Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Wednesday, July 24, 2019 07:26:13 AM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

Public procurement in the Belt and Road Initiative

By
04th-Jan-2019       
Comments
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).

Tariff
Add Rate

News Archive

Inside The New Nation

City »

'Aparajeya Bangladesh' formed a human chain in front of the Jatiya Press Club on Tuesday demanding release of BNP Chief Begum Khaleda Zia.


Editorial »

Check mob beating


IN the last six months, 36 people were killed by mobs. In the last five days, eight, including two women, were killed and at least 30 others were injured. Shockingly, many of the victims were intellectually challenged. Mob attacks on people labelling victims "child kidnappers" continue unabated despite several directives ...

Sports »

Tokyo 2020 comes too early for karate kid's Olympic dream


AFP, Nagaoka :Sweat pours off Mahiro Takano as the 13-year-old karate black belt trades blows with a grown man almost twice her size, finishing with a blood-curdling roar, then a dainty bow.The petite schoolgirl is used to punching above her weight - since taking up karate in kindergarten she has ...

International »

Pope urges concrete measures to protect Syrian civilians


AP, Vatican City :Pope Francis has sent Syrian President Bashar Assad a letter expressing his "profound concern" for the humanitarian situation in Syria and in particular the plight of civilians in Idlib province.The Vatican said Cardinal Peter Turkson, one of Francis' top advisers, hand-delivered the letter to Assad during a ...

International »

Trump praises Pakistan's role in ‘progress’ on Afghan peace


President Donald Trump on Monday hailed Pakistan's help in advancing peace talks in Afghanistan, a marked shift in tone as the United States seeks an accord with the Taliban to end almost 18 years of war.Speaking from the Oval Office alongside Pakistan's Prime Minister Imran Khan, Trump also warned he ...

Business & Economy »

Abdul Aziz, Additional Managing Director of Shahjalal Islami Bank Ltd and Naimul Huda, General Manager of Finance & Accounts of Incepta Pharmaceuticals Ltd, exchanging an agreement signing document at bank's corporate office in the city on Tuesday. Bank's Managing Director M Shahidul Islam, Deputy Managing Directors M Akther Hossain, Mian Quamrul Hasan Chowdhury and Imtiaz U Ahmed, among others, were present. Under the deal, all employee of the company can open their bank account in the bank without keeping any initial deposit and will enjoy other Banking facilities.


Entertainment »

Jacqueline opens up about launching her Youtube channel


One of the most influential celebrities of Bollywood Jacqueline Fernandez who is not only a sought after name for her commercially successful films but is also is huge name in the brand circuit. Having recently crossed 30 million followers on instagram, owing to humongous fan following across quarters, Jacqueline Fernandez ...

Entertainment »

Sonia disappearing from media


Entertainment Report :Sonia Hossain once tried to establish her career in different platforms of media like modelling, acting and hosting. Bad temperament, high ambition and self announced talent made her unsuccessful media personality. As a result, her presence in media is not mentionable now. In fact, Sonia was absent from ...

Editorial »

Stand beside flood-hit people


DIFFERENT kinds of waterborne diseases have begun spreading as floodwater started receding across the country. But in the post-flood scenario, many people are suffering from diarrhoea, skin diseases, dysentery, cholera and other waterborne diseases. Officials of the Flood Forecasting and Warning Centre said the flood situation may continue improving in ...

Sports »

Lowry weathers storm to win British Open and first major


Ireland's Shane Lowry withstood howling wind and rain to win his first major at the British Open by six shots from Tommy Fleetwood on Sunday, describing the achievement as "an out-of-body experience".In desperately difficult conditions, Lowry's one-over par final round was still more than enough as he finished on 15-under ...

International »

UK leadership favourite Johnson hits more turmoil on last voting day


AFP :Britain's leadership contest entered its finale Monday with the favourite Boris Johnson facing more defections from ministers over his Brexit plan.The month-long contest between former London mayor Johnson and Foreign Secretary Jeremy Hunt is being decided by fewer than 200,000 grassroots members of the governing Conservative Party.The winner will ...

International »

Zelensky party heads for absolute majority in Ukraine


AFP :Ukraine's comedian-turned-president Volodymyr Zelensky is set to control an absolute majority in parliament, ushering in a generational shift in the ex-Soviet country's political arena.The 41-year-old became Ukraine's youngest ever post-Soviet leader when he took office two months ago and has promised to stamp out corruption and end a separatist ...

City »

Prime Minister Sheikh Hasina presenting National Fisheries Award to Mostofa Al Rajib, Upazila Fisheries Officer, Betagi , Barguna for the latter's contribution in Fisheries Sector at a ceremony held recently in the auditorium of Krishibid Institution, Bangladesh in the city on the occasion of National Fisheries Week.


Entertainment »

Mamo under Tauquir’s direction, Bipasha’s story


Sheikh Arif Bulbon :As an actress, in the beginning of her career, Zakia Bari Mamo got the National Film Award to act in Tauquir Ahmed-directed movie Daruchini Dwip. For this reason, Mamo always respects to Tauquir Ahmed. Now she is a matured actress who always wants to work in challenging ...

Editorial »

Taking law in own hand is an ominous sign


MOBS beat to death five people, including two women, and injured 10 others on suspicion of being child kidnappers across the country on Saturday. The incidents happened just a day after three people were beaten by a mob in Thakurgaon. Incidents of mob beating have increased even after the Bridges ...

 
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
Email:
Write a comment to this news