Nothing appears to stop overpricing in public procurement

Published: 00:00, Jul 16,2020


NOTHING, none of the earlier events of public procurement overpricing that earned widespread criticism, appears to stop the trend, which also speaks of a government complicity, now having woven almost a pattern in itself. The government in the latest such incident has approved a project on infrastructure upgrade in Dhaka’s north city areas for the installation of 12,218 light emitting-diode lamps and fitting accessories at a projected cost of Tk 1.2 billion for the 18 wards added to the city corporation jurisdiction in July 2017. Each of the LED lamps comes to cost more than an abnormal amount of Tk 98,215 under the project that the executive committee of the National Economic Council approved on Tuesday. Dhaka’s north mayor, however, seeks to brush aside, as New Age reported on Wednesday, the observation that the LED lamp units are overpriced as the units would have the light bulbs and fitting accessories such as cable, breakers and poles all for a warranty period of 10 years. But the cost of the units still appears to be much higher as a similar project of the Dhaka South City Corporation buys one unit for Tk 64,801 and the Chattogram City Corporation for Tk 43,887.

LED lamp units have also been bought for Tk 60,000 each, as media reports show, for an ongoing project of the Dhaka North City Corporation. The price that Dhaka’s north city authorities are ready to dish out for an LED lamp unit for the infrastructure upgrade of the new wards is not only higher than the cost for the similar job in other projects of the same and other city authorities but also much higher, by all standards, than the market price. Such LED lamp units imported from European countries, as local importers say, should not cost more than Tk 40,000–45,000 each, with fitting accessories each costing not more than Tk 20,000. Local producers of LED lamp units say that they usually sell a unit for prices between Tk 16,000 and Tk 18,000, with the wattage in the ranges of 100–150 and if the lamps are made lightning-proof, they may cost not more than Tk 30,000 each. The approval of the purchase of light bulbs for such high prices, which could be a means to unduly advantage certain quarters, does not only encourage corruption and cause losses to the state exchequer but also stops the government from putting in funds where they are badly needed for want of money, especially at a time when the COVID-19 outbreak has slowed down the economy. The lamps and accessories should rather be bought from local producers.

A series of such events of overpricing in public procurement has made the headlines since the Rooppur Nuclear Power Plant purchase scandal that came to light in May 2019. Public procurement overpricing has then spilled over to other areas, with incidents hitting the headlines one after another and some having also been rectified, perhaps, amidst criticism. The issue of high costs in public procurement, which is corruption committed to the benefits of suppliers and some officials who are corrupt, cannot be headed off without institutional reforms, capacity-building and a stringent measure of checks and balances. The government must, therefore, look into the issues stringently and deal with the loopholes to save public money and deterrently punish people involved in such practice.

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