Bid-rigging harms economy � minister
Isaac Pinielo | Wednesday July 27, 2016 18:00
He noted that every year the Competition Authority (CA) reports a growing number of bid-rigging cases, adding that since the establishment of the authority in 2011, bid rigging cases account for approximately 40% of the restrictive business cases that the authority had handled.
“We are very much aware that tenders, particularly public tenders are one way in which we can promote fair and transparent trade. Most of the government budget is spent on public procurement of goods and services,” said Seretse.
He also indicated that in the current financial year alone, the government’s development budget stands at least P13.81 billion, noting that empirical evidence has shown that bid-rigging can increase the cost of goods and services by up to 20% or more. In addition, he said data has shown that the cost is around 35% to 55% for developing countries.
According to the minister, the victims of bid-rigging are customers and in public procurement where the customer is the government. He said the harm extends to the whole economy, as the high prices paid to unscrupulous bidders affect other developmental goals.
“The impact is particularly serious when it involves the provision of essential goods and services that affect the lives and well-being of citizens. In view of this background, it cannot be over-emphasised that the fight against bid-rigging is crucial for enhancing the economy of Botswana,” he said. Seretse pointed out that as a developing country, Botswana is a major consumer of goods and services and that they must be concerned about the trend where public money worth millions of pula is lost through a tapestry of collusive activities. Amongst a host of possible bid-rigging cases the authority has dealt with, the minister said, is a case where a government ministry floated a tender worth P110 million as part of primary schools and clinics feeding programme.
“The authority’s investigations revealed a bid-rigging arrangement between the winning companies which enabled them to outsmart their competitors through a market allocation scheme,” he said.
He called on the citizens to be vigilant to ensure that public procurement efficiently delivers the development projects and services that the people need.
“Public procurement officials should be aware of a number of signs of bid-rigging. Competition authorities can help procurement agencies to identify these signs at an early stage of the procurement process, increasing the effectiveness of competition law enforcement,” Seretse said.