Poison pill
The need to amend the Anti-Money Laundering and Countering Terrorism Act (AMLCT) has given the opposition parties some leverage over an intransigent administration that appears unwilling to govern the country in the interest of all Guyanese. The Alliance For Change (AFC), one of the opposition parties, cognizant of the possible nexus between money laundering and public procurement, has decided to link passage of the amendments to the law with the establishment of the Public Procurement Com-mission (PPC). It is difficult for the government to frontally object to the establishment of the PPC in the context of a debate on money laundering since it knows that the establishment of the PPC would help to strengthen the effective use of the anti-money laundering legislation that it is trying to improve. In what appears as a further effort to delay the establishment of the PPC, it has decided to use a poison pill of requesting a continued “No Objection” role in the procurement process in the hope that the Opposition would back away from its proposal.
Expose
The Opposition has enough legal brainpower on its side to know that it should not swallow the poison pill of the administration to then get dressed and buried in an undignified manner in a political cast net. It should therefore know also that it could afford to ignore this latest manoeuver to thwart the setting up of the PPC since the “No Objection” role is redundant and of little value to the integrity and financial management of the public’s resources as discussed in this two-part article. Undoubtedly, the fears are plentiful within the administration that an independently operating PPC that evaluates contract financing and performance in accordance with the functions stated in the Constitution of Guyana could expose far more than poor contract performance.
In discussing the PPC, many seem to think that its usefulness is merely in improving transparency and preventing corruption in public spending. But, the PPC has a more fundamental role in helping Guyana to transform from a resource-driven economy to an efficiency-oriented one. To the extent that a functioning PPC reviews past practices, it could expose patterns of unfair competition, unusual variances in contract spending by budget agencies and plain bad management of the financial affairs of the State, events that drive prices up and weaken the competitive strength of the nation. In going forward, the PPC could help improve contract performance, increase competitiveness and aid companies in their search for more efficient ways to deliver products or services by making public the findings from the periodic analyses that it is required to undertake.
Not necessary
According to the Procurement Act, Cabinet reviews contracting decisions over a given threshold ostensibly to ensure that the procurement process was not violated. This role was being performed in the interim until the PPC was established. In 10 years of the existence of the legislation, Cabinet has not given the country any comprehensive insights into the strengths or weaknesses of the law, even as it tangled with the Opposition regarding the creation of the constitutional body. Such insights could have provided domestic entities with valuable information for decision-making. No one knows from the administration if all projects are completed, if they were completed on time, the amount of cost overrun if any, how often penalties had to be used against contractors, which reasons are most often cited by contractors for project delays, and how unit prices for products and services with repetitive demand are behaving.
In other words, the country does not know where to direct resources to improve project performance since it is not being told where the strengths and weaknesses in the system lie. None of this information has been offered by Cabinet, even though the PPC is supposed to lay a report before the National Assembly each year with recommendations for improving the procurement process where necessary. One must wonder also to what extent the budgeting and management exercises of the administration benefit from information derived from such analysis, given its inability, for example, to defend the resources requested by the National Communication Network in 2012 and to let the public know the outcome of the fraud investigations into that entity.
In light of the preceding information, it is not necessary to make the “No Objection” role of Cabinet permanent. For one, Cabinet seems not to have either the time or interest in providing a full and substantive report on procurement activities in the country. A “No Objection” role for Cabinet could be a hindrance to improved efficiency. But, there is another reason that Cabinet should be removed altogether from the review process. The Procurement Act provides the administration with total control over the procurement process that a “No Objection” role is a redundant course of action. And further, given its current set up, the excesses of the procurement system could only come from within the administration and a “No Objection” role as a final decision point in the review process is tantamount to leaving the administration with the exclusive right to police itself. This is not a sterile concern since periodic newspaper submissions advocate, under the theory of separation of powers, total control by the Executive with no restraining role for Parliament. The contempt for checks and balances in the system and the rule of law is so strong that such persons are willing to ignore that Parliament is a supreme organ of the land with the constitutional authority to “make laws for the peace, order and good government of Guyana.”
Redundancy
It must be remembered that the procurement process does not start with the decisions of the PPC. The public procurement process is a chain of events that starts with the deliberations and decisions of the administration often made by its Cabinet. The Cabinet is made up of Ministers of the government. Each Cabinet Minister is responsible for a Ministry that has a portfolio of activities that must be undertaken. The portfolio often reflects the policy priorities of the government and the Ministries seek to ensure that the policy priorities are achieved. One of the ways in which the Ministries go about implementing the priorities of the government is through the purchase of goods and services or the undertaking of capital investments. These functions are performed by agencies and departments of the government and by using the services of vendors or contractors.
Tender Board
Where vendors or contractors are involved, a tender or bidding process is used, except under special circumstances. Each Ministry, Agency or Department creates a Tender Board which has jurisdiction over procurement activities by that Ministry or other public entity. Each Tender Board of each Ministry evaluates the purchase of goods and services using persons that the Tender Board of the Ministry would have chosen. Those chosen persons, who make up the Evaluation Committee, are usually approved by the National Tender Board. In addition to controlling the Tender Board of the Ministries, the administration also controls the National Tender Board. By virtue of these two circumstances, the administration
controls the procurement process in the public sector.
LUCAS STOCK INDEX
The Lucas Stock Index (LSI) rose 2.16 per cent during the first week of trading in June 2013. A total of 542,900 stocks of six companies in the index changed hands this week. The LSI recorded four Climbers while there was no movement for the stocks of two companies. The Climbers this week were Demerara Distillers Limited (DDL) which rose 1.88 percent on the sale of 506,000 shares. Demerara Tobacco Company (DTC) also rose 4.26 per cent in light trading of 200 of its shares. Guyana Bank for Trade and Industry (BTI) reversed its fortunes, rising 8.43 per cent on the sale of 6,100 shares and Sterling Products Limited (SPL) jumped 27.27 percent with the sale of 1,000 shares. Banks DIH (DIH) and Demerara Bank Limited (DBL) remained unchanged on the sale of 18,900 and 10,700 shares respectively.
(To be continued)
