Ministries don't adhere to procurement rules

Kathmandu, Apr. 13: At least six ministries had completed the bidding process of the large projects in the last four months of the fiscal year. 

The Financial Procedure Rules, 2064 has a clear provision that the tender process must be completed within the first four months, but the ministries had flouted the legal provisions by concluding a large number of bids in the second and third four-month. 

The Ministry of Physical Infrastructure and Transport, Ministry of Irrigation, Ministry of Urban Development, Ministry of Water Supply, Ministry of Health and Ministry of Energy had managed the bidding of 4,873 projects equivalent of Rs. 124.8 billion in the second and third 4-month of the fiscal year. 

Approximately 664 bids, of Rs. 30.7 billion, were concluded in the last 4-month of the fiscal year, reported the Auditor General in its latest report. 

The ministries had issued tender for 5,344 projects worth Rs. 175.4 billion.

According to the AG report, the ministries had ridiculed the provisions of the Public Procurement Act, 2063. 

The law has prohibited the government agencies from procuring in fragments and limiting the procurement competition while the Ministry of Irrigation, Urban Development, Cooperatives, Water Supply, Health and Home Affairs have fragmented the construction and goods procurement in multiple segments and finalised procurement of goods and services worth Rs. 1.41 billion through non-competitive channels. 

Likewise, at least three ministries and line agencies had procured consultant services for different types of work which could have been performed by their own human resources and should have done so. It has increased the cost of the projects and added additional burden of Rs. 616 million to the state coffers. 

The report has pointed out that the variation of Rs. 1.2 billion made by the Physical Infrastructure, Irrigation, Water Supply and Urban Development ministries was not as per the law. 

“Though the variation should be done as per the public procurement laws and procurement agreement, the ministries have made variations in the works with predictable nature, variations were made by the officials who were not authorised to do so, variations were made without setting the necessity, and the money was paid without issuing the variation order,” reads the report. 

It has recommended formulating a policy for the contingency expenditure as about six ministries had mentioned Rs. 6.90 billion in this topic. 

The Auditor General has demanded action against the officials who involved in such activities.

After monitoring the procurement activities of 38 offices of 15 districts, the AG has concluded that most of the procurement activities were done by non-competent authorities, which created problems in identifying the bidders for the large and complex construction projects or goods for industrial plants and other high-cost items. 

It also invited the risk of allowing the black-listed bidders, consultants, suppliers, contractors and other firms in the tender process. 

The government is yet to define the qualification of the member of the procurement units, identification of large and complex bidders as well as develop the process of removing the black-listed companies from the list. 

Published in The Rising Nepal daily on 14 April 2018.