KATHMANDU, JUN 05 -
The government has been working on a new Public Procurement Act in a
bid to cut the red tape hindering public enterprises from competing with
private companies with regard to purchasing products and technology.
Public enterprises like Nepal Telecom, National Trading and Nepal Food
Corporation have been complaining that the complicated procedures of the
existing Public Procurement Act have prevented them from making timely
purchases while private companies surge ahead as they are unfettered by
such rules.
In order to allow timely purchases, the proposed act has provisioned
that public corporations competing with the private sector can buy
whatever they need under their own Purchase Working Procedure after
getting the go-ahead from the Public Procurement Monitoring Office
(PPMO) that keeps a watch on public procurement.
The proposed law has inserted this provision under the heading of
Special Type Purchase Provision. The PPMO has prepared a draft act which
is being examined by different ministries.
According to Guna Raj Shrestha, legal officer at the PPMO, the proposed
act has also allowed government hospitals to make purchases through
their purchase working procedure after receiving the PPMO’s okay.
Similarly, the new act has opened the door for Nepali missions abroad to
make their own purchase working procedures as per local needs and laws
where they are located. They will be allowed to make purchases by
preparing a guideline after obtaining the approval of the PPMO.
“The current act has not considered that Nepal has offices abroad, and
this has made it difficult for Nepali missions abroad to make purchases
and sell goods owned by them,” said Anup Kumar Upadhyaya, secretary at
the PPMO.
“The present laws seem to have been designed for purchasing things
needed by road, irrigation and drinking water projects, and their
stipulations are impractical for other sectors,” said Upadhyaya.
The proposed act will also pave the way for purchasing goods through
negotiation if there is a single seller. Such a situation exists, for
example, when buying electricity as India is the only seller around. The
current act has not envisioned purchasing goods and services through
negotiation.
Since the current provision of awarding contracts to the lowest bidder
has led to anomalies, and complaints have been raised about the misuse
of the 20 percent mobilization fund given to contractors before they
start work, Upadhyaya said that the new act and regulation would resolve
these issues.
As per clause 27 of the present act, public entities have to select the
lowest bidder. This has created problems like non-completion of
development projects on time as contractors facing low profit margins
and losses flee and delay work giving various reasons.
Upadhyaya said that under the planned new act, public entities could
award the contract to a higher bidder if the lowest bidder does not meet
the technical requirement.
“Bureaucrats making professional decisions and not awarding the
contract to the lowest bidder have faced charges, and since then they
have stopped taking risks and have been awarding contracts to the lowest
bidder even if they were less competent. “No concrete decision has been
taken in this regard, but it will be resolved through the act and
regulation,” said Upadhyaya.
Likewise, the current Public Procurement Regulation allows public
entities to provide up to 20 percent mobilization fund while Finance
Minister Ram Sharan Mahat and Chief Secretary Lilamani Poudel have been
saying that such money is being misused by contractors.
Upadhyaya said that the necessary measures would be taken through an amendment to the regulation to solve this problem.
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