Lack of project bidding process opens door to corruption
State funded development projects that do not put jobs out for tender through a bidding process are among the main sources of corruption in Laos, the Party and Government Inspection Authority revealed on Monday.
The typical scenario is for the authorities to choose a private company to invest up front in an infrastructure project, such as road building, electricity network expansion or irrigation. The authorities then repay the company within a five-year period after the work has been completed.
Vice President of the Party and Government Inspection Authority, Mr Thongsy Ounlasy, told Vientiane Times yesterday that no bidding process was undertaken in many of these projects. This meant that the company contracted to carry out the work raised the cost to an unreasonable level.
This mode of operation lacks transparency and is a waste of government money, as well as creating loopholes for corrupt officials.
Mr Thongsy warned that the custom of not putting jobs up for tender must stop, despite the country's great need for rapid development. Changes must be made to ensure that the government's budget is used in an effective and efficient manner.
Deputy Minister of Energy and Mines Mr Somboun Rasasombath addressed the issue during a recent inspection meeting in Vientiane. The Lao Development newspaper quoted him as saying that the authorities allowed the private sector to play a major role in infrastructure development because the government had limited funding available.
He said some contractors priced their work fairly but others quoted costs that were far removed from reality. He admitted that there were many forms of corruption in Laos due to the abuse of power by some officials for their personal gain.
Some projects, notably new buildings, have failed to meet expectations in terms of quality and have begun deteriorating soon after construction.
Under the State Investment Law, all state funded projects must involve a bidding process and the details published in the media for reasons of transparency. However, many projects have failed to follow this procedure.
According to the Party and Government Inspection Authority, corruption is highly undesirable and hinders the development of individual nations and the global economy.
Corruption damages governments, the regulatory structure, and societal behaviour. The legal authority of ministries is diminished, economic growth is slowed, poverty eradication is negatively affected, and disputes arise, many involving trade.
According to the United Nations, the cost of corruption is measured not just in the billions of dollars of squandered or stolen government resources, but most poignantly in the absence of the hospitals, schools, clean water, roads and bridges that might have been built with that money and would have certainly changed the fortunes of families and communities.
Corruption destroys opportunities and creates rampant inequalities. It undermines human rights and good governance, stifles economic growth and distorts markets.
