Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Wednesday, March 27, 2019 05:17:08 AM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

Public procurement in the Belt and Road Initiative

Share your thought
Post a comment »
Read all () »

Tania Ghossein :
For all the attention the trillion-dollar Belt and Road Initiative receives, there is remarkably little reliable information about the procurement practices that are used to award BRI projects such as ports, roads and railways. When it comes to public procurement of BRI-related contracts, two questions arise. First, how does procurement work-who gets contracts and on what basis? Second, to what extent do the procurement practices applied in BRI projects align with international good practices and differ from ones used in national procurement tenders?
How Does BRI procurement work?
Overall, there is very little data on how BRI procurement works. However, as covered in a new working paper from the World Bank Group, the limited available evidence suggests that Chinese companies account for the majority of BRI-procurement. According to the Centre for Strategic and International Studies, more than 60% of Chinese-funded projects have been awarded to Chinese firms, compared to only 30% in BRI projects funded by non-Chinese financial institutions.
China is certainly not alone in the practice of awarding contracts to its own firms, but many countries have agreed that in the development finance context, this is not a good practice. This is reflected in the 2005 Paris Declaration on Aid Effectiveness, which calls on donor countries to move away from tying aid to sourcing goods and services from national firms. Instead, donors should rely on in-country resources and create a level playing field for all suppliers, regardless of their ownership or nationality.  A similar decision by China with regard to the BRI would provide greater assurance that BRI procurement awards go to the firms best placed to execute a project. Given the competitive strengths demonstrated by Chinese companies in procurement contests around the world, this may not in practice result in a major shift in the share of contracts going to Chinese firms. But, it would provide greater assurance that winning firms are in fact those that have put forward the strongest bids.
Is BRI procurement aligned with good practices?
The new World Bank Group research further shows that procurement practices used for BRI projects could be further aligned with procurement provisions that BRI countries have made in their preferential trade agreements (PTAs) and international standards embodied in the WTO's plurilateral Agreement on Government Procurement (GPA).
One example where procurement practices could be better aligned relates to transparency. The process used to select contractors for high-value projects in the China Pakistan Economic Corridor (CPEC) were not made public. Procurement was restricted to a limited number of Chinese contractors. We know that nominated contractors influenced the bidding process because bidding documents were changed after the fact by addenda. But, it impossible to evaluate the overall fairness of this process or to determine whether or not collusive practices occurred because it lacked transparency.
Moving towards international good practices can help host governments achieve best value for money in BRI projects. Such provisions would also increase the prospects that BRI projects are allocated to firms best placed to implement them and provide a mechanism to promote competition between firms interested in participating in procurement opportunities.
How to move forward
It would be of benefit to all parties participating in the BRI to have better information about the public procurement processes associated with BRI projects. Efforts to improve procurement practices in BRI projects can follow three tracks. One involves action by China. The other involves actions by hosts (BRI partner countries). The third has a multilateral dimension, using international agreements as a mechanism to apply a set of jointly agreed public procurement processes for BRI projects. Whether governments are willing to take action is for them to determine. Suggestions highlighted here are simply intended to sketch out possible paths that could be pursued.
Focusing on what China might do, the most straightforward path would be a unilateral decision that BRI projects financed by public Chinese entities would utilize international good practices on competition and transparency. Examples of such practices could be for China to require international competitive bidding (ICB) in the award of BRI projects above a certain value threshold; and for BRI host countries to demand that open, transparent competition be the basis for engagement in BRI projects. Another option would be for BRI projects above a threshold to be awarded through open national competition among Chinese companies, including foreign-invested enterprises.
Turning to the second path, borrowing countries can consider options to make BRI procurement processes more inclusive and competitive. They can seek to apply national procurement laws to BRI procurement, negotiate offsets or set local content targets for BRI projects for which they borrow.
The third option is to consider multilateral cooperation among BRI countries. Accession to the GPA is perhaps the most straightforward step that is available to China and its BRI partners. Since only one-third of BRI economies are GPA members, acceding to the GPA would also level the playing field in terms of participation in bidding for contracts, in part by offering foreign firms the opportunity to challenge BRI procurement processes that violate GPA provisions.  Further, the GPA provides a strong basis for transparency, embodies a set of rules that are generally regarded as constituting international good practice, and provides a platform for resolving disputes on procurement practices.
(Co-authors: Bernard Hoekman and Anirudh Shingal. From World Bank Blog).

Add Rate

News Archive

Inside The New Nation

Editorial »

Nation's supreme sacrifice for independence must not go in vain

THE nation is set to celebrate 49th Independence Day and National Day today. This year, the Independence Day has got special attention following the announcement of United Nations Under-Secretary General and Special Adviser on Prevention of Genocide Adama Dieng. The special envoy on Sunday said that UN will raise the ...

Cricket »

Brian Lara hopes to witness an India-Pakistan final in WC 2019

Former West Indies legend Brian Lara predicted India as favorites to claim the World Cup title.While the cricketing interactions between sub continental arch rivals hit an all-time low in barometer following never ending political disarray, Caribean living legend has foreseen a repeat of the 2017 ICC Champions' Trophy final where ...

International »

Venezuela crisis: Russian military planes land near Caracas

Two Russian military planes landed in Venezuela's main airport on Saturday, reportedly carrying dozens of troops and large amounts of equipment.The planes were sent to "fulfil technical military contracts", Russia's Sputnik news agency reported.Javier Mayorca, a Venezuelan journalist, wrote on Twitter that he saw about 100 troops and 35 tonnes ...

International »

New Zealand's Ardern orders top-level inquiry

New Zealand's Prime Minister Jacinda Ardern has ordered a top-level inquiry into the Christchurch mosque attacks that left 50 people dead.She said a royal commission would examine whether police and intelligence services could have done more to prevent the 15 March shootings.A royal commission is the highest level of independent ...

Entertainment »

I am a part of a film that will help people see beauty in different light: Deepika

Bollywood’s leading lady Deepika Padukone has time and again exhibited her thirst for challenging roles with her diverse choice of films. Giving testimony of the same yet again, Deepika will be seen slipping into the skin of an acid victim survivor for Chhapaak and is exhilarated to give to the ...

Cricket »

Rumana receives T20 Team of the Year cap from ICC

Bangladesh Women's team star Rumana Ahmed received the 2018 ICC T20 Team of the Year cap from the International Cricket Council (ICC) on Sunday, according to a message sent by Bangladesh Cricket Board (BCB).Rumana is the first Bangladesh player to have been selected in the ICC squad. The right-arm leg-spinner ...

International »

Maduro vows ‘deep’ change in Venezuela government amid pressure

AP, Venezuela :Venezuela President Nicolas Maduro vowed a major shake-up in his government, a sign he is feeling pressure from U.S. sanctions and an international outcry for him to resign."I will in the coming hours announce new government methods and a profound change in the entire government of Venezuela," Maduro ...

Football »

England, France win big, Portugal held as Euro defense opens

AP, London :Big and slick wins for France and England. Not even a goal for Portugal.Even with Cristiano Ronaldo returning to the Portugal side for the first time since last year's World Cup, the European champions could only begin their title defense with a 0-0 home draw against Ukraine.The goals ...

Sports »

Serena survives scare to advance in Miami

AFP, Miami :Serena Williams survived an "irresponsible" second set lapse on Friday to see off Sweden's Rebecca Peterson 6-3, 1-6, 6-1 in her second-round opener of the WTA and ATP Miami Open."I wasn't really happy with my performance," admitted the 23-time Grand Slam champion, who is playing in just her ...

Entertainment »

I was lucky that it wasn't a dance-off - Alia Bhatt

An Abhishek Varman directorial, Kalank starring Alia Bhatt, Madhuri Dixit, Varun Dhawan, Aditya Roy Kapur, Sonakshi Sinha, and Sanjay Dutt has been making headlines ever since its announcement. It was just yesterday when the makers of the film dropped in the first song, titled Gharore pardesiya, featuring Alia and Madhuri ...

International »

Pope replaces Santiago bishop after abuse cover-up claims

Reuters, Vatican City :Pope Francis has accepted the resignation of Cardinal Ricardo Ezzati, the archbishop of Santiago and the highest ranking member of the Catholic Church in Chile, who has been caught up in the country's sex abuse scandal.A Vatican statement on Saturday said the pope had named Bishop Celestino ...

International »

May makes final push for Brexit deal with new timetable

Prime Minister Theresa May returns to Britain on Friday vowing to make "every effort" to win over MPs opposed to her EU divorce deal, hours after securing a delay to Brexit from European leaders in Brussels.The embattled premier faces daunting odds to persuade recalcitrant British lawmakers to back a plan ...

City »

Gonoforum President Dr. Kamal Hossain speaking at a press conference organised by Gonoforum at the Jatiya Press Club on Saturday demanding safe road.

Editorial »

Modernise the railways and make it corruption-free

BANGLADESH Railway has been showing less importance and interest to recover its grabbed lands though thousands of acres of land are now illegally possessed by a section of influential people and some organisations. It has also no visible plan to use many unused lands across the country too. An initiative ...

Editorial »

Save Halda from dying

DEPARTMENT of Environment has revealed that waste from a housing estate and some factories are polluting the Halda river in Chattogram to the extent that it caused dying of fish. Currently, the pollution of the Halda is severely affecting the livelihood of adjacent people, in particular the fishermen. In June ...

Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Write a comment to this news