ACC recommends dissolution of law bypassing bidding process for SOE's
ACC suggests amending article 10.27 of Public Finance Regulation
Members of Anti-Corruption Commission with the President Ibrahim Mohamed Solih
The Anti Corruption Commission of Maldives (ACC) has made the recommendation to amend an article to the Public Finance Regulation (PFR) which allows the state to contract mega‐projects to state-owned enterprises or companies with a state share, without any form of bidding or tendering process.
According to a report prepared by the ACC, Articles 10.27(a) and 10.27(b) states that the state is allowed to award projects to companies that have a state share without opening for tender. They report that, in the past, the state has assigned projects to companies under this article without any consideration of whether the project fits into the company's mandates. Hence, when these companies are unable to complete the project, subcontract the project to a third party without a bidding process once again.
ACC further explained that this procedure was usually followed to bypass procurement regulations and with the objective of providing undue profit or gain for a third party. These companies don't have the resources to complete the project and, in turn, subcontract the project to a third party without a bidding process at a cost lower than the original.
ACC asserted that, as a result, the cost of the project increases in comparison to a project that is awarded via a competitive bidding process.
Therefore, in order to promote transparency and fairness, ACC suggests amendments to article.10.27 of the Public Finance Regulation, to allow a fair bidding process to prevent corruption.
Furthermore, in the circumstance where the project is prepared by the state in advance, sponsored by the state budget and cannot be put up for public bidding, ACC encourages including a revision to the Public Finance Regulation (PFR) that allows awarding these projects to companies where 100% of shares are owned by the government. Nonetheless, this should only be allowed after ensuring that the company has the capacity to undertake the project and that the project falls under the company's mandates, suggests ACC. Nevertheless, the transaction must be a transparent and fair process.
Additionally, ACC recommends that 100% state-owned companies that are awarded projects should not subcontract to any other company.
