Raphael John-Lall

raphael.lall@guardian.co.tt

Every year, $26 bil­lion is spent on goods, works and ser­vices an­nu­al­ly.

When the Pub­lic Pro­cure­ment and Dis­pos­al of Pub­lic Prop­er­ty Act is pro­claimed it could help the coun­try save some of this mon­ey from waste and cor­rup­tion.

Out of this sum, more than $5 bil­lion can be saved an­nu­al­ly, ac­cord­ing to the chair­man of the Of­fice of the Pro­cure­ment Reg­u­la­tion (OPR) Mooni­lal Lalchan.

“Based on cal­cu­la­tions, out of the rough­ly $52 bil­lion na­tion­al bud­get, we es­ti­mate that $26 bil­lion is prob­a­bly spent on goods, works and ser­vices an­nu­al­ly. It’s not on­ly from the bud­get but from those or­gan­i­sa­tions that are self-suf­fi­cient like the First Cit­i­zens Bank, Caribbean Air­lines, Her­itage Pe­tro­le­um Com­pa­ny and oth­ers who are not nec­es­sar­i­ly de­pen­dent on the Trea­sury. But they are pub­lic bod­ies and spend sub­stan­tial mon­ey. For ex­am­ple, Her­itage Pe­tro­le­um, which spends on ex­plo­ration or Na­tion­al Gas Com­pa­ny on gas pipelines,” he said.

Speak­ing at the T&T Trans­paren­cy In­sti­tute’s (TT­TI) An­nu­al Gen­er­al Meet­ing last Wednes­day, Lalchan said be­tween 10 and 30 per cent of the mon­ey spent on pub­lic pro­cure­ment could be saved.

The OPR was es­tab­lished in 2018 to be the watch­dog of pro­cure­ment for pub­lic bod­ies with the process­es like ten­ders, con­tract man­age­ment and sup­ply of goods, works and ser­vices. It is al­so re­quired to in­ves­ti­gate any wrong­do­ing and to take the nec­es­sary steps to nul­li­fy con­tracts.

Lalchan said the main aim is to clamp down on bad prac­tices in pro­cure­ment and dis­pos­al of pub­lic prop­er­ty.

The OPR has met with more than 300 or­gan­i­sa­tions. Lalchan said any or­gan­i­sa­tion that re­ceives pub­lic fund­ing is re­quired to fol­low the re­quire­ments of the leg­is­la­tion.

Al­le­ga­tions of cor­rup­tion and the call for pro­cure­ment leg­is­la­tion go back decades.

It has been 40 years since the George Cham­bers ad­min­is­tra­tion ap­point­ed a com­mit­tee to con­duct a com­pre­hen­sive re­view of gov­ern­ment-to-gov­ern­ment arrange­ments for projects like the Mt Hope Med­ical Com­plex and the Hall of Jus­tice. Its find­ings were doc­u­ment­ed in what came to be known as the Bal­lah Re­port as the com­mit­tee was chaired by then Per­ma­nent Sec­re­tary in the For­eign Af­fairs Min­istry, Lennox Bal­lah.

Char­tered sur­vey­or and so­cial ac­tivist Afra Ray­mond re­called in his blog how Cham­bers had told a shocked coun­try that two out of every three dol­lars from the then oil boom had been stolen or wast­ed.

In more re­cent times, there was the Pi­ar­co Air­port con­struc­tion scan­dal where there were al­le­ga­tions of bid-rig­ging and fraud in the award of con­tracts for the $1.4 bil­lion project.

In June 2020, when the Curepe In­ter­change was in­au­gu­rat­ed, Prime Min­is­ter Dr Kei­th Row­ley said even im­proved and amend­ed pro­cure­ment leg­is­la­tion would not have helped the Gov­ern­ment save over $200 mil­lion on the project, as there were ways for cor­rupt politi­cians to use more tax­pay­ers’ mon­ey. The project came in at a fi­nal cost of $221 mil­lion.

Row­ley al­so re­ferred to the OAS Con­stu­to­ra, the orig­i­nal con­trac­tor on the Point Fortin High­way Project. For some rea­son, the for­mer Peo­ple’s Part­ner­ship ad­min­is­tra­tion re­moved the clause in the con­tract that held OAS Con­stu­to­ra, which even­tu­al­ly went bank­rupt, li­able and en­sured that they for­feit­ed their mul­ti-mil­lion bond. He said re­mov­ing that clause gave the bank­rupt­ed com­pa­ny a $921 mil­lion gift. In 2016, the Gov­ern­ment took OAS Con­stu­to­ra to court and re­cov­ered that mon­ey.

At a press con­fer­ence last Mon­day, Row­ley said he is anx­ious to have the Pub­lic Pro­cure­ment and Dis­pos­al of Pub­lic Prop­er­ty Act pro­claimed, and ex­pressed dis­ap­point­ment at the de­lay in full im­ple­men­ta­tion.

Pro­cure­ment of­fi­cers

Stake­hold­ers have com­plained that af­ter be­ing as­sent­ed to sev­en years ago, the leg­is­la­tion still has not been ful­ly pro­claimed and is still not func­tion­al. Lalchan said the main holdup is that some pub­lic com­pa­nies are yet to ap­point pro­cure­ment of­fi­cers.

Once the law is pro­claimed, it will take three months be­fore it re­places the Cen­tral Ten­ders Board which was set up in 1961.

“It de­pends on what needs to be put in place once we as­sess the var­i­ous re­quire­ments of the pub­lic bod­ies. We are work­ing with the At­tor­ney Gen­er­al and his team to put to­geth­er a time­line. The main rea­son why some of the pub­lic bod­ies are not ready as they have not ap­point­ed their main pro­cure­ment of­fi­cer which is re­quired un­der the Act to be ap­point­ed. That of­fi­cer is now re­spon­si­ble for pro­cure­ment and dis­pos­al ac­tiv­i­ties,” he said.

Lalchan said out of 415 pub­lic bod­ies, on­ly 130 have ap­point­ed pro­cure­ment of­fi­cers. Among them are the Na­tion­al Gas Com­pa­ny (NGC), the T&T Elec­tric­i­ty Com­mis­sion (T&TEC), Wa­ter and Sew­er­age Au­thor­i­ty (WASA), and Plipde­co.

“Once pro­cure­ment of­fi­cers are ap­point­ed that puts us in a good po­si­tion to give ef­fect to the full procla­ma­tion. We don’t ex­pect all 415 to be ap­point­ed im­me­di­ate­ly. So far we have had 1,000 re­quests for as­sis­tance from pub­lic bod­ies, so there’s a wide us­age of the Act al­though it is not ful­ly pro­claimed. It’s not like every­thing is at a dead stop.”

Neg­a­tive ef­fects

Lalchan called for an end to bad prac­tices with­in pub­lic bod­ies.

“Look at the re­gion­al health au­thor­i­ties and re­gion­al cor­po­ra­tions. We have put in place hand­books that guide the prac­tices of these dif­fer­ent en­ti­ties, for ex­am­ple, how they go about en­gag­ing sup­pli­ers and con­trac­tors in terms of com­pet­i­tive ten­ders. There are now a num­ber of ten­ders be­ing pub­lished in the news­pa­pers. That gives an idea of the new trans­paren­cy,” he said.

Us­ing the ex­am­ple of Na­tion­al In­sur­ance Prop­er­ty De­vel­op­ment Com­pa­ny (Nipded) and ex­pired med­i­cine he ex­plained: “There is about $87 mil­lion in ex­pired drugs to be dis­posed of. In terms of val­ue for mon­ey is whether we are co­or­di­nat­ing the ac­tiv­i­ties by the re­gion­al health au­thor­i­ties and Nipdec which is re­spon­si­ble for pur­chas­ing these and stor­ing them. One of the things about pro­cure­ment is when you pro­cure and put down these ex­pan­sive build­ings, do you look at main­te­nance or do you leave it to run down?

“Do they have main­te­nance con­tracts as­so­ci­at­ed with them or do they just buy and put them in a case? So the whole val­ue for mon­ey propo­si­tion cen­tres around the main­te­nance of our as­sets. What we have done is in­clude in reg­u­la­tions and our hand­books how they go about ex­tract­ing best val­ue for mon­ey in terms of pro­cure­ment, main­te­nance and then dis­pos­al.”

Be­fore the last Lo­cal Gov­ern­ment elec­tions, Lalchan met the line min­is­ter and all the re­gion­al cor­po­ra­tions’ chair­per­sons and CEOs.

“Sub­se­quent to that there was an elec­tion and new in­di­vid­u­als came in. Some of the con­cerns that are be­ing raised at the re­gion­al cor­po­ra­tions are that we all know what hap­pened in terms of the op­er­a­tions of crim­i­nal el­e­ments with­in some of those re­gion­al cor­po­ra­tions and how they try to go about ma­nip­u­lat­ing the process. That’s one of the ad­van­tages of get­ting this done as quick­ly as pos­si­ble to get rid of some of those be­hav­iours.

“There are tem­po­rary cler­i­cal em­ploy­ees in charge of com­plex pro­cure­ment ac­tiv­i­ties. This can­not con­tin­ue if we want to get val­ue for mon­ey.”

Lalchan added: “One of the main in­gre­di­ents is to have one data­base of con­trac­tors and sup­pli­ers that are pre-qual­i­fied. So far we have had over 1,000 of them, so pub­lic bod­ies can on­ly use pre-qual­i­fied con­trac­tors go­ing for­ward from that list. Pub­lic bod­ies can­not go about just pre-qual­i­fy­ing any­body. There’s now a struc­tured way. If a com­pa­ny has not paid their tax­es and they have not paid NIS and Health Sur­charge, they will not be pre-qual­i­fied and tak­ing part in state-con­trolled pub­lic ten­der­ing.”

Lalchan said three out­stand­ing sec­tions of the Pro­cure­ment Act that need to be com­plet­ed and act­ed up­on are Sec­tions 7.8, s57 (a) and 61.

Un­der Sec­tion 7, the Min­istry of Fi­nance has to pre­pare the terms of guide­lines for the cir­cum­stances in which cer­tain ex­empt ser­vices could be pro­cured.

“Un­der Sec­tion 7.6, which is an amend­ment to the Act, it says that the Act shall not ap­ply to the fol­low­ing ser­vices pro­vid­ed to pub­lic bod­ies or state-con­trolled en­ter­pris­es which are le­gal ser­vices, debt fi­nanc­ing ser­vices, med­ical emer­gen­cies, and such oth­er ser­vices as the Min­is­ter may by or­der de­ter­mine. The Min­is­ter shall sub­mit to the Of­fice its guide­lines which out­line the cir­cum­stances un­der which ex­empt ser­vices may be pro­cured. So that’s one of the things the Min­is­ter has to pre­pare in terms of guide­lines as un­der what cir­cum­stances these ex­empt ser­vices could be pro­cured,” he ex­plained.

Sec­tion 57 (a) of the Act states that notwith­stand­ing the State Lands Act and oth­er writ­ten law to the con­trary, the Min­is­ter may make reg­u­la­tions in re­spect of the dis­pos­al of state lands, re­al prop­er­ty owned by the Gov­ern­ment, re­al prop­er­ty owned by state-con­trolled en­ter­pris­es; and re­al prop­er­ty owned by a statu­to­ry body, re­spon­si­bil­i­ty for which is as­signed to a Min­is­ter of Gov­ern­ment.

The Min­is­ter of Fi­nance has to com­plete this part, he said.

The most ur­gent ac­tion need­ed falls un­der Sec­tion 61 which refers to the need for pro­cure­ment of­fi­cers in all pub­lic bod­ies. The Pro­cure­ment Re­view Board which will re­view de­ci­sions made by the OPR is still to be op­er­a­tionalised.

Stake­hold­ers

CEO of the T&T Cham­ber of In­dus­try and Com­merce Ian de Souza told the Sun­day Guardian the busi­ness com­mu­ni­ty is con­cerned about the slow progress in hav­ing the leg­is­la­tion pro­claimed.

“The Act has been par­tial­ly pro­claimed and the reg­u­la­tions have been ap­proved. As it is un­der­stood, how­ev­er, the train­ing of pub­lic of­fi­cers is be­ing un­der­tak­en to en­sure that pub­lic agen­cies are in a state of readi­ness to be able to com­ply with the pro­vi­sions of the Act and there­fore al­low for full procla­ma­tion. It is hoped that this train­ing and all oth­er at­ten­dant is­sues that would pro­vide for full procla­ma­tion of the Act would be ex­pe­dit­ed,” he said.

Derek Out­ridge, a con­sul­tant in the con­struc­tion in­dus­try, said he blames the Gov­ern­ment for in­ac­tion on the leg­is­la­tion.

“They have been the ones de­lay­ing the whole as­pect of pro­cure­ment by not prepar­ing wa­ter­tight leg­is­la­tion from the be­gin­ning, com­ing to the Par­lia­ment every time the in­dus­try calls for its im­ple­men­ta­tion with piece­meal amend­ments. This has now cul­mi­nat­ed in­to a view that the leg­is­la­tion is now un­work­able un­less a ma­jor over­haul has been done.”

Out­ridge called for leg­is­la­tion to set up a com­mer­cial court to deal with cas­es that come out of the con­struc­tion in­dus­try.

“The ju­di­cia­ry has not been giv­en the re­sources to set up a prop­er pro­cure­ment agency. The ju­di­cia­ry does not have a tech­ni­cal and com­mer­cial court sim­i­lar to what was set up in the Unit­ed King­dom to deal with mat­ters of con­struc­tion. As the bulk of that will end up in the courts.”

He is call­ing for the Gov­ern­ment to go back to the con­struc­tion in­dus­try for more con­sul­ta­tions be­fore the leg­is­la­tion is pro­claimed as they are among the stake­hold­ers who will be af­fect­ed.

“The leg­is­la­tion right now is im­po­tent,” he said.

Joint Con­sul­ta­tive Coun­cil For the Con­struc­tion In­dus­try’s (JCC) Fazir Khan blamed the Gov­ern­ment for the slow process of get­ting the leg­is­la­tion pro­claimed.

“The OPR was set up and they have done every­thing they have to do. They are ful­ly ready. On­ly last week the At­tor­ney Gen­er­al met with the reg­u­la­tor and this seems to be a back­ward and re­ac­tive move. It is for them to go to Cab­i­net and have the reg­u­la­tions pro­claimed and then have the Pres­i­dent do her part to make it law. The Act was passed in the two hous­es of Par­lia­ment. The reg­u­la­tions were passed in Jan­u­ary 2022 and in 2021 the Act was passed. There were al­so three amend­ments.”

He said that if the leg­is­la­tion is not func­tion­al it will sim­ply lead to more cor­rup­tion.

“We know it would be a dif­fi­cult sit­u­a­tion to change the sta­tus quo. This leg­is­la­tion will have far-reach­ing ef­fects in terms of how T&T pro­gress­es in spend­ing pub­lic mon­ey. What is more ir­re­spon­si­ble than al­low­ing $4 bil­lion to waste every year in cor­rup­tion and val­ue for mon­ey?”

High­lights of the Leg­is­la­tion

° It al­lows for the set­ting up of the OPR, a body to over­see the op­er­a­tional­iza­tion of the Pro­cure­ment Act. The OPR was es­tab­lished pur­suant to an Act of Par­lia­ment, name­ly the Pub­lic Pro­cure­ment and Dis­pos­al of Pub­lic Prop­er­ty Act, 2015. To al­low for the es­tab­lish­ment of the OPR, the ap­point­ment of the mem­bers of the board, the per­for­mance of cer­tain key func­tions of the OPR, and the draft­ing of Reg­u­la­tions, the Act was par­tial­ly pro­claimed by way of Le­gal No­tice 150 of 2015.

° Sec­tion 57 (a) of the Act speaks to the dis­pos­al of state prop­er­ty. Lalchan said reg­u­la­tions for this have to be com­plet­ed by the Min­istry of Fi­nance and that is an­oth­er rea­son why the Act still has not been pro­claimed

° Sec­tion 61 of the Act states that all pub­lic bod­ies must have a pro­cure­ment of­fi­cer and they shall com­mu­ni­cate that to the OPR in writ­ing

° Sec­tion 5 of the Act cov­ers val­ue for mon­ey. That in­cludes the val­ue de­rived from the op­ti­mal bal­ance of out­comes and in­put costs on the ba­sis of the to­tal cost of sup­ply main­tained on sus­tain­able use.

° Sec­tion 29 gives spe­cif­ic re­quire­ments to be a pre-qual­i­fied can­di­date to be placed on the data­base for a ten­der­ing pro­ce­dure. The can­di­date must be able to demon­strate that they have paid all their re­quired tax­es.