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Cut the red tape! Government and Opposition agree on need to change procurement rules

Published:Sunday | October 19, 2014 | 12:00 AM
Dr. Horace Chang
Dr Omar Davies

Daraine Luton, Senior Staff Reporter

A senior Government minister last week argued that the direct engagement of an entity for major strategic projects should not be viewed as the facilitation of corruption, but a way to secure investment and boost economic activities.

According to Dr Omar Davies, who had locked horns with former contractor general Greg Christie on the matter of a concession agreement with China Harbour Engineering Company (CHEC) to get the tractors rolling on the North- South Link of Highway 2000, the time has come to move away from the current procurement system.


"One of the things I would like us to work on in order to preclude the notion that shortening the process or making direct negotiations does not imply corruption, is to work with the Opposition in terms of the procurement policy, which allows that flexibility," said Davies in Parliament last week.

His comment followed a suggestion from his opposition counterpart, Dr Horace Chang, for bipartisan consideration to be given to the matter.

"As a small country with an underdeveloped economy seeking large investments, we ought to use this opportunity to take a second look at how we do these large projects," argued Chang.

The opposition MP was reacting to a statement made by Davies on the divestment of the Kingston Container Terminal (KCT). The minister disclosed that while three entities had been shortlisted for the grant of a long-term concession, only ones put in a bid.

Plans for the divestment of the KCT were originally floated in 2009 by then Prime Minister Bruce Golding. In January 2013, an enterprise team, chaired by former central bank, governor Derick Latibeaudiere, was established to conduct due diligence to develop the details of the transaction structure. A confidential information memorandum was issued in January 2014, and a request for proposal, pre-qualified three entities - DP World, PSA, and Terminal Link - for the concession agreement.

However, at the close of the bidding period in July, only Terminal Link, a consortium owned by CMA, CGM, and China Merchant Marine submitted a bid. PSA and DP World declined to submit tenders due in part to their concerns about the implications for the viability of the KCT given the proposed development at Goat Island.

Disappointed that delay, due to the procurement process, has been having a negative impact on the privatisation, Chang said it raised the question of "how we divest, or seek to develop, large projects".

"I am concerned that this thing has been spoken about so long, and even at this time, it has taken us nine months to get to this point where we have one bidder who is not quite satisfactory," Chang said.

He pointed to suggestions made in Parliament about changing the way strategic investment projects were dealt with.

Attorney General Patrick Atkinson has told Parliament that the Government is considering amendments to relevant laws that would create a framework to define and treat with "strategic and or urgent national investment opportunities".

"This amendment will not preclude the contractor general from doing a complete review of the process when it is completed, and it will not compromise the contractor general's ability to take appropriate actions if a breach is detected," Atkinson said.