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Rwanda e-procurement system to reduce costs from delayed and abandoned projects

Out-Law News | 18 May 2017 | 11:52 am | 1 min. read

An e-procurement system due to come into force in July will help to reduce the number and cost of delayed and abandoned projects in Rwandan, permanent secretary Isabelle Kalihangabo has said.

Kalihangabo was speaking at a meeting held to discuss the Rwanda OnLine e-Procurement System in public institutions, All Africa news site has reported.

Between 2013 and 2016 98 contracts worth Rwf95.67 billion ($116 million) were either abandoned or significantly delayed. Twenty four of those contracts, worth Rwf13.39 billion ($16 million), were abandoned and contractors disappeared after receiving payments of Rwf5.62 billion ($6.8 million), Kalihangabo said.

The abandoned contracts were infrastructure-based, including water, energy, roads, health and agriculture projects, she said, according to All Africa.

The e-procurement system will reduce face-to-face negotiation between the entities engaged in bidding and the public institutions offering tenders, thereby reducing risk of corruption, Kalihangabo said.

"The system will detect forged documents, including certificates of good completion and CVs," she said. It will also keep an online database of bidders.

Over 2,500 public businesses have already registered for the e-procurement system, All Africa said.

Johannesburg-based construction law expert Rob Morson of Pinsent Masons, the law firm behind Out-Law.com said: "All steps to increase procurement efficiency, improve document control and reduce corruption are encouraging. However, one needs to comprehensively tackle the underlying reasons for projects being abandoned. Lack of funds and delayed payments are very often the cause and this would not be remedied by streamlining procurement processes."

"Limiting face-to-face negotiation no doubt reduces the risk of corruption but also deprives the parties of a valuable opportunity to bridge and avoid legal and technical disconnects in complex projects, which too often result in disputes. Ultimately much will depend on the quality and completeness of the documents issued for tender, which is always a major factor in procurement and project success," Morson said.