The Edition


ACC again lodges request to annul govt procurement regulations

Mariyam Malsa
23 September 2020, MVT 17:06
Members of the Anti Corruption Commission (ACC) at a press briefing. The corruption watchdog has submitted a request to annul Article 10:27 of the Public Finance Act. PHOTO: MIHAARU
Mariyam Malsa
23 September 2020, MVT 17:06

The Anti-Corruption Commission (ACC), on Tuesday, resubmitted a request to annul Article 10:27 of the Public Finance Act, which allows large-scale projects to be contracted without a bidding process.

According to ACC spokesperson Hassan Manik, the request lodged with the Ministry of Finance asserted the corruption watchdog's view that the current iteration of the regulation increased the risk of corruption, failed to support competitive bidding practices, and reduced transparency.

He also noted that the decision to resubmit the request was finalised in connection to concerns that arose during the course of ACC's ongoing investigations.

Although the terms of the regulation initially precluded third parties contracted by the government from deriving illicit enrichment, the article was amended on May 28, 2015, during the administration of former President Abdulla Yameen Abdul Gayoom.

As per the amendment, major government projects can be contracted without conducting a bid or submission to the tender evaluation board, provided that the companies are approved by the Ministerial Cabinet's council on economic affairs.

Notable projects finalized during Yameen's tenure following the amendment include the 25-storey Dharumavantha Hospital, which was awarded to Chung Hwa of Singapore for a staggering MVR 2.1 billion, as well as the leasing of Nasandhura Palace Hotel to NPH Investment Pvt Ltd for a 50-year period.

The corruption watchdog initially moved against the regulation in 2019, after investigations launched concerning corruption allegations involving state-owned institutions confirmed that Article 10.27 had enabled the illicit transfer of millions of Maldivian Rufiyaa.

Situation prior to 2015 amendment

Before Article 10:27 of the Public Finance Act was amended in 2015, any project valued above MVR 35,000 could only be awarded following a publicly announced bidding process.

Under the terms of these regulations, projects were only awarded to companies offering the most cost-effective price for the government, following the evaluation of bids submitted.

Therefore, previous procurement guidelines served as a barrier against any influential officials seeking to conduct actions of illicit enrichment.

Points raised in ACC's 2019 request

In 2019, ACC submitted a request to annul Article 10:27 of the Public Finance Act to the President's Office and the Ministry of Finance, along with the results of an assessment which was carried out to judge the extent to which the regulation enabled corrupt practices.

According to the commission's assessment, the regulation contradicted international anti-corruption guidelines as well as the basis of the Public Finance Act, in addition to increasing the cost of projects, reducing transparency, and failing to support competitive practices.

The corruption watchdog also highlighted certain instances in which projects were awarded without ascertaining whether the contracted type of work was included under a company's portfolio, necessitating authorities to contract another company.

Furthermore, ACC outlined recommendations regarding procurement regulations, including the suggestion to introduce a provision stipulating that large-scale projects could only be awarded to 100 percent state-owned companies in the event that a bidding process cannot be completed.

The incumbent administration was elected with a zero-tolerance policy towards corruption as well as promises to thoroughly investigate such actions.