The Institute for Public Policy Research (IPPR) has described the government’s decision to bypass the Central Procurement Board of Namibia (CPBN) on its latest N$350-million projects as a recipe for corruption.
This comes after president Netumbo Nandi-Ndaitwah initiated a “business unusual” approach to fast-track development projects, particularly focusing on reducing delays in tendering infrastructure, housing, and industrial projects.
So far, the government has handpicked the Roads Contractor Company (RCC) and August 26 in construction projects without public tendering.
Theses include:
A N$140-million tender to construct sport stadiums in 14 regions, awarded to the RCC.
The N$50-million Wanaheda Namibia Traffic Information System project, awarded to August 26.
The refurbishment of a wing at Windhoek Central Hospital to accommodate government workers, awarded to August 26.
Speaking to The Namibian this week, IPPR research associate Frederico Links said the issue of bypassing the relevant institution is not advisable.
“The whole issue of bypassing good practice and the institutions and processes that are there to govern public procurement is not a good idea, it is a recipe for waste and corruption. How will this be justified?” he asked.
Links said the lack of transparency around direct procurement is questionable, specifically on how the money will be spent.
“You can do direct procurement and so on but as we have been saying for years now, the lack of transparency around direct procurement transactions has created this. There is no report on how the money is spent,” he said.
Links said direct procurement should only be done in exceptional and rare circumstances, and not be the norm.
The Public Procurement Act of 2015 requires that high-value tenders be handled through the CPBN to ensure transparency, fair competition and value for money.
Under this law, direct procurement is only in limited cases, such as emergencies, when only one supplier is available, or when competitive bidding is impractical, inefficient, or too costly.
Former Cabinet minister Calle Schlettwein, who was also responsible for overseeing the public procurement system at policy level, warns that bypassing the CPBN limits competition and reduces opportunities for local businesses and disadvantaged groups.
“The procurement is a regulatory framework, which on the one hand regulates procurement across the whole public sector, I believe to ensure transparency, consistency and fairness, but also value for money. By bypassing the provisions of the CPBN, these objectives of the act are lost,” he says.
Schlettwein says awarding large projects to state-owned enterprises such as the RCC and August 26, which may subcontract to foreign companies, can weaken local economic benefits and inflate costs.
“Local procurement, therefore, should be seen as procurement of locally procured commodities or at least with significant local content. Locally based agents – middle men – who merely order from abroad and sell locally were not intended to be treated preferentially. The objectives of value for money and stimulating local production are lost altogether when local production with significant local content is not strictly enforced,” he says.
He adds: “The observation that many high value tenders, which should have been dealt with by the CPBN, are given to state owned enterprises or are receiving exemptions sharply reduce the economic benefits that could have been derived otherwise.”
Schlettwein says the Public Procurement Act is a solid piece of legislation which promotes fairness and consistency.
In her national budget tabling statement on 26 February, finance minister Ericah Shafudah clarified that applying preferences in public procurement would be central to the government’s procurement approach and practices over the medium term expenditure framework.
Shafudah, in the context of public procurement, emphasised that the Code of Good Practice on Preferences would guide the implementation of preferential procurement.
CPBN spokesperson Johanna Kambala says the procurement board is not the overseer of the implementation of the Public Procurement Act.
“This responsibility lies solely with the Public Procurement Policy under the Ministry of Finance. This unit is responsible for making sure that public entities submit procurement projects exceeding their threshold to CPBN or recommend exceptions of such projects to the minister of finance.”
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