Honorable Minister of Planning, retired Air Vice Marshall A. K. Khandakar
Honorable State Minister for the Ministry of Science and Information & Communication Technology, Architect Yeafesh Osman
Mr. Secretary, Implementation Monitoring and Evaluation Division (IMED), Distinguished Guests,
Ladies and Gentlemen:
Public procurement reform is a key element in strengthening governance, public sector management and accountability in Bangladesh. The World Bank considers electronic government procurement an effective tool in advancing public procurement reform.
It is most encouraging today to see representatives from Government, the private sector, the contracting and consulting industry, NGOs, universities, professional bodies, and development partners to help finalize electronic procurement guidelines, a prerequisite to implementing electronic procurement in Bangladesh. Let me also take this opportunity to express my deep appreciation to the Minister of Planning for honoring us with his presence, and to the Implementation Monitoring and Evaluation Division (IMED) of the Ministry of Planning for organizing this event.
At the World Bank, we place a great deal of emphasis on public procurement reform. It is well-documented that weaknesses in public procurement have a cumulative negative effect on investment and economic growth. Poor public procurement skews investment toward areas where rent-seeking is prevalent, rather than toward the areas that need it most for poverty reduction and development.
The World Bank is pleased to have contributed to the progress that Bangladesh has made in improving the public procurement process. This includes adopting a world-class public procurement law which—despite recent unfortunate amendments—continues to serve as the foundation for Bangladesh. Recent innovations like the Private-Public Stakeholders Committee and the development of a decentralized public procurement monitoring system are also notable.
The World Bank’s recently endorsed Country Assistance Strategy for Bangladesh calls for improving governance to strengthen accountability at the central and local levels. It highlights the opportunity to use information communications technology to increase access to information, enhance the efficiency and privacy of services, and strengthen monitoring for better accountability.
Electronic procurement has the potential to make public contracting more accessible, more secure and more efficient, thereby enhancing the implementation of priority development programs. It relies on secure web-based platforms to communicate with bidders in a paper-less environment, free from inconveniences, delays and physical insecurities. Through the web interface, procurement information becomes accessible and competition and transparency are enhanced-- making collusive bidding difficult. It would be expected to generate substantial cost-savings on the approximately $ 3 billion in goods, works and services procured annually by Government.
For many countries, electronic government procurement has, indeed, proved a cost and time-saving tool. Several Indian states, such as Andhra Pradesh and Karnataka, are pioneers in electronic procurement, which has resulted in greater competition and cost savings. In Romania, an e-procurement system paid for itself through cost savings within six months of establishment, while Korea’s system led to an average 15% cost reduction, worth $ 2.5 billion.
Vested interest groups which gain from a lack of transparency and efficiency will certainly oppose real public procurement reform. Success will require sustained commitment from the bottom to the top of the system. It is heartening to know that Government places the highest priority on moving to an electronic government procurement system. The World Bank will staunchly support Government’s commitment, and will—through the financing of the Public Procurement Reform Project and the Local Government Support Project—continue to enhance connectivity at district, upazilla and union parishad levels.
Already the hardware for Government agencies in key sectors has been procured. The software development and internet connectivity for these key agencies are also underway. Government is ready to begin piloting the electronic tendering module in January 2011.
Of course, piloting cannot begin until Government reaches closure on guidelines for electronic procurement. Today’s workshop will provide the basic framework for how this will be implemented, although other features—such as liability of implementing agencies and authentication of bidders using electronic/digital signatures--will require more in-depth consultations.
The potential gains of the electronic government procurement system cannot be over-stated, but implementation will need to carefully planned and sequenced. Thoughtful guidelines are a prerequisite, and we are counting on each of you to bring your best judgment and different perspectives to this task today. Best wishes for success.