The pro­cure­ment process tends to be the Achilles heel of many gov­ern­ments in de­vel­op­ing coun­tries, so said Dr Vaalmik­ki Ar­joon, UWI Fi­nan­cial Econ­o­mist and Di­rec­tor of the Ch­agua­nas Cham­ber of In­dus­try and Com­merce (CCIC).

Dr Ar­joon was speak­ing at the CCIC launch of its web se­ries Con­ver­sa­tions with the Cham­ber on Fri­day at the cham­ber’s head of­fice at Cum­ber­batch Street.

Ar­joon said es­tab­lish­ing high lev­els of pro­cure­ment stan­dards can be sig­nif­i­cant­ly ben­e­fi­cial from a fis­cal stand­point. He said high stan­dards al­low for a greater lev­el of trans­paren­cy, less wastage of pub­lic funds, faster com­ple­tion of Gov­ern­ment projects and val­ue for mon­ey for the tax­pay­ers.

He said cap­i­tal ex­pen­di­ture projects such as road­ways and build­ing in­fra­struc­ture are award­ed by way of gov­ern­ment con­tracts. How­ev­er, he said these projects may not al­ways go to the best con­trac­tor be­cause of po­lit­i­cal rea­sons.

“Giv­en the low lev­els of trans­paren­cy brought about by poor pro­cure­ment what tends to hap­pen tra­di­tion­al­ly, not just in T&T, this hap­pens in many coun­tries, there are many in­stances where there are what we call an in­ef­fi­cient al­lo­ca­tion of these con­tracts, where­by the en­ti­ties that are al­lo­cat­ed these con­tracts may not al­ways be the most de­serv­ing en­ti­ties for these con­tracts. They may be less pro­duc­tive; they may have over­bid on the con­tract and have won the con­tract so the State ends up pay­ing much more than the true val­ue of the project. In ad­di­tion to that, they may prob­a­bly take for­ev­er to com­plete this project. It may be many years past its due date and all the while they may have been award­ed the con­tract, not due to eco­nom­ic prac­ti­cal­i­ty, but due to po­lit­i­cal favouritism when in fact there may be oth­er con­trac­tors bid­ding who may be able to de­liv­er on time and at a low­er cost,” Ar­joon said.

He added over­pay­ment and un­pro­duc­tive con­trac­tors can lead to cost over­runs lead­ing to more pub­lic spend­ing. He said the tax­pay­ers would have to pay all the ex­tra mon­ey when glitch­es hap­pen.

Ac­cord­ing to Ar­joon, de­layed projects stall the ben­e­fits that the pub­lic and the gov­ern­ment can en­joy. He cit­ed de­lays in the con­struc­tion of road­ways as an ex­am­ple.

He said, “If com­plet­ed on time, with­in a fair­ly short space of time, this would have the added ben­e­fit of con­nect­ing busi­ness from one part of the coun­try to the next, work­ers get to work faster and are more pro­duc­tive. Once there is bet­ter in­fra­struc­ture, busi­ness­es can have their goods de­liv­ered on time and can get their de­liv­er­ies out on time.”

Ar­joon said de­lays in the con­struc­tion of in­dus­tri­al parks that take years to get off the ground equate to a de­lay in the col­lec­tion of rev­enues by the State and the cre­ation of jobs.

Richie Sookhai, the pres­i­dent of the CCIC, said the cham­ber plans to con­tin­ue to ed­u­cate the pub­lic, en­tre­pre­neurs and the busi­ness com­mu­ni­ty through a se­ries of month­ly pod­casts us­ing so­cial me­dia.