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By Darwin G. Amojelar, Reporter
THE World Bank estimated that the
government loses about P30 billion a year, or 20 percent to 30
percent of the total amount of every contract that Manila signs, as
a result of corruption or procurement inefficiency.
In a draft report presented to
the Philippine Development Forum last week, the Washington-based
lender said many of the Philippines’ most notorious corruption
cases over the last four decades have involved failures in
procurement.
“By one estimate, an average of
20 [percent] to 30 percent of [the value of] every contract is lost
to corruption or inefficiency—about P30 billion a year,” the
report said.
It added that the Government
Procurement Reform Act, enacted in January 2003, began to change
things, though.
The report noted that there is
only one omnibus procurement law, with uniform applicability to
national and local government units. Under this law, civil society
is involved in the bidding process, thus strengthening checks and
balances.
“The legislative and regulatory
framework receives high marks and is used by several donors for
procurement in the Philippines. However, actual procurement
operations still regularly fail to meet expectations,” the World
Bank report said.
The report also noted that
procurement implementation can be strengthened by expanding
involvement of civil society and the private sector in monitoring
procurement. It said such involvement will increase transparency and
reduce the risk of abuse.
According to the report, rules
and regulations for foreign-funded procurement and unsolicited bids
need to be reviewed.
“The scope for abuse will be
reduced through further harmonization of those rules as per the
Paris Declaration, and ensuring that those rules follow the same
basic principles of transparency and competition on which the
Philippine Law is based,” it said.
The report also recommended to
enforce procurement practices including severe penalties to deter
possible wrongdoers. “The law asks for blacklisting of firms and
firms can also be disbarred and criminal charges be brought against
them. However, these provisions are rarely used,” it said.
Also, the report added, improving
training and career development to foster a professional procurement
cadre is important.
The government earlier canceled a
$330-million national broadband contract amid allegations of bribery
linking senior government officials and President Arroyo’s
husband, Jose Miguel Arroyo. Rodolfo “Jun” Lozada Jr., a witness
to alleged brokering for kickbacks from the aborted contract, had
said the government’s SouthRail project was also overpriced by at
least 20 percent because of alleged graft.
The SouthRail project, with a
total cost of $932 million, was meant to rehabilitate the railways
from Manila to southern Bicol Region. The first phase involves a
423-kilometer stretch from Calamba, Laguna, to Legazpi City, Albay,
costing $627.8 million. Phase 2 is a new 135-kilometer railway line
from Legazpi City to Sorsogon costing $304.2 million.
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