Imbert stands by govt-to-govt terms for procurement

Finance Minister Colm Imbert on Thursday submitted the procurement regulations and changes to the Public Procurement Act to Cabinet for approval since receiving them on September 2, last year. It will be on the Parliament's agenda next month, and hopefully by March, will be enacted into law.

Attempting to clarify a Newsday report that noted the length of time the regulations had been with the minister, Imbert said his ministry was up until December in communication with the Office of the Procurement Regulator (OPR) regarding clarification on the regulator’s position on two sections of the act, Section 7, which deals with public-private partnerships (PPP) and government-to-government arrangements, and Section 13, which deals with selling state property.

Imbert provided the media with a letter from the OPR to him as minister, dated December 18, which was in turn a response to a request for information from the ministry’s permanent secretary dated December 17. The letter noted that the OPR’s position on Section 7 had not changed since prior correspondence on September 16 and November 19. It had also maintained its stance on Section 13 that in its role as regulator it should not be responsible for the disposal (sale) of any state asset. Imbert said the act will be amended to reflect the OPR’s request on Section 13.

Section 7 maintains that if the act conflicts with any obligation of the State through a treaty, an agreement with a financial institution or a government-to-government arrangement, “the requirements of the treaty or agreement shall prevail except that the procurement of goods, works or services shall be governed by this act...”

If this part of the act is enforced, Imbert said, government-to-government arrangements – like the type currently engaged with China for the Phoenix Park Industrial Park and with Austria for the Point Fortin Hospital – could not happen. These agreements bring to TT three key benefits: concessional financing, technology sharing and foreign direct investment (FDI), he added.

A guarantee of the FDI/concessional loan condition regarding Phoenix Park is that the contractor must be Chinese, he said. “If this law was in effect we could not have a Chinese contractor because you would have to have open tendering in TT for infrastructure work. The government of China would not agree to that so we would not benefit from the concessional loan or the FDI.”

The government then, intends to amend Section 7.

“What we intend to do is make a slight amendment to this clause so that if the TT government enters into an arrangement with another government for the supplies of goods and services and there’s a conflict between their procurement rules and our procurement rules, then the procurement rules of the other sovereign state will apply. That’s the only change we intend to make the other elements will still be there,” he said.

The regulator can still investigate government-to-government arrangements, he added. "It’s just a question of what procurement rules will apply. The rules drafted by the regulator are heavily slanted towards open tendering … for virtually everything. That can’t work in a government-to-government arrangement giving concessional facilities, tech transfer and FDI and in return telling you they want to select the contractor.”

Asked if this was a disadvantage to the local construction sector, Imbert said that has always been a complaint and will always happen. “The whole point is if a government is giving financing they want their contractor and the local sector isn’t involved.” There is a local content arrangement, however, he said, where 50 to 60 per cent of suppliers must be local.