The government is in choppy waters

Feb 02, 2025 Features / Columnists, Peeping Tom

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Peeping Tom

Kaieteur News- The government stands like a beleaguered captain at the helm of a storm-tossed ship, finds itself once again navigating the choppy waters of public procurement. The winds of criticism are howling, and the waves of discontent are rising.

The issue, as it often is, is not merely about the allocation of contracts or the construction of roads and bridges. It is about the integrity of a system. If the government does not act swiftly to overhaul its public procurement systems, it risks not only squandering public funds but also becoming engulfed by the same criticisms that led the PPPC government to lose its majority in 2011 and then the seat of power in 2015.

The most glaring issue has been the proliferation of “overnight contractors.” These are not the seasoned builders of yore, men and women with calloused hands and a lifetime of experience in the trenches of construction. No, these are opportunists, springing up like mushrooms after a rain, forming firms with the speed of a magician’s trick and bidding for public works with the confidence of those who know their success lies not in their skill but in their connections. Many of them have no idea what they are bidding for, nor do they care. Their business model is simple: win the contract, subcontract the work, and pocket the difference. It is a shell game, and the public is the loser.

The consequences are manifold. First, there is the matter of cost. Public procurement contracts, already burdened by the weight of bureaucracy, are being inflated to absurd levels. The commercial class, with its fingers in every pie, is reaping the rewards, while the average citizen is left to wonder why a simple road repair costs more than a small fortune.

Second, there is the issue of quality. When contracts are awarded to firms with no experience or expertise, the result is shoddy workmanship, delays, and, in some cases, outright failure. The government insists that only a minor percentage of public projects remain incomplete, but this is cold comfort to those who have to traverse roads, cross bridges or wait an eternity for some incomplete pump station to be finished.

Then there is the matter of capacity. The resources—human and material—simply do not exist to support the volume of public works being undertaken. The strain on the limited pool of resources is palpable. Construction materials are in short supply, driving up costs. Labor is scarce, and what labor there is demands higher wages, pushing the system to the brink of crisis.

Delays are inevitable, and the quality of work suffers. The government, in its zeal to demonstrate progress, has overextended itself. It must scale back, prioritize, and ensure that the projects it does undertake are completed to the highest standard. Otherwise, we risk a situation where even the most basic infrastructure becomes unaffordable, and the poor are left unable to build so much as a chicken coop.

A particularly contentious issue is the payment of mobilization fees. The government argues that these fees are necessary to help small contractors get started, and there is some merit to this argument. For small projects, where access to resources may be limited, a modest advance can make a difference. But for large projects—those above $200 million—mobilization fees are not only unnecessary but also fraught with risk. Contractors bidding for such projects should have the financial wherewithal to mobilize on their own. What happens if the work hardly sets going and the contractor walks away with close to $200 million in mobilization advances? What recourse does the government have? Can it levy on mud and sand? The answer, of course, is no.

Perhaps it may claim that it can levy on the performance bonds. But that itself is another issue fraught with controversy. These performance  bonds are meant to serve as a guarantee, a promise that the work will be completed to the agreed standard. But are these bonds backed by real financial commitments, or are they merely paper promises, devoid of any collateral? If the latter is true—and there is reason to suspect it is—then the entire system is built on a foundation of sand.

The government therefore must tighten the rules governing public procurement, ensuring that contracts are awarded on the basis of merit, not connections. It must enforce stricter standards for performance bonds, ensuring that they are backed by real financial commitments. It must scale back the size of its public sector investment projects, focusing on quality rather than quantity. And it must eliminate the payment of mobilization fees for large projects, ensuring that contractors have the financial resources to complete the work they bid for.

If the government fails to do these things, it risks repeating the mistakes of the past. Corruption has always been the PPPC’s Achilles heel, and history has a way of repeating itself. The party lost its majority in 2011 and surrendered political office in 2015, in no small part due to allegations of corruption in public procurement. If it does not clean up its act, it may find itself staring down the barrel of the same problems once again.

(The government is in choppy waters)

(The views expressed in this article are those of the author and do not necessarily reflect the opinion of this newspaper.)

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• Peeping Tom, PPPC Government, public procurement systems, trenches of construction., winds of criticism

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