Department of Public Finance – General Treasury
Third South Asia Region Public
Procurement Conference
Innovation for Sustainable Performance
November 1-3, 2015
Dhaka, Bangladesh
P AlgamaDirector General
Department of Public Finance, Ministry of Finance, Sri Lanka
Department of Public Finance – General Treasury
Sri Lanka Economy
Macro Economic Achievement - 20142005 2014
GDP at Market Prices (Rs. Bn.) 2,453 9,785
Per Capita GDP at Market Prices (US$) 1,241 3,625
Inflation - CCPI (%) (Annual Average) 11.0 3.3
Unemployment (%) 7.7 4.3
GDP (Percentage change) 6.2 7.4
Share of GDP (%)
Agriculture 12.5 10.1
Industry 28.1 32.3
Services 59.4 57.6
Government Finance
Total Revenue (Rs. Bn) 380 1,195
Total Expenditure and Lending (Rs. Bn) 592 1,796
Budget Deficit / GDP % -7.0 -6.0
Social Development 2005 2014
Growth of Population 1 0.9
Life Expectancy at Birth 68 74.3
Infant Mortality (Per 1,000 Live Births) 11 9.9
Maternal Mortality (Per 100,000 Live Births) 12 22.0
Literacy Rate Average (%) 91 92.5
Electricity to Households (%) 77 98.0
Pipe - borne Water (% of Population) 30 44.3
Department of Public Finance – General Treasury
DEPARTMENT OF PUBLIC FINANCE
Focus;
Government Financial Regulations
Government Procurement Policies, Practices and
Guidelines
Government Asset Management Policies and Guidelines
Departmental Fees and Charges
Fund Management
Purpose;
For effective and efficient utilization of public financial
resources.
Promote good governance and assist the parliament
committees on Public Accounts.
DPF provides a range of regulatory and advisory services to
ensure better public financial management in the country
Department of Public Finance – General Treasury
Government Procurement Strategy
Government Procurement Strategy is to create
necessary framework for the procurement of goods,
works, consultancy services and other services to
ensure value for money, open and effective
competition, ethics and fair dealing, transparency and
accountability in Public Procurement.
Department of Public Finance – General Treasury
Key Functions of the DPF on
Procurement Management
Department of Public Finance (DPF) is the principal
authority for;
Develop, Implement and Review policies in procurement
of goods, works and services
Issuance of Procurement Guidelines, Manuals &
Standard Bidding Documents
Advise the Procuring Entities (Ministries / Departments)
on procurement activities
Simplification of Review and Approval Process of
procurement
Department of Public Finance – General Treasury
Key Functions of the DPF on
Procurement Management Contd..
Review Procurement Procedures & Procurement Plans of
all Government Institutions
Monitor quality and progress of procurements
Appoint Procurement and Technical/Project Evaluation
Committees for procurements of higher values – (SCAPC,
CAPC, CANC, CACPC)
Formulate accreditation system on selection of members
for Procurement and Technical Committees
Conduct capacity building programs on Procurement
Issue clarification of the provisions of these Guidelines or
these documents
Department of Public Finance – General Treasury
Principles govern Public Procurement
Value for money
Value for money is a key consideration for public procurement.Quantitative factors are tested by comparing the outputs and costsof proposals against a neutral benchmark.
Public Interest
Procuring decisions need to safeguard the public interest; andprotect the public interest right throughout the process in allprocurements ensuring that the procurement process is structured toensure that the project continues to be in the public interest.
Output Oriented
Projects should focus on the specification of what services are to bedelivered rather than how they should be delivered in order tomaximize the opportunity for innovation. Performance measuresshould be established to ensure that the required services aredelivered in accordance with the output specification.
Department of Public Finance – General Treasury
Principles govern Public Procurement Contd..
Transparency
The procurement process ensure that the availability of information
on the use of government resources to Parliament, taxpayers and
other stakeholders. The need to disclosure of the processes and
outcomes is emphasized.
Accountability
Officials involved in Procurement process should be accountable for
the people, parliament, donors and civil society and other
stakeholders. The procurement transactions are recorded and
published all the data in relation to particular procurement.
Engaging the market
Procurement entities should encourage all suppliers to participate
in public procurement and should always engage in marketplace,
suppliers and other stakeholders.
Department of Public Finance – General Treasury
Principles govern Public Procurement Contd..
Confidentiality
Parties associated with Procurement Actions, namely, suppliers/
contractors and officials shall ensure that they maintain strict
confidentiality throughout the process.
Free of Corruption
The officials involved in a Procurement Action shall not abuse their
powers. An official who abuses one’s position in a Procurement Action
to derive benefits for oneself or one’s close family or business
associates, would be deemed to be engaged in corrupt practices.
Department of Public Finance – General Treasury
Principles govern Public Procurement Contd..
Free of Conflict of Interest
Officials shall declare that they shall remain without a conflict of
interest throughout the process. Should such a compromising
situation arise, the official shall declare his/her interest and
disassociate himself/herself from the process.
No gifts or inducement to be accepted
Officials shall refrain from receiving any personal gain from any
Procurement Action. No gifts or inducement shall be accepted.
Suppliers/contractors are liable to be disqualified from the bidding
process if found offering any gift or inducement which may have an
effect of influencing a decision or impairing the objectivity of an
official
Department of Public Finance – General Treasury
Significance of Public Procurement in
Sri Lanka Economy
Public procurement remains a significant part of the Sri Lanka
economy, accounting for about Rs. 616bn or 24% of total
government spending and 6.3% of GDP disbursed through public
procurement process.
346 Procurement Committees were appointed for 43 government
agencies in 2014.
Government can reap benefits from improved management of their
public procurement systems.
More focused approach on Public Procurement Management within
this large internal market, greater value can be achieved in national
budgets while developing local industry.
Department of Public Finance – General Treasury
Governing Policy
Government Procurement Guidelines
Government Procurement Guidelines – 2006 (Goods &
Works)
Guidelines on Government Tender Procedure – Part II
Private Sector Infrastructure Projects (BOO / BOT / BOOT
Projects)
Guidelines on Selection and Employment of Consultants
Guidelines for Procurement of Pharmaceuticals and
Medical Devices
Department of Public Finance – General Treasury
Objectives of the Government
Procurement GuidelinesThe Procurement process should ensure;
a) maximizing economy, timeliness and quality in Procurement resulting in least cost together with the high quality;
b) adhering to prescribed standards, specifications, rules, regulations and good governance;
c) providing fair, equal and maximum opportunity for eligible interested parties to participate in Procurement;
d) expeditious execution of Works and delivery of Goods and Services;
e) compliance with local laws and regulations and international obligations;
f) ensuring transparency and consistency in the evaluation and selection procedure; and
g) retaining confidentiality of information provided by bidders
Department of Public Finance – General Treasury
Types of Procurement Committees
SCAPC - Standing Cabinet Appointed Procurement Committee
CAPC - Cabinet Appointed Procurement Committee
CACPC - Cabinet Appointed Consultancy Procurement Committee
CANC - Cabinet Appointed Negotiating Committee
MPC - Ministry Procurement Committee
DPC - Department Procurement Committee
RPC - Regional Procurement Committee
PPC - Project Procurement Committee
TEC - Technical Evaluation Committee (to assist PC)
PC - Project Committee (to assist CANC)
Department of Public Finance – General Treasury
Approving Authorities
RPC Head of the Department
PPC Chief Accounting Officer
DPC Accounting Officer
MPC Chief Accounting Officer
CAPC Cabinet of Ministers
Department of Public Finance – General Treasury
Standard Bidding Documents
Expedite procurement process
Commonly used (share knowledge)
Tested documents (less trouble)
Benefits of standardization (comfortable living)
ICTAD/SBD/01 – Works - Medium contacts
ICTAD/SBD/02 – Works - Major contacts
ICTAD/SBD/03 – Works - Minor contacts
ICTAD/SBD/04 – Design & Build contacts
Department of Public Finance – General Treasury
Procurement Planning
In order to draw market early attention to potential
procurement opportunities, each agency must publish
each year on respective websites an Annual
Procurement Plan and update regularly during the
financial year. (PF Circular no 1/2014)
This Annual Procurement Plan help facilitate public
procurement planning and resource management and
private sector also to get ready with supply and work
contracts of the government in the medium term
Department of Public Finance – General Treasury
Master Procurement Plan
Mandatory requirements for both foreign funded projects and GOSL funded projects for better budgeting.
Procurement Plan specifies actions to be taken to reach a defined goals, resource requirements, appropriate procurement methods, prior review requirements of funding agencies, sequence of a staged procurement process.
Procurement Plan should be prepared once the funding arrangements are finalized. (Before the commencement of financial year)
Department of Public Finance – General Treasury
National Procurement Commission
(NPC)
Parliament has approved 19th Amendment to the Constitution
which created NPC with regulatory responsibility on
procurement.
Required legal provisions and practices will be provided by
way of parliament act.
NPC will issue revised current procurement system, rules and
guidelines.
It is proposed to include e-GP in the draft GPGL-2015
As a dedicated authority it provides suppliers and vendors
with greater assurance and confidence in public procurement
through that would help enhance the confidence of vendors
and suppliers in participating in public procurement.
Department of Public Finance – General Treasury
Proposed Central Procurement Authority to
deal with common goods and services
Buyer survey/Supplier Survey/interviews to gather
information. Likely suppliers for similar products
SMEs to Large scale enterprises
Market Readiness Review (capability and track records)
FAs for Products which takes a longer time for evaluation
(Pharmaceuticals)
Relevant Legislations and policy need to incorporate in the
procurement process.
FAs for Open competition, restricted, negotiated, sole
suppliers
Bidding documents should broad enough to allow some
flexibility for FA.
Department of Public Finance – General Treasury
Proposed Central Procurement Authority to
deal with common goods and services Contd..
Benchmarking Value for Money offered by partnering-FAs and
Call offs.
Act on behalf of other public sector organisations in the role of
Central purchasing body.
Government agencies can access to the catalogues display
on computers provided by Suppliers.
Vendors are ready to deliver the goods directly to the buyers
and buyer pay directly to vendor.
For effective implementation of FA e-GP is essential.
Opportunity to select single/multiple vendors on agreed terms
and conditions in FA
Department of Public Finance – General Treasury
Advantages of procuring common goods
and services through Central Procurement
Agency• Call tenders for WOG needs and awarded to single/multiple
vendors.
• Fair Price and (standard) quality advantage.
• Economies of scale advantage
• Common terms and conditions for similar vendors
• Large volume of supplies was distributed among vendors
• Team of experts handle procurements for whole of Government
saving time and manpower
• Facilitate Special procurement like medical equipment, fuel,
pharmaceuticals, handled by respective government agencies.
• Used the service of Crown Agents.
Department of Public Finance – General Treasury
e-Procurement
Sri Lanka has not introduced a comprehensive e-Procurement
system yet.
Government is considering to introduce a commonly accepted
e-procurement system with necessary modifications for WOG
agencies to use.
USAID, WB and ADB has promised their support towards this
reform.
Currently PFD publishes Procurement Notices and EOIs of
procurements handled by leading government organisations
and planning to publish tender awards of major procurements
soon.
Department of Public Finance – General Treasury
Initiative for Sustainable Procurement
Environmental Impact Assessment (EIA) and
Environmental and Socio Economic Impact
Assessment (EEIA) assessment is a pre requisite
for Mega projects and constructions.
Draft policy encouraging green procurement and
echo labelling is being developed with the
assistance of United Nation’s Environment
Program
Department of Public Finance – General Treasury
Sri Lanka experience with PPP Projects
Under the BOI “Bureau of Infrastructure Investment” (BII) is
functioning as promoting, facilitating and coordinating agency for
servicing the line agencies under the supervision of Ministry of
Finance.
The final authority for selection and approval is with relevant line
Ministry and the Cabinet of Ministers.
Preliminary Screening:
Priority projects identified by the line ministries should submit
financial and technical viability reports prepared jointly by the Board
of Investment (BOI) and the line ministry to the Ministry of Finance.
Once the clearance from the Ministry of Finance is obtained, the line
ministry should present a Cabinet memorandum to Cabinet of
Ministers for approval.
All matters pertaining to BOO,BOT projects should be screened by
CANC assisted by a Project Committee. The approving authority
of these projects is the Cabinet of ministers.
Department of Public Finance – General Treasury
Sri Lanka experience with PPP Projects Contd..
Government of Sri Lanka has implemented a few projects successfully under the PPP method. They are;
Power Plant at Embilipitiya (100MW)-US $59mn
Power Plant at Horana (20MW)-US$14mn
Power Plant at Matar a(20MW)-US$15mn
Power Plant at Kelanitissa (163MW)-US$105mn
Asia Power -Power Plant (51MW)-US 31mn
Colombo Power Plant (60MW) US-50mn
Heladhanavi Puttalam (100MW)-US60mn
Small Hydro Power Plant (95MW)-US82MN
Colombo Port South Breakwater
Colombo South Container Terminal Development
Department of Public Finance – General Treasury
Colombo South Container Terminal
Development Government of Sri Lanka (GOSL) has launched the Colombo Port
Expansion Project (CPEP)”. to expansion of Port of Colombo to cater the
increasing demand of services in the international shipping industry. After
comprehensive studies the proposed development in South of Colombo
Port was identified as essential for economic development.
The proposed Colombo South Harbour is situated west to the existing port
of Colombo comprising an area of approximately 600 hectares. The
proposed harbor has 3 terminals each having 1,200m length and
facilities to accommodate 3 berths alongside
There are two phases of the project:
• Harbor Infrastructure works - Construction of Breakwaters, dredging
for new harbor basin and navigation channel and rerouting of crude oil
pipe line. This phase has been completed through open competitive
bidding process.
• Construction of Terminals and other related services. This Phase has
completed through PPP method.
Department of Public Finance – General Treasury
Colombo South Container Terminal
Development Contd..
After evaluation of the Request for Proposals (RFP), being the first
terminal of the Colombo South Harbor, namely South Container
Terminal has been assigned to M/s. Colombo International
Container Terminals Limited under BOT basis.
Developer: Colombo International Container Terminals Limited
(CICT)
Colombo International Container Terminals Ltd., (CICT) is a joint
venture Company between China Merchants Holdings
(International) Co., Ltd. (CMHI), a listed blue chip Company in
the Hong Kong stock exchange, and the Sri Lanka Ports
Authority (SLPA). It is developing the 2.4 million twenty foot equal
units (TEUs) capacity for Colombo South Container Terminal in the
Port of Colombo, under a 35 year build, operate, and transfer
(BOT) agreement with the SLPA.
Department of Public Finance – General Treasury
Colombo South Container Terminal
Development Contd..
The largest shareholder of this company is CMHI with 85%
ownership and the balance 15% being held by SLPA.
CICT commenced construction works of the terminal in December
2011. With an envisaged investment of US$ 500 million, including
the installation of the latest state of the art terminal equipment, it is
so far the single largest foreign direct investment in Sri Lanka
by a private entity.
The Port of Colombo with a current capacity of over 4.5 million TEUs
has embarked on a large infrastructure development programme to
increase the total capacity of the Port of Colombo by another 7.2
million TEUs in three separate phases.
Department of Public Finance – General Treasury
Colombo South Container Terminal
Development Contd..Effective Date : 1st December 2011
Term of BOT Agreement: : 35 Years
Project Features:-
Quay Length : 1,200 m
No. of Berths : 3 - 4 berths
Capacity : 2.5 M TEU
Depth : 18m
Terminal Equipment for each terminal - 12 Nos. Super Post-Panamax quayside cranes
40 Nos. RTGs.
Construction Details:-
Date of Commencement : 16th December 2011
Project Completion : Phase I (600m Quay Length) - December 2013
Phase II (Entire Terminal) : April 2014
Estimated Cost : US$ 500 million
Consultant : AECOM of Hong Kong
Civil Contractor : China Harbour Enginnering Company Ltd.
Department of Public Finance – General Treasury
Colombo South Container Terminal
Development Contd..
Department of Public Finance – General Treasury
Colombo South Container Terminal
Development Contd..
Department of Public Finance – General Treasury
Capacity Building on Public Procurement
PFD in partnership with “Miloda” Academy of Financial
Studies of Ministry of Finance on procurement training and
capacity development for public sector officials who involved
in public procurement.
PFD has conducted a series of training sessions for various
government organisations (defense sector and corporations
and statutory bodies).
New training program will be organised for senior public
sector officials in November 2015 at “Miloda” Academy.
Department of Public Finance – General Treasury
Accreditation system for officials
involved in Public Procurement
A data base is being developed at PFD for officials with a
wide range of disciplines appointed for Procurement and
Technical/Project Evaluation committees.
Qualifications, skills and experience are recognised in
nominating these officials for various committees with a
maximum number of committees they can serve at any given
time being 3.
Department of Public Finance – General Treasury
Procurement Monitoring
Procurement monitoring has not been
successful yet as a result of lack of timely
information and data.
A system is being developed to capture
these information by PFD
Increasing number of Agencies are
sending the information on timely basis
now
Department of Public Finance – General Treasury
Q & A
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