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IDB Group Members

SEVENTH REGIONAL PUBLIC PROCUREMENT FORUM Tbilisi, Georgia, 16-19 May 2011 IDB’s Experience with Procurement in Central Asian Countries Sami Faruqi Division Manager Operations Policy & Project Procurement Islamic Development Bank. IDB Group Members. 2. Mission Statement.

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IDB Group Members

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  1. SEVENTH REGIONAL PUBLICPROCUREMENT FORUM Tbilisi, Georgia, 16-19 May 2011IDB’s Experience with Procurementin Central Asian CountriesSami FaruqiDivision ManagerOperations Policy & Project ProcurementIslamic Development Bank

  2. IDB Group Members 2

  3. Mission Statement • “We are committed to alleviating poverty, promoting human development, science & technology, and Islamic banking & finance, and enhancing cooperation among member countries, in collaboration with development partners”

  4. IDB: Six Priority Areas • Human Development • Agriculture Development and Food Security • Infrastructure Development • Intra-trade Among Member Countries • Private Sector Development • Research and Development in Islamic Economics, Banking and Finance

  5. Net Approved Financing of IDB Group(Since inception to December 2010)

  6. Cumulative Approvals by Sector

  7. Key Elements of New Strategy Results Oriented Scaled up A New IDB Group Leveraging Partnerships Focused Knowledge-Oriented Responsive to Clients

  8. Key Elements of IDB Group 2020 Vision A Vision for Comprehensive Human Development Integration of IDB MCs Economies Improving the Image of the Muslim World • Key Strategic Thrusts

  9. Membership & Characteristics of IDB Europe: 2 Asia: 26 Africa: 27 Latin America: 1 • A Unique Model of South-South Cooperation • All Member Countries can benefit form IDB Financing • Global MDB: Membership 56 Countries spreading over 4 continents • Membership Increased: 22 countries in 1975 → 56 countries in 2010

  10. Albania Azerbaijan Kazakhstan Kyrgyzstan Tajikistan Turkey Turkmenistan Uzbekistan IDB MEMBER COUNTRIES Islamic Development Bank

  11. Islamic Development Bank

  12. Capacity Challenges Institutional Challenges Governance Challenges Service Provider Challenges Procurement Process Islamic Development Bank

  13. Inadequate awareness of the practices of MDBs in terms of procurement Weak preparation of new projects and little attention paid to procurement aspects during this phase CAPACITY CHALLENGES Islamic Development Bank

  14. Difficulty of some implementing agencies to acknowledge precedence of the Bank’s procedures over national procedures Example: Country X “failed” to use Standard Evaluation Report for the selection of a consultant firm CAPACITY CHALLENGES (2) Islamic Development Bank

  15. Difficulties in recruiting qualified procurement specialists Salaries of Project Management Unit (including procurement) staff capped Wage differentials with local staff INSTITUTIONAL CHALLENGES Islamic Development Bank

  16. Insufficient authority at the level of the implementing agency Limited independence in making procurement related-decisions Replacement of staff not conducive to an efficient procurement process INSTITUTIONAL CHALLENGES (2) Islamic Development Bank

  17. Institutional set up for procurement related decisions complex and highly centralized Award decisions made through executive orders or decrees: difficult to challenge in case of difference of opinion INSTITUTIONAL CHALLENGES (3) Islamic Development Bank

  18. Two evaluation reports with conflicting recommendations received within an interval of one week Insistence to award contract to preferred bidder Bank declined to finance the contract GOVERNANCE CHALLENGES Islamic Development Bank

  19. Role of consultant: instrumental in procurement and project management Limited number of consultancy firms “Small” size of these firms and lack of experience with large scale projects SERVICE PROVIDER CHALLENGES Islamic Development Bank

  20. Fragmented industry, i.e. heavy reliance on so-called research & design institutes Hyper specialization in specific sectors Limited number of private sector firms Issue of eligibility & COI SERVICE PROVIDER CHALLENGES (2) Islamic Development Bank

  21. Little familiarity with international engineering design standards Limited knowledge of international procurement procedures SERVICE PROVIDER CHALLENGES (3) Islamic Development Bank

  22. Confidentiality of procurement/ evaluation process Example: Complaint received by the Bank before evaluation report Contract negotiations: bidder “requested” to reduce its bid amount to be within the allocated budget PROCUREMENT PROCESS Islamic Development Bank

  23. Contractors & Consultants directly “complain” to the Bank during contract implementation Bank is not party to the contract Interpretation of tax clauses in the contract; different between the Ministry of Finance and the Implementing Agencies PROCUREMENT PROCESS (2) Islamic Development Bank

  24. Low number of turnout for Bank’s financed contracts Bidders not having the required experience or capacity for awarded contracts Perfect recipe for contract failure PROCUREMENT PROCESS (3) Islamic Development Bank

  25. Bidding documents: mandatory associations with local contractors/firms Not the appropriate way of building capacity (use preferences/local participation) PROCUREMENT PROCESS (4) Islamic Development Bank

  26. Foreign partner for window dressing Actual work/services undertaken by the local partner Consequence: risks for contract delivery PROCUREMENT PROCESS (5) Islamic Development Bank

  27. Capacity: Project inception, country and regional workshops Familiarization visits to HQs Institutional: Stepped up high level dialogue with beneficiary countries Emphasis on competent and relevant PMU team BANK’S ACTIONS TO ADDRESS THESE CHALLENGES Islamic Development Bank

  28. Governance & Anti-Corruption Firm enforcement of procurement policies Group integrity policy approved Integrity Office, established (resources provision underway) Steps under way to join the Cross-Debarment Agreement by MDBs Harmonized anti-corruption clauses to be part of the revised GL and financing agreements BANK’S ACTIONS TO ADDRESS THESE CHALLENGES (2) Islamic Development Bank

  29. e – GP (System, Process, Tool) Specific policy needed to ensure its proper design and implementation Harmonize standards among pioneers Common platform to share knowledge, experiences and to discuss issues/problems Well designed Safeguards that are continuously updated are needed to ensure Procurement without Corruption BANK’S RECOMMENDATION Islamic Development Bank

  30. Thank You for your attention “Together We Build a Better Future”

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