Thursday, June 21, 2018

Persistent lack of transparency in Gambia's public procurement system may affect donor response to the financing of the National Development Plan

The Gambia Port Expansion Contract with China Bridge and Road Corporation (CBRC) may pose the biggest threat yet to the Barrow administration's effort to transform the EURO 1.45 billion in pledges into actual commitments to finance the country's 3-year National Development Program (NDP) 2018 - 2021 following last month's successful Donors Pledging Conference in Brussels.

The persistent lack of transparency, and outright corrupt practises, that have plagued past government's procurement practices are once more rearing their ugly heads with the Ministry of Works and the Office of the Secretary General at the helm of what can only end up increasing donor skepticism.

At last May's GPA Board meeting, the decision was taken to engage the services of an international consulting engineering company to carry out the detail engineering design.  Even though the consultant completed the GPA's requirements on the present scope of works in the Engineering, Procurement and Construction (EPC) Agreement which were incorporated under advise of GAMWORKS and NIRAS Consulting Engineers of Denmark, CRBC rejected the observations.

Last June, a briefing session was convened by the Works Minister, Bai Lamin Jobe on the 4th June 2018 and attended by The Secretary General, Habib Drammeh,  GPA Board Chairman, Alpha Barry,  MD, GPA, Abdoulie Tambadou and Permanent Secretary of Works, Mariama Ndure-Njie to discuss how the EPC contract which is a component part of the China Ex-IM Bank-financed CBRC Port Development Project.

Some important aspects of the project are still outstanding because government, specifically the Ministry of Finance and GPA, the primary beneficiary of the loans, have not lend its full support.  These are : (a) The total loan sum of $177 million (b) provisions detailed in GPA requirements (c) value for money verification (d) Unit prices/rates to be provided while BOQ are confirmed after the detailed designs.

At their June 4th meeting, these critical aspects of the project raised by the consultants and rejected by CBRC were considered unnecessary by the Works Minister as these issues could be taken up later after the EPC has been signed as is.  In doing so, and while admitting of being unaware of the reasons CBRC's rejection of the observations by the consultant, he concluded that a competent Supervision Engineer, during the detail design, will ascertain that the unit rates and GPA's requirements comply with international standards as well as ensuring value for money.

Why would the government of Adama Barrow entrust such critical elements of the projects in the hands of a supervision engineer who, in all likelihood, will be a Chinese national, rather than continuing with more rounds of in-country meetings as proposed by the Permanent Secretary of the Ministry of Finance, Lamin Camara, requested that led him lament about the fact that deal is being rushed.  The GPA Board had scheduled a Board meeting for next Tuesday to discuss critical aspects of the project.

In an email correspondence obtained by us, the PS Finance said and we quote: "I MUST (emphasis his) say once again that the country is not in position to absorb such a loan facility as it will eventually take us to a very serious level of debt unsustainability and would eventually make us miss our programs with the Fund and the Bank (referencing the IMF and World Bank) and that may ultimately affect the gains we achieved  in the BARROW government." 

The Finance Permanent Secretary's email reveals that only 28% of the $177 million Chinese loan is concessional "which is way off from our program".  He further warned the Works Minister, Secretary General and the GPA Board Chairman and the MD that  the "loan facility comprises of one fifth of the whole public debt of the country so there is no way it can be financed given the current situation" hoping it will give pause to those insisting on proceeding without major issues being resolved at the national level.

The Works Minister's argument is that cabinet has decided and therefore they must proceed.  But was cabinet provided with all the facts laid out by the PS Finance.  Is the Finance Ministry so neutered that it can no longer lead the public finance debate as the final arbiter?

According to our sources, the Chairman of the Board of GPA wants government to proceed cautiously to ensure that the country gets value for money and not their intention to frustrate the decision of cabinet. In fact, a Chinese delegation had visited the GPA, accompanied by a Foreign Ministry official, and expressed their intention to reduce the scope of the China Ex-Im Bank financing so as to reduce the burden on government.  Even the Chinese recognize the burden of debt currently in the books to be unsustainable.

As we speak, a delegation comprising of the Minister of Works and the MD of GPA are to travel to Dakar to sign the agreement with CBRC on Friday June 22nd.  Why Dakar?  The loan is being contracted by the Government of the Gambia for Gambians as the beneficiaries and thus normal to have the loan signing ceremonies performed on Gambian soil.

We hope the Gambian authorities recognize that the decision to sign the agreement now, and in Dakar instead of Banjul, may cast doubt as to whether the Barrow government and his senior officials should be taken seriously when they commit themselves to a procurement process they claim to be open, fair and transparent.