DHAKA: Copenhagen Consensus Center (CCC) president Dr. Bjorn Lomborg commented that online procurement in Bangladesh can save tens of billions of takas each year.
According to the CCC research, Bangladesh spends more than Tk 72,000-crore on public procurement each year.
“Imagine if government procurement could be done just one percent more efficiently. That would save billions of takas,” Lomborg said.
“Research from Bangladesh Priorities shows that online procurement can save tens of billions of takas each year that could pay for other much-needed projects and services,” the added.
In collaboration with BRAC, CCC appointed a wide range of the economists from Bangladesh, the region, and the world to estimate the costs and benefits for 78 Bangladeshi projects.
Later, the CCC released the research paper identifying the smartest ways to make government procurement more efficient, says a press.
BRAC Institute of Governance and Development’s research fellow Wahid Abdullah showed that electronic government procurement (e-GP) would bring results worth Tk 663 for each taka spent on such efforts.
He was examining the effects of transforming the current procurement system into one that uses online systems.
He said online bidding process provides chances to bidders from any corner of the country to participate and the competition brings significant savings for the government that can be channeled into other efforts.
Companies and contractors that want to provide goods and services to the government apply for a tender in-person, showing up at a government office to physically file forms.
Sometimes, contractors who have political connections are best placed to win bids, or even to block other contractors who could offer better prices.
Besides, winning bidders subcontract the work out to other firms, taking their own cut along the way and pushing costs higher and higher which means higher cost to taxpayers and donors.
An ongoing project started in 2008 aims to reform public procurement. By 2011, four Bangladeshi agencies had implemented e-GP, representing about 10 percent of all public procurement.
The research analyzes data from the Local Government Engineering Department (LGED), which implemented e-GP in 2011. LGED first introduced e-GP as a very small pilot in 2012.
As more and more users adopted e-GP, prices went down to 11.9 percent lower.
The effects of expanding e-GP across most of the other 90 percent of government procurement are expected to be humongous.
The majority of costs of e-GP go toward purchasing computers and software, costing Tk 98.58 crore. It will also require training staff to handle e-GP nationwide, as well as paying for operations and maintenance. The total value of these costs spread across the indefinite future equals Tk 144-crore.
The benefits would be huge. Expanding e-GP would bring savings of an estimated Tk 5,274-crore per year. Across the entire future, e-GP would give total benefits of Tk 95,677-crore.
So in all, each taka spent to expand e-GP would yield at least 663 takas in benefits.
In May, a group of eminent Bangladeshi and global economists, including Nobel laureate Finn Kydland, will look at all of the research and identify the top priority investments for Bangladesh.
BDST: 1324 HRS, APR 20, 2016
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