Prime Minister, Mizengo Pinda
PRIME Minister, Mizengo Pinda has the Government will no longer tolerate losses incurred in local councils, other public institutions and private sector through malpractices that are conducted by procurement and supplies professionals.
He said public procurement expenditure in Tanzania, like in other developing countries, accounts for nearly 80 percent of total Nation’s Development Budget especially in provision of goods, works, services and advisory services popularly known as consultancies.
The Premier made the remarks in Arusha on 14th December, 2011 when opening the 2nd Procurement and Supplies Professionals and Technicians Annual Conference at the Arusha International Conference Centre (AICC).
He said for quite some time, the country has witnessed poor quality materials and goods being procured, partial or non-deliveries of procured goods, over-invoicing, damaged goods, stolen and misappropriated materials, poor recording and storage of materials, dubious procurement contracts and corrupt practices in procurement and materials management functions.
“Such weakness therefore cannot be tolerated. As I said earlier, materials and contract works consume about 80 percent of Nation’s development budget… Such losses therefore, are working against our efforts to hasten economic growth on poverty reduction and improvement of welfare of our citizens,” he stressed.
He told the participants that a recent procurement audit conducted by PPRA in 174 procurement entities of which 63 were ministries, regions, independent departments and agencies, 60 were parastatals and 51 local government authorities (LGA’s) revealed that, the level of compliance to the public procurement act 2004 was low as only 68 percent of those audited complied.
He told them that 39 entities scored above 80 percent, 115 recorded an average level between 50 and 80 percent while 20 scored below 50 percent. He said the areas that had poor performance were: Procurement Planning, Establishment of Procurement Monitoring Unit (PMU), Quality Assurance, Contract Management as well as Publication of Awards.
“The report which also included value for money audits in 136 construction projects including 81 road projects, 33 building projects, 13 irrigation projects and seven bridge projects revealed that only 61 projects which is 44.9 percent were implemented in adherence to the Law,” he said.
On the other hand, Premier Pinda added that 59 projects which is equivalent to 43.4 percent had an average level of performance while 16 projects or 11.8 percent projects were poorly implemented.
Furthermore, the Premier said, the immediate effect of inefficiency and malpractices in the Management of Procurement and Materials is excessive Government expenditure. He cited some dubious transactions in some procurement entities where a total of 238.84 million shillings was paid for non-existing works in District Councils of Bahi, Geita, Magu, Mvomero and Sengerema.
Premier Pinda said the Controller and Auditor General’s (CAG) reports on the other hand have revealed huge losses that the Government incurs year after year through Procurement.
“For the financial year ending 30th June 2010, for Central Government Ministries and Departments, the CAG cited instances for non compliance with Public Procurement Act, 2004 specifically on four areas namely: Frequent Procurement purchases based on direct shopping or quotations, instead of competitive tendering; Lack of planning for procurement projects; Ineffective Tender Boards e.g. failure to meet regularly and inadequate records keeping on procurement proceedings.
“The report indicated that there was a non-execution or delay in completion of contracted works in a number of capital projects and contracts to a total of Tanzanian Shillings 1.5 billion. These were caused by inadequate supervision and monitoring, inadequate plan, and design of poor works at initial stage of the Contract or Project,” he said.
“The need for efficient, transparent and cost effective procurement system in the country cannot be over-emphasized. In this regard, I urge PPRA to work together with CAG to help the Government address the problem of non compliance to the Public Procurement Act that causes heavy losses of Public Funds.
He said the planned level of compliance to the Law by the Government is aimed at achieving 80 percent compliance by the year 2013/2014. He urged all Government Procurement Entities (PE’s) to make sure that they reach that target.