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New Reports Measuring Gender, Trade, and Public Procurement Policy

October 7, 2013 Leave a comment

AllAfrica.com

25 SEPTEMBER 2013

PRESS RELEASE

The World Bank and Commonwealth Secretariat launched two new publications this week centering on women in business.

‘Women, Business and the Law 2014′ measures how national laws, regulations and institutions differentiate between women and men in ways that may affect women’s capacity to work or set up and run businesses.

The report was launched by the World Bank and International Finance Corporation (IFC) at the Commonwealth Secretariat’s headquarters in London on Tuesday, 24 September.

Dr Augusto Lopez-Claros, Director of Global Indicators and Analysis at the World Bank and IFC said: “In 79 countries the law restricts the types of jobs that women can do. These jobs are often in industries that are higher paying and that creates a pay gap. In the twenty-first century many of these restrictions no longer make sense.”

The Secretariat also presented ‘Gender, Trade and Public Procurement Policy‘, which focuses on how policies for procuring goods and services for government departments can be used effectively to enhance business opportunities for women.

The procurement market often makes up to 10-15% of the GDP of developed countries and can amount for as much as 30-40% of GDP of developing countries. The report looks at how public procurement policies can be used as a tool to open up the market to Small and Medium-sized Enterprises (SMEs), including women’s businesses, which are often in the informal sector.

It includes case studies and lessons from four Commonwealth countries: Australia, India, Jamaica and Kenya.

Interim Director in charge of Gender, Health and Education at the Secretariat, Esther Eghobamien said: “The research has demonstrated the impact of public procurement policy as a vehicle for enhancing opportunities for SMEs and women-owned business. Any growth in that sector will translate into real gains for women living below the poverty line.”

World Bank debars Ghanaian firm over bribes

October 2, 2013 Leave a comment

SupplyManagement

October 2, 2013 | Will Green

The World Bank has debarred a Ghanaian company for paying bribes in deals connected with a $17.6 million urban sanitation project in Liberia.

Waste management company Zoomlion Ghana will not be eligible for any contract financed by the World Bank for two years, after the firm acknowledged misconduct in the Emergency Monrovia Urban Sanitation Project.

According to the World Bank the company “paid bribes to facilitate contract execution and processing of invoices”.

The bank said the debarment was part of a “negotiated resolution agreement” that acknowledged the company’s “cooperation and disciplinary measures against staff involved in the misconduct”.

As part of the settlement the company will need to demonstrate “full and satisfactory compliance with the World Bank integrity standards”. The sanction came into force on 24 September.

Leonard McCarthy, integrity vice president at the World Bank, said: “This is a case where a company under a World Bank investigation is demonstrating responsibility for wrongdoing by enforcing disciplinary action and committing to a new standard of integrity governing its operations.

“Promoting this type of corporate responsibility while holding companies accountable for wrongdoing is one of the strategic pillars of the World Bank’s anti corruption strategy.”

The Liberian sanitation project, costing $17.6 million, is designed to assist the Monrovia City Corporation in providing waste services and increase the volume of collected waste from around 30 per cent daily to 45 per cent.

Africa needs qualified procurement professionals

May 25, 2013 Leave a comment

Ghana Business News

May 23rd, 2013

Mr Samuel Sellas-Mensah, Chief Executive of the Public Procurement Authority (PPA), has said developing countries need well qualified procurement professionals to manage the challenges in the current global economic environment.

He said: “The current global economic environment, which is evident in high levels of unemployment, increased perceptions of corruption, inadequate hard and soft infrastructure and devastating effects of climate change, makes it imperative for the continent to have well qualified procurement professionals”.

Mr Sellas-Mensah said this when he opened a three-day Chartered Institute of Purchasing and Supply (CIPS) Pan-African Conference in Accra on Tuesday.

The event is under the theme: “The Strategic Role of Procurement Professionals in the Development of Africa.”

He said when public procurement was effectively managed by well qualified professionals, there was bound to be rippling effects that could lead to improvement in the economies of developing countries.

Mr Sellas-Mensah said though most factories in Africa might be as productive as those in China and India, the prices of their goods were normally not competitive due to the poor management of their value chains and the lack of requisite infrastructure.

He said there was the need for investment in the training of well qualified procurement professionals who would be able to eliminate all forms of waste and inject efficiency into their sourcing and acquisition process.

Mr Sellas-Mensah said qualified procurement professionals would provide the continent with efficient, professional, accountable and transparent functions, by using their expertise to negotiate and tap into the global supply chain to fit into the principles of procurement.

He said procurement professionals were able to conduct effective ‘supplier and spend’ analysis that would inform managerial decision and align procurement strategies to organizational goals.

Mr Sellas-Mensah said there was a strong correlation between corruption and bad procurement practices and its debilitating effect on African economies, saying countries practicing effective procurement systems were on the path of curbing corruption.

He said investing in the growth and development of procurement professionals on the continent would be a sure way for Africa to realize its dreams and aspirations.

The Chief Executive of the PPA said his outfit had over the years made some achievements due to the development of new procurement monitoring and evaluation tools, publication of manual to operations of public procurement practitioners and training modules of procurement practitioners and the high ratings by the World Bank.

“Our experiences and achievements for almost a decade can attest to the strategic importance of procurement professionals in national development.

“Since public procurement constitutes 20 per cent of GDP of most developing economies and absorbs 50 per cent of their revenue exclusive of government wage bills, it is believed that the procurement function is critical in delivering both functional and horizontal objectives of any development agenda,” he said.

Fixing Fraud in Public-Private Projects

April 24, 2013 Leave a comment

Blogs.WorldBank.org

BY LEONARD MCCARTHY

What’s a cash-tight government to do when it wants to modernize a hospital, build a railway, or expand the power grid to reach underserved areas? It might explore outside, private sources of financing—that’s where public-private partnerships (PPPs) come in.   The acronym has a promising ring to it, yet going back to the 1970s, its impact has been mixed.  At their best, PPPs can provide rapid injections of cash from private financiers, delivery of quality services, and overall cost-effectiveness the public sector can’t achieve on its own.

But at their worst, PPPs can also drive up costs, under-deliver services, harm the public interest, and introduce new opportunities for fraud, collusion, and corruption.  Our experience at the World Bank Integrity Vice Presidency is that because PPPs most often are geared toward providing essential public services in infrastructure, health and education, the integrity risks inherent in these sectors also transfer to PPPs.

On April 17, the Integrity Vice Presidency convened a public discussion on corruption in PPPs (pdf) bringing together finance, energy, and fairness-monitoring perspectives.  Looking at the landscape, in the last eight years, 134 developing countries have implemented PPPs in infrastructure, and in the last decade the World Bank has approved some $23 billion lending and risk guarantee operations in support of PPPs.

Opening the event, World Bank Managing Director Sri Mulyani recounted examples from her previous life as Indonesia’s Minister of Finance. She reminded the audience that while fraud in PPPs can seem abstract, the quality, safety, and human costs are very real—such as when a bridge crumbles after only five years, though it was supposedly built to last 15.

CBS News State Department correspondent, Margaret Brennan, moderated the discussion and did not let panelists get away with being too polite. She tried to pinpanelists (pdf) down on which countries consistently faced the biggest corruption problem, and how we can fix it.  As my colleague Rashad Kaldany, Vice President and COO at IFC said, “This happens everywhere in the world, all countries, bar none.” The problem is global, which is why the solutions also should be similarly global and applicable in diverse situations.

If there was a theme to the discussion, it was the desire to level the playing field with global standards on PPP transparency. Roger Bridges, president of Knowles Consulting in Canada,  suggested the World Bank design a certification system for transparency and governance. Receiving that certification would be completely voluntary, but also demonstrate a credible commitment and capacity for internal governance.  Roger said that ultimately the certification could be rolled into an overall grading system for PPP participants.  Participants might, for example, receive 10 out of a possible total of 100 points for being certified.  A carrot—not a stick.

Rashad suggested an initiative in the integrity area modeled on the Equator Principles. Start with a few, major international players who agree to standardized practices and principles in PPPs. Once established, media and civil society groups can help mobilize others to sign on, gradually expanding adherence to the principles until they become a broadly accepted norm of conduct.

Establishing new norms sounds like it could take forever, but attitudes and norms can change faster than you think—Paul Clifford said in the past 8 to 10 years he has seen “difficult conversations” with clients about conforming to the Equator principles’ environmental and social standards become accepted as “automatic.”

Corruption is deliberate, serious and bad business.  Based on the discussion yesterday, I believe there would be broad support for what I like to call Global Integrity Principles. PPPs are inherently opaque and risky because they are often long-term, complex financial arrangements. Those risks can be reduced if the terms, costs, and benefits are made more understandable and accessible to governments, private parties, and consumers.

The questions we want to address at the World Bank are, specifically:  How should integrity due diligence be adapted for PPPs?  What do integrity principles in national PPP laws look like? What should regulators do to review concession and other related arrangements for red flags? Are additional disclosure requirements needed to flush out politically exposed persons? And finally, how do we obtain more effective public scrutiny of PPP deals throughout the PPP project cycle?

No doubt, we have a number of difficult and complex issues to sort out.  The way forward is to embrace optimism, even though in 1911 Ambrose Bierce described it as an intellectual disorder.

Nigeria: FG saves N420bn in 15 months from new procurement law

April 23, 2013 Leave a comment

Nigerian Tribune

By  Odidison Omankhanlen – Lagos

April 22, 2013

The Director-General, Bureau of Public Procurement (BPP), Mr Emeka Eze, has said over N420 billion had been saved for Federal Government in the last 15 months through the activities of the bureau on contract valuation.

 Ezeh, who was speaking at the opening of a retreat for Chief Executive Officers in Federal Government’s Ministries, Departments and Agencies (MDAs) organised by the Bureau, in Lagos, at the weekend, explained that the said fund was recovered after valuation of contracts that were submitted by contractors, stating that the reduction in contract sum further emphasized the core value of BPP as the drive of public procurement and prudence in public expenditure.

 He assured that the bureau would continue to ensure that there was transparency in the bidding process for contracts in the country, stressing that all competent contractors would be given a level playing field to demonstrate their capacity and pass through open competitive bidding process enshrined in the Act.

He explained that the BPP would continue to work hard to ensure the cost of doing business in the country was reduced through the elimination of multiple registration and pre- qualification as well as tendering process that should be increased to give chance for equal competence and capabilities.

“It is important to highlight the Bureau’s effort in promoting transparency, accountability, efficiency and fairness in public sector procurement and the Transformation Agenda of the present administration. The default procurement method remains competitive Tendering, as it is, is the surest guarantee for quality and transparency which PPA 2007 envisages. The direct procurement and selective tendering are the exception rather than the norms,” he said.

On the relevance of the retreat, the BPP boss said it was to identify the deficiencies in the 2012 budget implementation process, so that this year’s budget could be more successful, adding that the participants would also have opportunity to know the procurement process.

He noted that through similar retreats for other public officers, they were now beginning to see public funds as monies to be spent with care, and with high sense of responsibility, adding that these gains were a resultant improved budget implementation and performance in terms of project delivery.

“The benefits of the programme cannot be over emphasized because as it develops, the cost of doing business in the country would reduce through the elimination of multiple registration and pre-qualifications in the various MDAs. The quality of prequalification and tendering process should increase at the end of the day coupled with the better grouping of contractors, consultants and service providers of equal competence and capabilities,” he stated.

Ezeh noted that with the classification of contractors and consultants by the bureau, there will be increased discipline in the Federal procurement process, noting that only capable and competent contractors and service providers would become identifiable and considered for deserving jobs.

He was optimistic that the bureau was working assiduously to consolidate on- going collaboration with the World Bank, the United Nations Development Programme (UNDP), the Washington based International Law Institute (ILI) and the Federal University of Technology (FUTO), Owerri, to establish a public procurement research centre.

Also speaking at the event, Chairman, House of Representatives Committee on Public Petitions, Hon Uzor Azubuike, explained that efficient public procurement is vital to the development of the country as it regulates the developmental capital component of the annual budget.

“Contracts should not be awarded at inflated prices. We should stop giving specific contractors more contracts than they can handle.

Contractors that have records of abandoning contracts should be blacklisted. The BPP should not stop at procurement, but go ahead to monitor contracts awarded to ensure Nigerians get value for money,” he advised.

World Bank Advised Ethiopia to Audit Large Telecom Agreements

January 14, 2013 Leave a comment

Business Ethiopia

Reporter

January 11, 2013

The World Bank (WB) in its report on the status of corruption in Ethiopia advised the government to audit Ethio Telecom’s large agreements. 

According to the report launched this morning at the Hilton Addis, focusing on the level of corruption in the country in different sector sectors, the government needs to apply standards to Ethio Telecom that are in line with Ethiopia’s Public Procurement Proclamation.

The report, “Diagnosing Corruption in Ethiopia”, in its subtopic that assessed the level of corruption in the telecom sector also stated that absence of uniform procurement standards is one of the major causes of corruption, among others.

The report highlighted that the vendor financing contract entered into by the then ETC (Ethiopian Telecommunications Corporation now named Ethio Telecom) in 2006 appears to be highly unusual. “…This brief study should not be seen as an investigation or interpreted as alleging in itself that corruption has necessarily occurred. However, the circumstances as perceived both by stakeholders and by independent observers do raise serious questions about the control of risks in this sector.”

The stakeholders of the then 1.5 billion US dollars vendor financing argue that ETC’s financial requirements were not provided in detail to those suppliers (other than possibly the winning supplier –China’s ZTE) that had been approached to consider providing such financing. The report also stated that there is no evidence of a formal tender procedure for the finance package.

“The supplier selected by the ETC to supply the finance package that suited the ETC’s purposes. The equipment supply element of the vendor financing contract was not put out to competitive tender.”
The report stated that generally the contract was not in accordance with the ETC’s procurement procedure and no competitive tender for the contract and subcontracts.

“Difficulty in measuring technical compliance: By appointing one supplier without competitive tender, the ETC has no opportunity to assess the degree of technical compliance of the supplier’s equipment. The contract was also inappropriate and went through unclear procedures for ensuring technical quality and competitive pricing,” according to the report.

In addition, the report further mentioned that Ethio Telecom is vulnerable to corruption because it is under government monopoly.

Health, education, water, justice, construction, land and mining are also the sectors surveyed by the report sponsored by the World Bank, Canada International Development Agency, UK Aid and the government of the Netherlands.

“Some of the recommendations of the report are under implementation,” said Ali Suleman, Commissioner of the Federal Ethics and Anti-Corruption Commission (FEACC).  While the report also recalled that in January 2008, the FEACC 2008 brought charges against a former ETC CEO and 26 former ETC executives for allegedly “procuring low-quality equipment from companies that were supposed to be rejected on the basis of procurement regulations.”

World Bank country Director, Guang Zhe Chen, on his part stressed that the purpose of the study is conducted to support evidence-based policy formation.

Ethiopia: Is ECX at it again? ECX’s upcoming procurement bid

November 30, 2012 Leave a comment

Nazret.com November 29, 2012


By Wondwossen Mezlekia, 

The Ethiopia Commodity Exchange (ECX) is currently conducting a high-ticket international procurement – the first of its kind since a multi-million dollar bid was busted in 2010 due to alleged fraud and corruption during the bidding process.

The bid for the supply, installation, and maintenance of a futures trading software that ECX floated back in 2010 was marred by dishonest maneuvering, seemingly to favor the Sri Lanka based company, Millennium IT, and World Bank withdrew ECX’s award proposal and cancelled the loan. The loan was part of what the government had borrowed from International Development Association (IDA) for the purposes of financing the Rural Capacity Building project. [1] Strangely, the said futures trading software was not needed to begin with and would have been running idle today had ECX purchased it in 2010, because the government is, as it has always been, decidedly against price speculations and hence would not allow Forwards and Futures trade operations that the software was supposed to support.

ECX is once again preparing to spend some of the money that the government has borrowed from the Investment Climate Facilities for Africa Trust (ICF) and other donors on an online trading platform at an estimated total cost of more than $10 million (exact amount and details are withheld). Arguably, much like the futures trading software, the merit of this investment is also questionable, especially in light of ECX’s and the government’s current priorities, the details of which is for another article. The purpose of this article is to equip concerned citizens with the information and resources they need to be on their guard against corruption, and to put on notice anyone who may be under temptation or illusion to fraudulently benefit from the upcoming bid. Although there is no evidence so far, it is better to prevent corruption than to prosecute it.

According to ECX’s budget proposal that was reviewed for this article, almost 76% of the budget for the online trading project will be covered by funds from the World Bank’s Rural Capacity Building Project. ICF has agreed to cover the financing gap of about 24% of the total estimated budget through a grant. The procurement is being conducted under the auspices of the outgoing officers, Dr. Eleni Gebre-Medhin, Solomon Edossa, and Ahadu Woubshet who only have an advisory role under a one-year contract, even though the new CEO, Anteneh Assefa and other officers have already assumed their positions.

The Invitation for Bid (IFD) for the procurement of a core system for online trading, including its risk management, surveillance, and clearing components (Procurement Reference Number ECX-ICF/G/002/2012) was advertised on November 1, 2012 on national papers and online, including on dgMarket. [2] Accordingly, the bid will be opened in two phases: the technical bid will be opened on November 30, 2012 at 10:30 am local time at ECX Media Room, and the opening date for the financial bid will be announced thereafter.[3] The bidding will be conducted in accordance with the open International Tendering Procedures contained in the public procurement guidelines of the Government of Ethiopia, the ICF Guidelines[4], and the International Competitive Bidding (ICB) procedures.

The past record of the government in detecting or prosecuting suspected fraud and corruption is dismal. On the other hand, donor’s guidelines have proved to be reliable sources of defense in past disputes involving international procurement bids. Among these, ICF’s guidelines appear to be by far clearer and strictly dictating how the borrower and bidders alike should behave during the bidding process. For example, ICF not only offers to provide assistance of audit services and monitoring (Article 1.6), but also explicitly states the steps that it takes to fight fraud and corruption (Article 1.7).

Review, Assistance, and Monitoring

1.6 ICF and auditors appointed by ICF shall review the Grant Recipient’s selection process for the selection of suppliers proposed by the Grant Recipient in the Procurement Plan to ensure compliance with the Grant Agreement and these Guidelines. The Grant Recipient shall retain all documentation with respect to each contract during project implementation and up to two [y]ears after the closing date of the Grant Agreement. This documentation would include, but not be limited to, the signed original of the contract, the analysis of the respective proposals, and recommendations for award the record of justification, the capabilities and experience of the suppliers, for examination by ICF, auditors appointed by ICF or by its suppliers.

Fraud and Corruption

1.7 It is ICF’s policy to require that Grant Recipients, as well as suppliers and their subcontractors under ICF-financed contracts, observe the highest standard of ethics during the selection and execution of such contracts. In pursuance of this policy, ICF will reject a proposal for award, cancel the portion of the Grant allocated to a contract; sanction a supplier if it at any time determines that the tender process was marred by corrupt, fraudulent, collusive, coercive, or obstructive practices. In addition, ICF will have the right to require that, in contracts financed by an ICF grant. a provision is included requiring suppliers to permit ICF to inspect their accounts and records and other documents relating to the submission of proposals and contract performance and to have them audited

Articles 2.1, 2.15, and 2.21 of ICF’s guidelines also require borrowers to conduct bidding by following a two-tiered approach and based on Quality and Cost Based Selection (QCBS), which uses a competitive process that takes into account the quality and the cost of the services in the selection of the winner. The guidelines prohibit evaluators of technical proposals from having access to the financial proposals until the technical evaluation is concluded.

The Selection Process

2.1 QCBS uses a competitive process among short-listed firms that takes into account the quality and the cost of the goods and supplies in the selection of the successful supplier. Cost as a factor of selection shall be used judiciously. The relative weight to be given to the quality and cost shall he determined for each case depending on the nature of the assignment.

Evaluation of Proposals: Consideration of Quality and Cost

2.15 The evaluation of the proposals shall be carried out in two stages: first the quality, and then the cost. Evaluators of technical proposals shall not have access to the financial proposals until the technical evaluation is concluded. Financial proposals shall be opened only thereafter. The evaluation shall be carried out in full conformity with the provisions of the RFP.

Articles 2.11 and 2.12 if IFC’s guidelines even go as far as to dictating the minimum time that grant recipients need to allow between the different stages of the procurement process. For example, the minimum time-limit for receipt of proposals should not be less than 40 days from the date of the advertisement, except in emergency situations.

While these and other Articles of ICF’s guidelines appear to provide reasonable controls around each segment of the procurement processes, any control is only as strong as the people applying them. It is thus imperative that concerned citizens and bidders get engaged and attentively monitor all international bidding processes conducted at ECX and other institutions in order to prevent misappropriations of foreign aid in Ethiopia.

Report suspected fraud and corruption to Investment Climate Facility for Africa at info@icfafrica.org or projects@icfafrica.org; the World Bank Group’s Integrity Vice Presidency at investigations_hotline@worldbank.org; or Transparency International at transparency@transparency-usa.org.

[1] http://poorfarmer.blogspot.com/2012/03/is-government-serious-about-fighting_19.html
[2] http://www.dgmarket.com/tenders/np-notice.do~8547811 (dgMarket is an international portal for tenders and procurement opportunities from governments and international organizations)
[3] The time elapsed between the date of advertisement and the bid opening date appears to be shorter than the minimum time limit set under Articles 2.11 and 2.12 of ICF’s Procurement Guidelines
[4] http://www.icfafrica.org/documents/ICF-Procurement-Guidelines-for-Goods–Suppliers.pdf

Read more about ECX at http://poorfarmer.blogspot.com/p/ecx-watch.html
Contact the writer at poorfarmer@gmail.com

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