Kathmandu, August 27 :

For the first time in Nepal, government is set to introduce Public Procurement Act (PPA) in a bid to rein in donors and the government itself. The Act seems to be ‘a self-correction and control mechanism’ for the government and the donors relating to monetary deals.

A source at the ministry of finance (MoF), said that the Act will explicitly work to make government procurement system transparent and credible. “Not only that, every donor agency has to follow PPA guidelines for consultancy service or in tendering process to make it more transparent,” added the source. PPA demands effective governance and transparent mechanism.

The PPA is all set to be discussed in the parliament soon. The Act is also in line with World Bank’s suggestions for effective ‘donors harmonisation’. The issue of donors’ harmonisation often emerges in the meeting between the government and donors. After the approval of the parliament, the government will establish a separate Public Procurement and Monitoring Office (PPMO) under the prime minister’s office wherein secretary level position will be created to oversee the day-to-day affairs and facilitate the procurement system. A total of about 20 government staff will be transferred to PPMO and there will be a committee headed by former judge or former finance secretary, informed the MoF officials on condition of anonymity.

Meanwhile, the Act has recently been passed by the cabinet. An emergency fund wiil be used to establish PPMO, according to MoF officials. The major objective of the Act is to break the ‘monopoly’ in procurement business. Despite financial regulations to guide the procurement system, there was no uniformity between the government-owned institutions and other donors agencies.

Currently, the World Bank, the government, Asian Development Bank and other donor agencies have their own procurement system. Of the total budget expenses of the government, 80 per cent goes on procurement.

In the case of tendering process, after the PPA enforcement, every bidding process will be transparent. “Whether one has bagged the bid or not, every document has to be transparent, according to the proposed PPA.

“The bidders even can go to the court or demand public hearing about the tendering process if he is not satisfied.” After the Act comes into being, there will not be the classification of contractors as well, ministry officials added.

The PPA, an umbrella Act, will be implemented in government offices, corporations, government-owned banks and commissions.

Similarly, donors will also have to follow the similar procedure. The donors have been asking for the PPA since long.

After the Act, no government ministers or any officials will have authority to change the Act. MoF officials said, “after PPA comes into force, country’s expenditure management would be further streamlined and cartelling could be controlled.”