$23.6m WB loans to improve public procurement system

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FE Report
The World Bank (WB) approved Thursday a US$23.6 million credit from the International Development Association (IDA) to support Bangladesh's efforts to improve performance of its public procurement system.
The Public Procurement Reform Project II will support procurement reforms by improving procurement quality through better management and monitoring, said a WB press release.
The project aims to strengthen procurement management at sectoral level, create a sustained programme of developing skilled procurement professionals, and will introduce electronic government procurement in target agencies and the Central Procurement Technical Unit on a pilot basis. It is also designed to create greater awareness of a well functioning public procurement system by engaging civil society, think tanks, and the private sector.
Shortfalls in core governance, including inefficiencies in public procurement practices, poor financial management, corruption, and quality of civil service have led to low expectations for public services in Bangladesh. It has contributed to the high cost of doing business that, in turn, has deterred rapid private sector development.
"Public procurement is an integral part of the development process and a priority area for governance improvement," said Xian Zhu, World Bank Country Director for Bangladesh.
"Budgets get translated into services in large part through the operation of the procurement system. Improving the use of public resources with greater efficiency, transparency, and accountability, and tackling corruption will help give better value for money and contribute to reducing poverty," he added.
The Country Procurement Assessment Report 2002 for Bangladesh identified procurement as the single most significant issue affecting public sector performance, with enormous wastage of money. Following the report's recommendations, with the WB's technical assistance, the government has been implementing a public procurement reform project that has successfully addressed key deficiencies in the legal and policy framework.
The government established a procurement policy unit within the Implementation Monitoring and Evaluation Division of the Ministry of Planning, issued Public Procurement Regulations in 2003, and in July 2006 passed a procurement law in the Parliament.
The law and the regulations contain most features of international good public procurement practices. In addition, it developed a critical mass of procurement professionals, trained over 1,800 staff, and has been piloting an automated procurement performance tracking system. All of these actions are contributing to building confidence among people about the country's own procurement system.
"Widespread corruption within procurement systems is particularly damaging since it perverts public spending, reduces the value of public assets, and distorts the economy," said Zafrul Islam, Lead Procurement Specialist and the Project Team Leader.
"Public procurement is an arena where corrupt practices can be exposed and addressed, and successful implementation and monitoring of reform actions can help curb corruption,"
The project will target four agencies of key sectoral ministries (target agencies) chosen for the size of their annual procurement spending: Roads and Highways Department, Local Government Engineering Department, and Rural Electrification Board, and Bangladesh Water Development Board.
This project builds on the first Public Procurement Reform Project, which was approved by the WB on May 2, 2002.
The credit from IDA, the WB's concessionary arm, is interest free and has 40 years to maturity with a 10-year grace period. It carries a service charge of 0.75 per cent