlement of public funds and sub standard projects were among the concerns that the public needed immediate solutions for.
The President’s concerns have stirred to action the Law Reform Commission of Tanzania, which is now seeking recommendations from members of the public, government agencies, private entities and other stakeholders to facilitate the Commission’s research aimed at identifying the practical shortcomings in implementing the Public Procurement Act, 2011 and its regulations.
The research also seeks to identify repercussions on implementing the law to the government and its institutions.
“In order to facilitate the study and for the Commission to comply with the provisions of Section 10(1) (2) of the Law Reform Commission Act, Cap 171, the Commission calls for the public, government agencies and private entities involved to give suggestions, recommendations and opinions regarding the provisions of the Public Procurement Act, Chapter 410 and the Public Procurement Regulations,” says the statement released by the Commission recently.
The comments and suggestions, as per the Commission’s statement, may be general or about specific provisions of the Act or institutional system created by the Public Procurement Act, Chapter 410, based on; market fundamentals and dynamics of law, procurement process and procedural and institutional requirements, value for money, conflicts of laws and human factors such as unethical conduct, personal interest and corrupt practice.
To accomplish the research on time, the Commission has set 30 days, starting 15th December, this year, within which to receive the recommendations, which have to be submitted to the Executive Secretary of the Commission.
Study on the law follows difficulties experienced by the government and its institutions during implementation of the law, both in terms of costs, value for money and management of timelines.
“Experience has shown that since 2001 when the Act was enacted for the first time, there have been difficulties in the implementation of the law so much that objectives for its enactment have not been achieved.
This phenomenon has persisted even when Parliament repealed and re-enacted the new Public Procurement Act in 2004. The procedural requirements before making the actual purchase are both cumbersome and costly,” the statement further notes.
The Commission’s move has been welcomed by scores of stakeholders interviewed, however, most of them are of the view that the problem is not with the law but rather with unethical conduct of some individuals and Procuring entities that deliberately bend rules for their selfish motives.
“Indeed continuous improvement of the law is crucial and that is why we had the 2001 Act replaced by the new Public Procurement Act in 2004,” says Mawazo Mosses, a procurement officer with a Dar es Salaam logistics firm.
According to Mawazo, the country may boast the best procurement law, but unless the society learns to truly abhor corruption and other unethical tendencies, such legislation may not help much.
However a retired public servant, said the Procurement law needed immediate amendment as it currently encourages what he termed as ‘ten percent syndrome’, which he says is to blame for the inflated prices of commodities quoted by suppliers.
He called for stakeholders to air their views so that all shortcomings of the current law could be addressed and called for authorities to especially investigate local government authorities where he claimed procurement irregularities are rife with most tenders being dished out without any proper procedures being adhered to.
“It’s free for all kind of thing,” he observed, but conceded that having the law in the first place, albeit its weaknesses, is better than not having one at all.
He called for the Law Reform Commission to work closely with the ministry of finance, which said had earlier embarked in the process of collecting stakeholders’ views to address shortcomings in the procurement law.
While there are misgivings about the procurement law from some quarters, the Public Procurement Regulatory Authority (PPRA) stated recently that the overall compliance level of audited Procuring Entities (PE’s) in the country has increased from 65 percent last year to 69 percent this year.
However, the rise is still below the 75 percent target set for the Financial Year 2014/15. Procurement Audit Report based on procurement audits and verification audits of 80 PE’s, that included local government authorities, public authorities and Ministries, Departments and Agencies (MDAs).
“The objective of the audits was to determine whether the procedures, processes and documentation for Procurement and contracting were in accordance with the provisions of Public Procurement Act , Public Procurement Regulations and the standard documents issued by PPRA.
“ In addition, the audits sought to determine whether contracts had been or were being implemented in accordance with stipulated contract terms and conditions and whether value for money was achieved in spending public funds in selected construction contracts,” revealed the PPRA Board Chairman, Ambassador, Matern Lumbanga While the overall compliance level of the audited institutions had increased, the average compliance level for MDAs had dropped from 71 pc to 69 pc compared to last year’s results.
On the other hand, public authorities and local government authorities have shown improvements from 68 pc and 62 pc recorded last year to 71 pc and 67 pc respectively this time around.
As per Report, while 27 out of 80 PE’s were assessed to have satisfactory compliance levels above the target of 75 pc, the remaining 53 entities’ performance was below the set compliance target.
On the other hand, the overall assessment of corruption red flags indicated that nine out of the 80 audited entities were assessed to have corruption red flags of 20 pc and above, giving an indication that there is corruption likelihood in the audited projects.
In the course of Procurement audits, the auditors also observed serious delays on contractors payments. Notable delays were observed in road works contracts under Tanroads and water projects under local government authorities.
The delayed payments were mainly due to delays on non disbursement of committed funds from Treasury.
In the wake of the audit findings, accounting officers and heads of the entities with poor performance had been directed to appear before the PPRA Board to show cause why disciplinary and legal action should not be recommended to the competent authority.
On the other hand, the audit reports for all procuring entities and specific projects with detected likelihood of corruption with scores of 20 pc or above are to be submitted to the Prevention and Combating of Corruption Bureau (PCCB), for further investigation.
Other directives require accounting officers of procuring entities where overpayments had been verified to have been made to contractors or suppliers; to recover the overpaid amounts while for ongoing projects, a report on the final account has to be submitted to the Authority for verification.
As the Law Reform Commission continues to receive recommendations from stakeholders, the expectation of many is that whatever loopholes in the current procurement law as directed by President Magufuli would finally be plugged.