Govt told to suspend all WB-funded projects

Letter vents dissatisfaction over changes to Public Procurement Act 2006
Rejaul Karim Byron
The World Bank has asked Bangladesh to put on hold all local procurement activities under WB-financed projects since the amendments made to the Public Procurement Act (PPA) 2006 are not consistent with its procurement guidelines.

In a WB letter to Finance Minister AMA Muhith, the WB has suggested that Bangladesh government “temporarily” suspend all local procurement activities under projects financed by WB until the financing agreements concerned are “amended with agreed new parameters” in order to minimise any possible disruption in project implementation.

“Once agreed, the new parameters will be reflected in necessary amendments to existing agreements between the Government of Bangladesh and WB which we hope will be signed promptly,” says the letter signed on November 9 by WB Acting Country Director Tahseen Sayed.

Copies of the letter were sent to Planning Minister AK Khandoker, prime minister’s Adviser Dr Mashiur Rahman, the cabinet secretary, prime minister’s secretary, Economic Relations Division secretary, finance division secretary and ministries concerned.

The WB says the amendment to the PPA will affect financing agreements of 24 active projects along with two project preparation facilities, and one trust fund administered by the WB.

It has provided a list of the projects that include the Padma Multipurpose Bridge Project.

The WB earlier objected to a few amendments to the PPA: lottery for works contracts, no-qualification or no-experience requirement and/or enlistment procedures for works contracts, rejection of bids above or below 5 percent of the estimate for works contracts, and single stage two-envelop process for procurement of goods and works.

The WB letter says procurements that take place on the basis of these amendments, which are not consistent with its procurement guidelines, will not be eligible for WB financing.

Finance ministry sources say the PPA was amended on November 4 despite the World Bank’s objections communicated to the government in two letters since the government initiated the amendment process.

The government wanted to make public procurement quite strict, but it failed as various ministries ruled out the WB objections.

The projects to be affected are Clean Air and Sustainable Environment Project, Higher Education Quality Enhancement Project, Dhaka Water Supply and Sanitation Project, Emergency 2007 Cyclone Recovery and Restoration Project, Siddhirganj Peaking Power Project, Secondary Education Quality and Access Enhancement Project, Additional Financing for Social Investment Programme Project, Disability and Children-At-Risk Project, Additional Financing for Rural Transport Improvement Project, Additional Financing for Municipal Services Project, Additional Financing for Social Investment Programme Project, National Agricultural Technology Project, Water Management Improvement Project, Public Procurement Reform Project II, Avian Influenza Preparedness and Response Project, Local Governance Support Project, Investment Promotion and Financing Facility Project, Health, Nutrition and Population Sector Programme, Economic Management Technical Assistance Project, Reaching Out-of-School Children Project, Water Supply Programme Project, Enterprise Growth and Bank Modernisation Project, Power Sector Development Technical Assistance Project, and Second Primary Education Development Programme.

Project Preparation Facilities in two proposed projects–Padma Multipurpose Bridge Project and Railway Modernisation Project–would also remain suspended.