Procurement act change seeks status quo ante in variation order -
See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=85766#sthash.vh2F6sPK.dpuf
By Rudra Pangeni
KATHMANDU, Oct 31: The authority of government secretaries to approve variation orders in construction contracts was ended by the Public Procurement Act 2007, but now a draft amendment seeks to restore the authority for up to 10 percent. A variation order is issued for payments for construction project work which could not be foreseen during the project design and cost-estimate stage.
The draft amendment says that the provision for restoring the discretionary authority of the secretaries is meant to make variation orders more accountable.
Following implementation of the procurement act in 2007, all variation orders above 15 percent of the total project were decided by the cabinet. However, high-level officials maintain that the variation orders became impractical for the cabinet ministers to handle and several such orders became subject to political pressure.
According to the act, project chiefs and departmental chiefs decide 5 and 10 percent of variation orders respectively.
Secretary at the Ministry of Physical Infrastructure and Transport, Tulasi Sitaula, said that secretaries were stripped of their power variation orders purportedly to exercise greater control over such orders. But several projects have suffered delays because of the need for the decision to be taken by the cabinet.
Former finance secretary Krishna Hari Baskota has welcomed the latest decision as it distributes authority from the cabinet to the line ministries and should result in faster and more practical decision-making.
According to some engineers, however, secretaries who are not from an engineering background may take longer to take their decisions.
But Secretary Situala said that a secretary is not alone in taking the decisions on such important financial issues. He also pointed out that non-technical secretaries are also given charge of ministries of a technical type.
“There is a committee comprising officials from the Comptroller General’s Office as well as experts to help the secretaries decide on such issues,” added Sitaula.
Variation orders are full of anomalies as the contract bidders try to bag projects by hook or by crook and through low bidding. But they are accused of later coming up with artificial needs for expanded work and such demands also get approved, a clear indication of rampant corruption, it is pointed out.
“There are genuine cases to be made for variation orders, such as changing the alignment of a tunnel the need for which could not have been foreseen during the project design stage,” said Baskota. He also accepted that there are big anomalies in variation orders and suggested making the engineers who design the construction projects more responsible.
During a discussion Thursday on the amendment draft prepared by the government, many lawmakers at the parliamentary Finance Committee demanded that unlimited authority should not be given to the bureaucrats over large projects.
Construction contracts at hydropower projects, particularly projects developed by Nepal Electricity Authority, have become a haven of corruption and are riddled with controversy.
The Finance Committee has itself found anomalies in variation order to the tune of Rs 1.09 billion at the Chameliya Hydropower project and the committee’s study file has been forwarded to the Commission for Investigation of Abuse of Authority (CIAA). There are similar anomalies alleged at the Upper Trishuli 3A, Kulekhani Hydropower III and other projects.
Experienced engineers have suggested that the anomalies have become rife in hydropower projects due to the unlimited authority given to the executive bodies at government-run entities and companies, including NEA.
The amendment draft makes no mention of placing a limit on such authority. “In principle, the cabinet should not be sitting on the procurement process but several procurements for the Pokhara Regional International Airport, the Upper Trishuli 3A upgrade project and many others were decided by the cabinet,” Baskota pointed out. - See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=85766#sthash.vh2F6sPK.dpuf
See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=85766#sthash.vh2F6sPK.dpuf
By Rudra Pangeni
KATHMANDU, Oct 31: The authority of government secretaries to approve variation orders in construction contracts was ended by the Public Procurement Act 2007, but now a draft amendment seeks to restore the authority for up to 10 percent. A variation order is issued for payments for construction project work which could not be foreseen during the project design and cost-estimate stage.
The draft amendment says that the provision for restoring the discretionary authority of the secretaries is meant to make variation orders more accountable.
Following implementation of the procurement act in 2007, all variation orders above 15 percent of the total project were decided by the cabinet. However, high-level officials maintain that the variation orders became impractical for the cabinet ministers to handle and several such orders became subject to political pressure.
According to the act, project chiefs and departmental chiefs decide 5 and 10 percent of variation orders respectively.
Secretary at the Ministry of Physical Infrastructure and Transport, Tulasi Sitaula, said that secretaries were stripped of their power variation orders purportedly to exercise greater control over such orders. But several projects have suffered delays because of the need for the decision to be taken by the cabinet.
Former finance secretary Krishna Hari Baskota has welcomed the latest decision as it distributes authority from the cabinet to the line ministries and should result in faster and more practical decision-making.
According to some engineers, however, secretaries who are not from an engineering background may take longer to take their decisions.
But Secretary Situala said that a secretary is not alone in taking the decisions on such important financial issues. He also pointed out that non-technical secretaries are also given charge of ministries of a technical type.
“There is a committee comprising officials from the Comptroller General’s Office as well as experts to help the secretaries decide on such issues,” added Sitaula.
Variation orders are full of anomalies as the contract bidders try to bag projects by hook or by crook and through low bidding. But they are accused of later coming up with artificial needs for expanded work and such demands also get approved, a clear indication of rampant corruption, it is pointed out.
“There are genuine cases to be made for variation orders, such as changing the alignment of a tunnel the need for which could not have been foreseen during the project design stage,” said Baskota. He also accepted that there are big anomalies in variation orders and suggested making the engineers who design the construction projects more responsible.
During a discussion Thursday on the amendment draft prepared by the government, many lawmakers at the parliamentary Finance Committee demanded that unlimited authority should not be given to the bureaucrats over large projects.
Construction contracts at hydropower projects, particularly projects developed by Nepal Electricity Authority, have become a haven of corruption and are riddled with controversy.
The Finance Committee has itself found anomalies in variation order to the tune of Rs 1.09 billion at the Chameliya Hydropower project and the committee’s study file has been forwarded to the Commission for Investigation of Abuse of Authority (CIAA). There are similar anomalies alleged at the Upper Trishuli 3A, Kulekhani Hydropower III and other projects.
Experienced engineers have suggested that the anomalies have become rife in hydropower projects due to the unlimited authority given to the executive bodies at government-run entities and companies, including NEA.
The amendment draft makes no mention of placing a limit on such authority. “In principle, the cabinet should not be sitting on the procurement process but several procurements for the Pokhara Regional International Airport, the Upper Trishuli 3A upgrade project and many others were decided by the cabinet,” Baskota pointed out. - See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=85766#sthash.vh2F6sPK.dpuf
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