19 September 2011

Cleaning the glass on the Procurement Portal

At the Extractive Industries Transparency Initiative (EITI) conference last month, the Minister of Finance unveiled the Transparency Portal's new section on procurement. La’o Hamutuk applauds this initiative, which moves Timor-Leste in the right direction, increasing public information and reducing possibilities for collusion and corruption.

Although sometimes cumbersome to use and requiring internet access, the Portal contains valuable information about contracts signed during the past three years.  We have downloaded the Portal’s information on 288 contracts worth at least $250,000 each and put it in a sortable spreadsheet which may make it more accessible.

Of the $1,100 million in listed contracts, $844 million (including six of the largest seven contracts) was spent on electricity. The largest contract was awarded last September: $406 million to Puri Akraya Engineering to build the heavy oil power plants at Hera and Betano. Unfortunately, this contract had no public tender and was signed with a just-formed Indonesian company, 69% of whose shares are held by “Dooks Group Holdings Ltd.” of the British Virgin Islands. 

Portal doesn’t show most projects open for bidding

Unfortunately the portal doesn’t yet include much about “Business Opportunities,”  showing only three open tenders, two of which actually closed in August. On the other hand, Current Tenders on the Ministry of Finance website shows four open tenders, and four other intents to award contracts.

The open tenders on the MoF site include one for a consultant to conduct an Environmental Impact Assessment for the Tasi Mane petroleum infrastructure project.

Perhaps more interesting is the Intent to Award a $100 million contract to import 9,237 prefabricated houses for the MDG-suco program which will erect five houses in every aldeia (village) in Timor-Leste during 2011. The contract to Carya Timor Leste and Jonize Construction is for more than double the $44.6 million allocated for this project in the 2011 State Budget. The original tender (bidding document 3.5 MB), was to import and build 11,855 houses – at $4,000 per house – but the soon-to-be-awarded contract will cost $10,800 per house. The Government reduced the number of houses after Carya/Jonize bid $144 million, “due to a budget shortfall faced by the Government.”

La’o Hamutuk agrees with local contractors that this project is a lost opportunity to use public money to support local employment and small businesses, and to use local materials, notwithstanding the stated rationale for importing “standard, pre-fabricated houses ... to complete the construction of new houses within a tight timeframe.”  In addition, requiring a single company to import/build ten thousand houses excludes small businesses from bidding. We also wonder about the availability of imported parts and skills to maintain the houses once rural people are living in them and the importer has moved on.

1 comment:

  1. In May 2012, La'o Hamutuk wrote a letter to the Minister of Finance pointing out that this Portal and other parts of the Government's transparency portal were not fulfilling its promises. See http://laohamutuk.blogspot.com/2012/05/lh-urges-more-effective-tl-transparency.html