14 February 2013

Namibia: Schlettwein Prefers Public Bidding to Exemptions

TRADE and Industry Minister Calle Schlettwein says he favours public bidding instead of tender exemption, as it gives the government more options and a chance of better and competitive prices.

Schlettwein was the permanent secretary of finance and also chaired the Tender Board when exemptions ballooned to N$12 billion in a space of four years - from 2004 to 2007.

"In general, it is not wise to exempt most tenders because public bidding most of the time gives you the preferable deal," he said yesterday when approached for comment.

"Open bidding process is the best, but it's not the only option. Whatever option is used, it should be transparent," he said.

The Namibian reported earlier that there is a trend emerging at various ministries where they request exemptions under the guise of urgency or security concerns or to empower small and medium businesses, while the real reason is to benefit companies owned by people close to officials involved in the procurement process.

The Tender Board has the responsibility of allocating tenders for government construction projects and procurement of goods required by government institutions.

Schlettwein said if there is a weakness in the system, then it needs to be addressed to correct the loopholes.

The Public Procurement Bill will soon replace the Tender Board Act once enacted.

Schlettwein, who spent seven years at the Ministry of Finance, hopes that the new procurement bill will address the shortcomings.

He says there are various factors that led to the escalation of exemptions.

"Exemptions are not all the same. The bulk of exemptions were taken up by operational tenders," he said.

Operational tenders include things like consumables which are needed to keep the government running.

But the Tender Board's annual report shows that N$1,58 billion worth of tenders for construction work were exempted from public bidding in 2007, which should fall under capital projects. Schlettwein believes that bilateral loan agreements had a role to play in the exemption of these big projects. International agreements, especially loans for the construction of capital projects, come with conditions, Sclettwein explained.

The lack of annual reports of the Tender Board since 2007 has fuelled speculation that tender exemptions could have spiralled in the past five years.

No Tender Board annual reports have been made public since 2007. The Finance Ministry has promised to make public its annual reports next month.

Finance Minister Saara Kuugongelwa-Amadhila in 2010 tabled three old annual reports of the Tender Board for the 2005-06, 2006-07 and 2007-08 financial years.

The past three years have been crucial for the Finance Ministry, especially relating to tenders issued under the Targeted Intervention Programme for Employment and Economic Growth (Tipeeg) which came into force in 2011. It is expected that more government tenders were exempted through this programme to give small and medium enterprises an opportunity to get government jobs.

Government launched the N$14,7 billion Tipeeg plan in 2011 in order to create 104 000 permanent and temporary jobs during the three fiscal years between 2011-14.

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