MULTINATIONAL /COMESA

Transcription

1 AFRICAN DEVELOPMENT FUND Language: English Original: English MULTINATIONAL /COMESA (COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA) ENHANCING PROCUREMENT REFORMS AND CAPACITY PROJECT APPRAISAL REPORT NB: This document contains errata or corrigenda (see Annexes) INFRASTRUCTURE DEPARTMENT ONIN NORTH, EAST AND SOUTH REGIONS MAY 2006 SCCD: G.G.

2 TABLE OF CONTENTS Project Information Sheet, List Of Tables, List Of Annexes, Currency Equivalent, Weights and Measures, List Of Abbreviations, Project Matrix, and Executive Summary Page (i-viii) 1. ORIGIN AND HISTORY OF THE PROJECT Introduction Public Procurement Reform Project 2 2. BACKGROUND TO COMESA Objective and Mandate of COMESA Organisation of COMESA COMESA Secretariat COMESA Regional Integration Efforts 7 3. BUSINESS OPPORTUNITIES IN COMESA Business Climate in COMESA Public Procurement in COMESA THE PROJECT Project Concept and Rationale Project Area and Beneficiaries Strategic Context Project Objective Project Description and Outputs Detailed Project Description ADF Components Environmental and Social Impacts Project Cost Estimates Sources of Finance and Expenditure Schedule PROJECT IMPLEMENTATION Executing Agency Institutional Arrangements Project Implementation Schedule Procurement Arrangement Disbursement Arrangement Monitoring and Evaluation Financial Reporting and Auditing Aid Co-ordination PROJECT SUSTAINABILITY Recurring costs Project Sustainability Critical Risks and Mitigating Measures PROJECT BENEFITS Economic and Institutional Benefits Social Benefits CONCLUSIONS AND RECOMMENDATIONS Conclusions Recommendations 29 This report was prepared by Mr. Busulwa Kayongo, Principal Financial Analyst, ONIN.1 (Ext. 2481) and Mr. Emmanuel Lomo, Principal Procurement Specialist, PPRU (Ext. 2242), following their missions to COMESA Headquarters in March 2005, June 2005 and March Contributions were also received from Mr. John Mensah- Quainoo, Division Manager, PPRU (Ext. 2027). Any enquiries relating to this report may be referred to the authors or to Mr. I. Lobe Ndoumbe, Division Manager, ONIN.1 (Ext. 2163) and Mr. A. Rakotobe, Director, ONIN (Ext. 2040).

3 i LIST OF TABLES Page Table 4.1 : Project Cost Summary by Component 20 Table 4.2 : Project Category of Expenditure 20 Table 4.3 : Financing Plan 20 Table 4.4 : Expenditure Schedule by Source of Finance 20 Table 4.5 : Expenditure Schedule by Components 21 Table 5.1 : Summary of Project Implementation Schedule 22 Table 5.2 : Procurement Arrangements for ADF Components 23 LIST OF ANNEXES Page Annex 1 : Map of COMESA Member States and Project Area 1 Annex 2 : Performance of the Public Procurement Reform Project 4 Annex 3 : Intra-COMESA Trade 1 Annex 4 : Organisation Structure of COMESA Secretariat 1 Annex 5 : Financial Statements of COMESA Secretariat 1 Annex 6 : Status of Legislation Reforms as at September Annex 7 : State of Awareness of Procurement Reforms in COMESA 2 Annex 8 : Bank Group Collaboration with COMESA 2 Annex 9 : Detailed Project Description 4 Annex 10 : Draft Terms of Reference for Consulting Services 7 Annex 11 : Detailed Project Cost Estimates 3 Annex 12 : Draft Terms of Reference for Project Steering Committee 1 Annex 13 : Draft TORs for Project Manager and Procurement Expert 2 Annex 14 : Schematic Diagram of Project Implementation Method 1 Annex 15 : Project Implementation Schedule 1 Annex 16 : Chronology of Preparation and Appraisal Activities 1 CURRENCY EQUIVALENTS (March 2006) COMESA Currency = United States Dollar (US$) UA = EUR UA = US$ WEIGHTS AND MEASURES 1 Kilogram (kg) = 2.20 lbs 1 kilometre (km) = mile 1 square kilometre (km 2 ) = 100 hectare 1 hectare (ha) = acres 1 hectare (ha) = 10,000m 2 1 acre = m 2 1 tonne = 1000 kg 1 km = 1000m COMESA Financial Year (July 1 to June 30)

4 ii AFRICAN DEVELOPMENT BANK GROUP BP 323, 1012, Tunis, Belvéderé, Tunisia TEL: FAX: PROJECT INFORMATION SHEET The information given hereunder is intended to provide some guidance to prospective suppliers, contractors, consultants and all persons interested in the procurement of goods and services for the projects approved by the Boards of Directors of the Bank Group. More detailed information and guidance should be obtained from the Executing Agency. 1. COUNTRY : Common Market for Eastern and Southern Africa (COMESA) 2. NAME OF PROJECT : Enhancing Procurement Reforms and Capacity Project (EPRCP) 3. RECIPIENT : COMESA 4. EXECUTING AGENCY : COMESA Secretariat, Comesa Centre, Ben Bella Road, Lusaka, Zambia, Tel: / 32, Fax: , secgen@comesa.int 5. PROJECT DESCRIPTION : The project aims at enhancing procurement reforms in COMESA Member States. It consists of: (A) Enhancing Procurement Reforms; (B) Capacity Building; (C) Upgrading the Procurement Information Systems; and (D) Project Management. 6. TOTAL PROJECT COST : UA 6.36 million Foreign Cost : UA 5.66 million Local Cost : UA 0.70 million 7. ADF Grant (technical assistance) : UA 5.66 million 8. OTHER SOURCES COMESA : UA 0.70 million 9. DATE OF APPROVAL : June STARTING DATE AND DURATION : July Four (4) years. PROCUREMENT : Computer hardware and software, office equipment (National Shopping); Consulting services (Shortlist); and Training (Other). 12. CONSULTANCY SERVICES : (a) Two consulting firms for: (i) Public procurement and capacity building, and Development of Procurement Training Systems; and (ii) Information Technology; (b) Individual consultants for Legal and Legislative drafting.

5 iii LIST OF ABBREVIATIONS ADB = African Development Bank ADF = African Development Fund AfDB = The Bank Group (ADB, ADF and NTF) COMESA = Common Market for Eastern and Southern Africa CPIS = COMESA Procurement Information System DRC = The Democratic Republic of the Congo EAC = East African Community EIA = Environment Impact Assessment EPRCP = Enhancing Procurement Reforms and Capacity Project FTA = Free Trade Area GDP = Gross Domestic Product GNP = Gross National Product GPN = General Procurement Notice HIPC = Highly Indebted Poor Countries ICB = International Competitive Bidding IDA = International Development Association IDF = Institutional Development Fund IMF = International Monetary Fund MDGs = Millennium Development Goals NEPAD = New Partnership for Africa s Development NTF = Nigeria Trust Fund PCR = Project Completion report PPRP = Public Procurement Reform Project PTA = Preferential Trade Area for Eastern and Southern Africa PTA Bank = Eastern and Southern African Trade and Development Bank RMCs = Regional Member Countries of the Bank Group SADC = Southern African Development Community SMEs = Small and Medium Enterprises TCPE = Technical Committee of Procurement Experts UA = Unit of Account of the African Development Bank Group UNCITRAL = United Nations Commission on International Trade Law USD = United States Dollar US$ = United States Dollar WAEMU = West African Economic and Monetary Union

6 iv PROJECT MATRIX Procurement Reforms and Capacity Building Project Hierarchy Of Objectives Expected Results Reach Performance Indicators Indicative Targets Timeframe Assumptions/Risks Sector Goal/Theme To enhance governance and regional integration in COMESA through modern public procurement systems. Long-term Outcomes Improved governance (legal framework, transparency and accountability) in procurement. Public and private sectors Published procurement systems of COMESA Member States that conform to internationally acceptable standards for good governance. Modern procurement systems of at least 70% of COMESA Member States published on the COMESA Web-site by December Member States remain committed to COMESA objectives and to promoting good governance. Objective Medium-term Outcomes Beneficiaries: To enhance the public procurement systems of COMESA Member States by modernising and harmonising the laws, regulations and procedures and by strengthening the countries capacities to manage modern public procurement systems.. 1. Public and private sectors that are fully aware of the principles and workings of the national and regional public procurement systems. 2. National procurement systems that are consistent with the COMESA procurement Directive managed by skilled procurement experts. 3. Procurement training systems that are available within the region. Private sector, public sector, government officials, COMESA Secretariat 1. Number of participation in national and regional tenders by private sector players. 2. Member States that have published procurement laws and regulations. 3. Training Modules and case studies in public procurement systems prepared. 1. Increased participation in national and regional tenders by local private sector players from average of 0-3 to at least 6 bids per tender by December Promulgation of national legislation on public procurement in at least 60% of the remaining 15 Member States by end of June 2009 and on the web site by December Training Modules in public procurement systems, and training materials tested to internationally acceptable standards and utilised by Human capacity in Member States will be enhanced adequately to sustain the procurement reforms. 2. Higher institutes of learning accept to include procurement courses in their syllabuses. 3. COMESA Member States remain individually committed to public procurement reforms at national level. 4. Enhanced IT and human capacity for collection and dissemination of procurement information at national and COMESA levels. 4. Rate of utilisation of COMESA Website and number of countries that utilise the Website. 4. Utilisation of the COMESA Website at minimum rate of 200 hits per week by all Member States by December Activities/Inputs Short-term Outputs: 1. Enhancing Procurement Reforms (awareness and sensitisation workshops, drafting procurement bills and regulations, and development of training systems. Cost: UA 2.30 million. 1.1 Public and private sector participants attend workshop in each Member State. 1.2 Draft procurement laws and procures produced in Member States 1. Public sector 2. Private sector 3. COMESA Secretariat Staff 1.1 Number of participants at Awareness/sensitisation workshops. 1.2 Number of draft legislations drafted participants per Member State by December At least nine drafted national legislation on public procurement by December Governments committed to reforms and willing to implement the project. 1.3 Training modules and case studies produced. 1.3 Modules and case studies drafted 1.3 Training Modules in public procurement systems, and training materials drafted by December 2009.

7 Hierarchy Of Objectives Expected Results Reach Performance Indicators Indicative Targets Timeframe Assumptions/Risks v 2. Capacity building (training workshops in Member States and with COMESA Secretariat). Cost: UA 2.22 million. 2.1 A well trained critical mass of procurement professionals, capable of managing the modern procurement system. 2.1 Number course participants 2.1 Ten course participants attend procurement courses in each Member State. 3. Review and Upgrading of the COMESA Procurement Information System: Evaluation of Existing Web Site; Upgrading capacity for e-procurement. Cost: UA 0.52 million. 3.1 COMESA Procurement Information System on the Website is upgraded and at least 2 webmasters/site administrators in each country trained. 3.1 Number of countries with upgraded COMESA web site. 3.1 At least 14 Member States utilise COMESA Information system by December Project management (recruitment and maintaining personnel and acquisition of logistics. Cost: UA 1.32 million. 4.1 Project management team and logistics available during project implementation. 4.1 Number of staff and logistics in place 4.1 Project Manager, Procurement Expert, counterpart staff and support staff, IT system available by January 2007.

8 vi EXECUTIVE SUMMARY 1. ORIGIN AND HISTORY OF THE PROJECT In May 2001, the Bank Group provided an ADF grant of UA 1.17 million to COMESA to support its procurement reform programme in the Member States. The grant was provided to finance part of the COMESA Public Procurement Reform Project (PPRP), which commenced in May The main objective of the PPRP was to kick-start the process of improving the national procurement systems and help to start the process of harmonising public procurement rules, regulations and procedures in COMESA Member States. The PPRP was successfully implemented in 30 months and completed in December The conclusion from the project completion report (PCR), which was carried out in March 2006, indicates that the PPRP achieved three principal objectives: (i) it increased awareness of the need to improve governance (economic efficiency, transparency and accountability) in public procurement; (ii) it helped to publish the Baseline Data Diagnostics Survey Report on procurement; and (iii) it enabled the passing of the COMESA Public Procurement Framework Directive by the Authority (Heads of States and Governments), which was passed in Khartoum, Sudan in March The Directive, which was a direct result of the project, was an important step towards harmonising the procurement systems. Since the passage of the Directive, the Member States have embarked on the process of legislative reforms designed to modernise and align their procurement systems in line with the Directive. The PCR also concluded that the PPRP had an impact on COMESA Member States by increasing the awareness for the need to: (i) enhance good governance and transparency in procurement; (ii) harmonise public procurement systems; and (iii) improve accountability of public funds. The project also helped to develop a limited group of public procurement personnel and assisted COMESA to prepare its website-based procurement information system. At the same time, the implementation of the PPRP helped to identify certain obstacles to reforms, which, if not tackled urgently, would negatively affect the gains made. Among these are: (i) disparities in the development of procurement rules and systems within the Member States; (ii) low human skill capacity levels in procurement agencies; (iii) limited number of higher institutions offering training in procurement; and (iv) poor website connectivity. In view of this, there is a need to continue with the public procurement reforms. Following the completion of the PPRP, COMESA requested the Bank Group for technical assistance to finance a follow-up project that would consolidate and sustain the procurement reforms that were started under the PPRP. The new project, viz. Enhancing Procurement Reforms and Capacity Project (EPRCP) is intended to assist the Member States continue with the reform process and consolidate the gains that were made from the PPRP. The EPRCP aims at consolidating public procurement reforms and enhancing COMESA s regional integration efforts by harmonising the procurement systems. The project is formulated within the Bank Group's efforts to contribute to institutionalisation of good governance and to facilitate economic cooperation and regional integration among African countries. The project is also in line with the ADF-X Financing Policy Guidelines. The priority areas set under ADF-X include, among others: (i) Support for good governance (with focus on fiscal management, procurement, accountability and transparency); (ii) Regional economic cooperation and integration; and (iii) Capacity building. Thus, the project conforms to the Bank Group policies and priorities and falls within the priority areas of ADF-X.

9 vii 2. PURPOSE OF THE GRANT The purpose of the technical assistance grant to COMESA is to support public procurement reforms in its Member States, aimed at modernising and harmonising procurement systems. 3. SECTOR GOAL The sector goal of the proposed project is to enhance good governance and regional integration in COMESA through modern and harmonised public procurement systems. 4. PROJECT OBJECTIVE The objective of the proposed EPRCP is to enhance the public procurement systems of COMESA Member States by modernising and harmonising the laws, regulations and procedures and by strengthening the countries capacities to manage modern public procurement systems. 5. BRIEF DESCRIPTION OF THE PROJECT AND OUTPUTS The proposed project (EPRCP) aims at enhancing and consolidating procurement reforms that were commenced under the PPRP. The proposed EPRCP focuses on four principal areas. First, it entails the sensitisation of key policy makers and executives on the need for review of laws, policies and procedures that are not compliant with the modern public procurement framework that was developed under the PPRP. The project will deepen and broaden the awareness and sensitisation programme and ensure that it reaches stakeholders at all levels to ensure comprehension of the reform process. The EPRCP will also implement an awareness programme designed to empower the private sector given its critical supply role in the public procurement process. Second, the project will support legislation development at national level and implement modern and harmonised public procurement systems. Third, the project will strengthen the institutional capacities through training, which is intended to create capacity to support and sustain good procurement practices at national and COMESA levels. Fourth, the project will upgrade the procurement information system with capacity to publicise and host national procurement information on the website. The project components are: (i) Enhancing Procurement Reforms; (ii) Capacity Building; (iii) Upgrading Procurement Information Systems; and (iv) Project Management. The expected outputs will be: (i) Public and private sectors that are fully aware of the principles and workings of the national and regional public procurement systems; (ii) Publication of national procurement laws and regulations that are consistent with the COMESA procurement Directive passed under the PPRP; (iii) Well-designed procurement training materials and case studies; (iv) A well trained critical mass of procurement professionals, capable of managing the modern procurement system; and (v) Enhanced capacity at COMESA Secretariat level to implement COMESA objectives, and monitoring of compliance to COMESA Directives; and (vi) Enhanced IT and human capacity for collection and dissemination of procurement information. 6. PROJECT COSTS The total project cost is estimated at UA 6.36 million, of which UA 5.66 million (or 89%) will be in foreign exchange, and UA 0.70 million (11%) will be in local costs.

10 viii 7. SOURCE OF FINANCE The project will be financed by an ADF grant (technical assistance), in the amount of UA 5.66 million (or 89%), and COMESA with an amount of UA 0.70 million (11%). The ADF will finance the project from grant resources, in line with ADF-X Financing Policy Guidelines, which provide that, grant resources can be used under the following conditions, viz.: (i) Support for good governance; (ii) Regional economic cooperation and integration; and (iii) Capacity building. 8. PROJECT IMPLEMENTATION The COMESA Secretariat will be the Executing Agency of the project. The Secretariat will have the overall responsibility for coordination of project implementation activities, procurement, disbursement requests and reporting. The Project will be managed through the office of the Assistant Secretary General, by the Director of Legal and Institutional Affairs. 9. CONCLUSION The procurement reform process in the Member States of COMESA has started off well with the pioneering project (the PPRP) helping to kick-start the process with the Procurement Directive. The Directive, which is binding to all its Member States, has had a good impact as the countries are now sufficiently conscious on the need for reform. Three countries (Malawi, Madagascar and Uganda) have passed the necessary legislation on public procurement. In addition, the Baseline Data Diagnostics Survey report on procurement is available for use by the development partners. Any development partner wishing to directly assist an RMC in the area of public procurement reform could utilise the Baseline data as the starting point to prepare and develop its proposal. The proposed EPRCP will reinforce the implementation of the reforms that have been agreed upon by COMESA Member States through the Directive. The project will lead to wider development objectives, such as: (i) promoting better governance under the principles of economy, efficiency, nondiscrimination, transparency and accountability in public procurement; (ii) enhancing regional integration by increasing intra-regional trade among the Member States through harmonised procurement systems; and (iii) boosting economic growth and social progress through improved business environment. The contribution to increased intra-regional trade will be visibly felt when member governments begin to apply the regional competitive bidding mode of procurement on tenders above certain thresholds. The winning regional suppliers on such tenders will create the much-needed impact on trade, with the spin-off effect of increased industrialisation as suppliers construct back-up facilities. Above all, in the context of the current trend toward the utilisation of country systems, the reform of public procurement will prove to be crucial, and timely. It should be noted that the Bank Group has provided assistance to the West African Economic and Monetary Union (WAEMU) to help them reform public procurement systems in their eight Member States. In assisting in the reform and modernisation of the public procurement systems in the Member States of both COMESA and WAEMU (consisting of 53% of RMCs), the proposed project will have a major impact on the projects financed by the Bank Group in future. The project will pave the way for the utilisation by development partners (including the Bank Group) of national procurement systems, which will facilitate the implementation of projects financed by them.

11 1. ORIGIN AND HISTORY OF THE PROJECT 1.1 Introduction The Common Market for Eastern and Southern Africa (COMESA), consisting of 20 Member States 1 (Annex 1), was established in 1994 to replace the Preferential Trade Area for Eastern and Southern Africa (PTA), which had been in existence since The PTA was established to take advantage of a larger market size, to share the region s common heritage and destiny and to allow greater social and economic cooperation, with the ultimate objective of creating an economic community. In recognition of the importance of trade for regional integration, COMESA Member States launched, in 2000, the Free Trade Area (FTA). The objective of the FTA is to ensure free movement of goods and services produced within COMESA and removal of non-tariff barriers and therefore create an integrated market that can attract investments more effectively than smaller domestic markets As COMESA becomes more integrated, the need for fair and open trade becomes even greater. In order to encourage and enhance fair competition, transparency, and accountability in both private and public sectors, COMESA recognises the value of developing coherent and uniform procurement laws, regulations and procedures. The importance of procurement in trade liberalisation was appreciated by COMESA Council of Ministers in 1998 when they commissioned a study on public procurement, which was conducted across COMESA. The study revealed that, although there existed procurement laws in most COMESA countries, some aspects of the laws tended to restrict free trade. COMESA then resolved to embark on a reform initiative in public procurement that would involve the development of modern and harmonised procurement laws, procedures and regulations across its Member States and which would contribute to free trade in the region In 1999, COMESA requested the Bank Group to assist it in starting procurement reforms in its Member States. In response to the request, the Bank Group approved in May 2001, a technical assistance grant of UA 1.17 million, whose objective was to partly finance the COMESA Public Procurement Reform Project (PPRP). The main aim of the PPRP was to start the process of improving the national procurement systems and to begin harmonising public procurement rules, regulations and procedures in COMESA Member States. The PPRP, which commenced in May 2002, was successfully implemented and completed in December The PPRP achieved three main objectives: (i) it increased awareness of the need to improve governance (economic efficiency, transparency and accountability) in public procurement; (ii) it helped to produce the Baseline Data Diagnostics Survey Report on procurement in the Member States; and (iii) it facilitated the passing of the COMESA Public Procurement Framework Directive by the Authority (Heads of States and Governments), which was passed in Khartoum, Sudan in March Since the passage of the Directive, the Member States have embarked on the process of legislative reforms designed to align their procurement laws and regulations to the COMESA Directive According to the PCR which was prepared in March 2006, the PPRP has had an impact on COMESA Member Countries by increasing awareness for a need to: (i) enhance governance and transparency in procurement; (ii) harmonise public procurement policies and procedures; and (iii) improve accountability of government funds. It has also helped to develop a limited group of public procurement personnel. Besides, the implementation of the 1 The Member States are: Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.

12 2 PPRP has revealed several weaknesses that need to be addressed as part of the continuation of the reform process. They include: (i) disparities in the level of development of procurement rules and regulations, which would hinder harmonisation of procurement policies and procedures; (ii) low human capacity levels in government departments; (iii) limited numbers of higher institutions offering training in procurement; (iv) poor web site connectivity; and (v) internal conflict and lack of security. The conclusion from this is that there is a need to continue with the reform process and address the weaknesses identified Following the completion of the PPRP, COMESA requested the Bank Group for additional technical assistance to finance a follow-up project that would sustain the procurement reforms that were achieved under the PPRP. The new project, viz. Enhancing Procurement Reforms and Capacity Project (EPRCP) is intended to assist the Member States continue with the reform process and consolidate the gains that were made from the PPRP. In response to the request, the Bank Group mounted a preparation mission in March 2005, an appraisal mission in July 2005 and a PCR/post-appraisal in March The proposed EPRCP is within the Bank Group's efforts to contribute to institutionalisation of good governance and to facilitate economic cooperation and regional integration among African countries. The project is also in line with the ADF-X Financing Policy Guidelines. The priority areas set under ADF-X include, among others: (i) Support for good governance (with focus on fiscal management, procurement, accountability and transparency); (ii) Regional economic cooperation and integration; and (iii) Capacity building. According to the ADF-X, fund operations will focus on regional institutional capacity building, harmonisation of macroeconomic policy, trade liberalisation and creating the appropriate conditions for private sector development at regional level, and the promotion of sustainable development at regional level. Thus, the project is within the priority areas of ADF-X and conforms to the Bank Group policies and priorities as well as those of COMESA It should also be noted that the World Bank has expressed interest in the project and has indicated its willingness to provide additional resources to COMESA for procurement reforms in the Member States. The two institutions have agreed to assess the need for further assistance after the EPRCP has been approved by the Bank Group. 1.2 Public Procurement Reform Project The Bank Group approved the PPRP in May 2001, whose implementation started in May 2002 and was completed in December The Project Completion Report (PCR) has been prepared. A brief on the implementation of the PPRP is presented in Annex 2, and summarised hereunder The overall goal of the PPRP was to promote good governance through transparency and accountability in public procurement. The specific objective of the PPRP was to reform public procurement laws, regulations, procedures and practices in COMESA with a long-term goal of: (i) improving national procurement systems and capacity of COMESA Member States in public procurement; and (ii) harmonising public procurement rules, regulations and procedures through a COMESA Directive on Public Procurement The main components of the project were: (i) Preparing the Baseline Data Diagnostics and Development/Validation of COMESA Directives on Public Procurement; (ii) Implementing the Public Procurement Directives of COMESA; and (iii) Project Implementation Unit. The project, as a whole was managed effectively and efficiently.

13 The outputs of the PPRP were: (i) Baseline Data Diagnostics Survey report on procurement; (ii) COMESA Public Procurement Framework Directive by the Authority of Heads of States and Governments; (iii) Legislative reforms; (iv) Capacity building (training of trainers) to sustain good procurement practices; and (v) A Website-based Procurement Information System, which is to support the public procurement system The PCR concluded that the PPRP had positive impact on the procurement reforms in four areas. First, the Baseline Data Diagnostics Survey Report highlighted, among other things, the status of public procurement, laws, regulations and procedures in each Member States. The report has been used as basis for designing and preparing the proposed EPRCP. The report is also available for use by COMESA and its development partners to enhance procurement reforms in its Member States. Any development partner wishing to directly assist an RMC in the area of public procurement reform could utilise the Baseline data as the starting point to prepare and develop its proposal Second, the Procurement Directive 2, which is binding to all its Member States, has had a good impact as the countries are now sufficiently conscious on the need for reform. The Directive emphasised the need for the Member States to adopt modern national legislation on public procurement, which would enhance regional integration. The thrust of the Directive is that public procurement reform in COMESA should best be attained through: (i) Adoption of modern national legislation on public procurement where it does not exist, or the improvement of national legislation where it is outdated, in line with the United Nations Commission on International Trade Law (UNCITRAL) model; (ii) Adoption of principles and essential components of national legal frameworks for supporting projects on public procurement reforms in COMESA and enhancing regional integration; (iii) Establishment of the Technical Committee of Procurement Experts (TCPE); and (iv) Adoption of adequate institutional and organisational arrangements. The Directive was a major step towards harmonisation of the procurement systems in the Member States Since the passage of the Directive in March 2002, nine States (Congo, Djibouti, Ethiopia, Kenya, Madagascar, Malawi, Rwanda, Uganda and Zambia) have embarked on legislative reforms. COMESA now has three Member States with modern procurement laws (Malawi, Madagascar and Uganda), which are inspired by the UNCITRAL model, as recommended in the Directive, and have been posted on COMESA Website. Ethiopia and Kenya are finalising their new procurement laws. The key features of the Directive are presented in Annex Third, the training, which was conducted through regional seminars, has produced high-level awareness of the modern public procurement reform initiative. In a few Member States, Malawi being a good example, the training of trainers programme is beginning to bear fruit as the trainers from the COMESA programme are now being utilized by Governments to cascade the procurement knowledge and skills to lower levels under the ongoing national capacity building programmes. 2 According to Article 10 of the COMESA Treaty, a Directive is binding upon each Member State to which it is addressed as to the result to be achieved but not as to the means of achieving it. COMESA Directives are enforceable through Peer pressure. At every Minesterial Council meeting a report is provided on the status of each state in implementing Directives and those that are not complying are given ultimatums to comply. The Directives could also be enforced through COMESA Court of Justice.

14 Fourth, COMESA Procurement Information System (CPIS), which is a Website ( was launched in December 2004 and is awaiting implementation at national level. Its advantage will be that information on procurement opportunities will be available to many people at once and in a faster and cheaper way. The Website will have an impact on regional integration by increased business opportunities within the Member States Thus, the procurement reform process has started well with the pioneering project (the PPRP) helping to kick-start the process, which needs a follow-up project to consolidate the reforms. Apart from kick-starting the process, the PPRP has helped COMESA and the Bank Group to pick lessons from the project, resulting from a number of weaknesses identified during its implementation. The lessons (described below) have helped to understand better the problems associated with procurement reforms in the Member States Disparities in standards of public procurement: Generally, old and outdated procurement systems exist in most Member States and even in the few countries, where modern procurement systems exist, there are significant disparities. There is therefore a need to upgrade old and outdated procurement systems to bring them at the same level as those that are more advanced and to harmonise the procurement systems in line with the COMESA Procurement Directive Low human capacity levels in governments: The PPRP reports highlighted serious human capacity deficiencies in Member States. The PPRP did not provide adequate resources for capacity building for reasonable number of officials from procuring government institutions. The limited budget under the PPRP was used strictly for the training of trainers (TOT) at regional level. Thus, the problem remains critical, which will be mitigated by providing more resources for human capacity building at national level under the EPRCP Limited higher institutions of learning: Sustainability of capacity building in public procurement depends on availability of institutions for higher learning that could provide quality training. During the implementation of the PPRP, it was discovered that, among the several universities and institutes within the region, none of them offered courses on procurement. It is proposed that during the implementation of the EPRCP, various training institutes in the region will be invited to participate in training and awareness/sensitisation workshops to be organised in each Member State. The institutes to be invited will include universities and national and regional management training institutes. The aim of involving these institutes is to encourage them introduce the procurement subject in their syllabuses Poor Website connectivity and low levels of IT development: There are two key observations that were made during implementation of the CPIS, which have prompted the re-mapping of strategies designed to increase the utilisation of communications technologies in support of public procurement: (i) the depth of Internet connectivity in the Member States of COMESA is shallow and limited in most States to capital cities and even then, the majority of SMEs relied on Internet cafes; and (ii) the prohibitively high Internet pricing structure compelled a substantial number of SMEs to limit Internet browsing time. If these concerns are not addressed, they may negate the objective of promoting and providing full access to the CPIS. Given these concerns, the EPRCP will among other things, seek to enhance awareness of procurement opportunities through a three-thronged approach: (i) Member States will be encouraged to open further the IT and Internet information communication sectors to allow for increased private sector investment and competition, which in turn will lead to lowering of prices; (ii) Member States will be encouraged to expand Internet connectivity to cover all national procuring agencies; and (iii) the private

15 5 sector will be engaged through specific project-funded workshops and seminars designed to bring public awareness on the range of procurement opportunities that would be made available through the utilization of the CPIS The conclusion from the above is that there is a risk that the gains from the PPRP could be lost if the reform process is not continued. As has been noted above, only three Member States have modern procurement rules and regulations in accordance with the Directive and only two others would follow soon. Hence, there is a need to bring the rest of Member States at the same level. The proposed EPRCP will enhance the reform process by helping to (i) increase awareness in all the Member States; (ii) advance the national procurement rules and procedures in 15 Member States; (iii) build capacity in all the Member States; and (iv) upgrade the CPIS system. It is against the need to continue with the reforms, as well as the necessity to address the above mentioned weaknesses, that a case has been built for the proposed EPRCP. 2. BACKGROUND TO COMESA 2.1 Objective and Mandate of COMESA The Common Market for Eastern and Southern Africa (COMESA) was established in 1994 to replace the Preferential Trade Area for Eastern and Southern Africa (PTA), which had been in existence since 1981 within the framework of the Organisation of African Unity (OAU). The PTA was established to take advantage of a larger market size, to share the region s common heritage and destiny and to allow greater social and economic cooperation, with the ultimate objective being to create an economic community. The objective of COMESA is thus to facilitate the removal of the structural and institutional weaknesses in Member States so that they are able to attain sustained development individually and collectively as a regional bloc The vision of COMESA is to fully integrate the economic activities of its Member States, and come up with an internationally competitive regional economic community ready to merge with other regional groupings to realise the African Economic Community. The mandate of COMESA is to promote cooperation among Member States in the areas of economic development and policy, business environment, research and technology, peace and security. The objective of integrating the economic and social activities of COMESA would be achieved progressively in stages, i.e., through: (i) the creation of a Free Trade Area (FTA); followed by (ii) a Customs Union with a common external tariff, (iii) a Common Market in which there is free movement between Member States of labour and capital as well as goods and services, and finally, (iv) an Economic Community with a single currency, common monetary and fiscal policies, and free movement of people. The target is to complete this process by Organisation of COMESA COMESA has four organs that have the power to take decisions, namely, (i) the Authority of Heads of State and Government; (ii) the Council of Ministers; (iii) the COMESA Court of Justice; and (iv) the Committee of Governors of Central Banks. The Intergovernmental Committee of Permanent Secretaries, Technical Committees of experts, the COMESA Secretariat and the Consultative Committee make recommendations to the Council of Ministers, and which in turn makes recommendations to the Authority.

16 The Authority of Heads of State of Government is the supreme policy organ of COMESA. It is responsible for matters of general policy, the general direction and control of the performance of the executive functions of COMESA, and for the achievement of its aims and objectives. The Council of Ministers is composed of such Ministers as may be designated by each Member States. It ensures the proper functioning and development of COMESA with regards to its technical programs and takes policy decision on the programs and activities of COMESA including the monitoring and reviewing of its financial and administrative management. The Council has legislative power to make regulations and issue directives that are binding on Member States. The COMESA Court of Justice is the judicial organ of COMESA and has jurisdiction to adjudicate upon matters that may be referred to it pursuant to the COMESA Treaty. The COMESA Court of Justice also ensures the proper interpretation and application of the provisions of the Treaty, and adjudicates any disputes that may arise among the Member States regarding the interpretation and application of the provisions of the Treaty. The Committee of Governors of Central Banks manages the financial and monetary programs of COMESA There are several technical committees that are responsible for the various economic sectors and for administrative and budgetary matters. For instance, the Intergovernmental Committee (IC), which is made up of Permanent or Principal Secretaries from the Members States, is responsible for the development and management of programs and action plans in various sectors of co-operation, except in the finance and monetary sector. 2.3 COMESA Secretariat The Secretariat provides technical support and advisory services to the Member States for the implementation of the COMESA Treaty. To this end, it undertakes research and studies as a basis for implementing the decisions adopted by the Policy Organs. The areas of activity of the Secretariat include Agriculture, Transport and Communication, Industry and Energy, Trade, Customs and Monetary Co-operation, Investment Promotion, Infrastructure Development and Administration. The office of the Secretary General is supported by specialist corporate services, which are: legal office, strategic planning and research, technical co-operation, women in development, audit and public relations The Secretary General, who is appointed by the Authority for a term of five years, which is renewable, heads the Secretariat. The technical work for the Secretariat is grouped into two sections: (i) Programmes; and (ii) Administration/Finance. Each section is headed by an Assistant Secretary General (See the organisational chart in Annex 4). The Programme Section is subdivided into four Divisions, each being headed by a Director: Trade, Customs and Monetary Affairs; Investment Promotion and Private Sector Development; Infrastructure Development (which includes units on Transport and Energy); Information Technology. The Directors report to the Assistant Secretary General Programmes, who is in charge of the day-to-day administration of the technical work. The administrative and finance support services are clustered into two Divisions - the Administration Division and the Budget and Finance Division. The divisions are headed by directors, who report to the Assistant Secretary General Administration and Finance. The Office of the Secretary General also includes the Legal and institutional Affairs Division, which is headed by a Director (Legal Counsel). The Project Implementation Unit for the completed Public Procurement Reforms project (PPRP) was established under the Legal Counsel.

17 COMESA employs professional staff with a range of academic qualifications (economics, engineering, legal, accounting and finance). The professional staff have first degrees and relevant qualifications, and many also have post graduate qualifications in their respective fields. The Secretariat has 89 established positions, of which 40 (45%) are professional positions and 49 (55%) supportive staff. The quality of staff is satisfactory. Financial Sources of the Secretariat The Secretariat is financed by the Member States on the basis of an agreed formula of contributions. The budget of the Secretariat finances operational costs, principally staff salaries and related costs, hosting of meetings of Member States, program related costs and consultancies. Total budget contribution from the Member States has averaged about US$ 5.8 million per annum for the last four years to Total contribution for 2005 is about US$ 6.0 million. The four major contributors, Egypt, Kenya, Libya and Zimbabwe, contribute about 48% of the total budget. The budget contribution is adequate to meet the Secretariat annual expenditure of about US$ 5 million per annum. The contribution of resources from the Member States to finance the activities of COMESA has been satisfactory. The historical financial statements of COMESA are presented in Annex In addition, COMESA receives substantial support in terms of financial and technical resources from various cooperating partners to support varied development programme activities. For instance, the USAID/REDSO has committed US$ 7 million over a three year period since 2003 to support programmes aimed to foster trade and investment development in the COMESA region and partnership. The support is expected to be renewed soon with the possibility of increasing the amount to be committed. Other important cooperating partners, including AfDB, UNDP, CIDA, NORAD, CFC, FAO, DFID and Development Bank of South Africa (DBSA), UNCTAD, African Capacity Building Foundation (ACBF), and COMSEC among others, have together contributed resources amounting to over US$ 20 million to support various development programmes that are oriented to regional integration Further, the European Union has provided 23 million to support an ongoing Five-year Regional ICT Programme for priority activities in Infrastructure and IT development. The EU has also provided 8 million for the Regional Integration Support Programme (RISP) to facilitate COMESA activities in advancing its integration in areas of trade, monetary cooperation, trade negotiations, deepening the Free Trade Area (FTA) and other trade development oriented activities. Additionally, the World Bank is considering providing technical assistance for procurement reforms in the Member States. The two institutions have agreed to assess additional financial assistance required for the COMESA procurement reform programme after the proposed EPRCP has been approved by the Bank Group. 2.4 COMESA Regional Integration Efforts Regional integration is a process that moves through four stages, viz. (i) a preferential trade area; (ii) a free trade area; (iii) a customs union; and (iv) ultimately an economic community. COMESA Member States have agreed to go through the process of regional integration by creating and maintaining: (i) A full free trade area guaranteeing the free movement of goods and services produced within COMESA and the removal of all tariffs and non-tariff barriers; (ii) A customs union under which goods and services imported from non-comesa countries will attract an agreed single tariff in all COMESA states; (iii) Free movement of capital and investment supported by the adoption of a common investment area so as to create a more favourable investment climate for the COMESA region; (iv) A

18 8 gradual establishment of a payment union based on the COMESA Clearing House and the eventual establishment of a common monetary union with a common currency; and (v) The adoption of common visa arrangements, leading eventually to the free movement of bona fide persons. The target is to complete the process by In pursuit of the above goals, COMESA has focused its strategy on the removal of trade and investment barriers, with specific emphasis on trade liberalisation and facilitation, and improvement of business environment. Some significant progress has been recorded as highlighted in the sections that follow First, in 1985, COMESA created the Eastern and Southern Africa Trade and Development Bank (PTA Bank), which was established as a financial intermediary pursuant to the provisions of the Treaty (1981) establishing the Preferential Trade Area, later transformed to COMESA. The main activities of the PTA Bank are to provide financial support to various projects mainly in the private sectors of the economies. The PTA Bank is performing well. As of December 2005, its total assets and equity capital amounted to US$ 284 million and US$ 120 million respectively. In 2005, the PTA Bank made a profit of US$ 3.2 million compared to US$ 2.7 million in The ADB is the only institutional shareholder with equity capital of US$ 15 million (US$ 5 million paid and US$ 10 million callable). To date the Bank has provided two lines of credit (UA 15 million in 1994 and US$ 30 million in 2003, which was combined with a technical assistance grant of UA 0.68 million). The PTA Bank has had an economic impact on its Members by providing long and short-term finance for trade and investments, and by promoting SMEs in the region Second, COMESA (by then Preferential Trade Area - PTA) introduced in 1987 the Yellow Card Third Party Insurance Scheme to facilitate the smooth movement of vehicles, goods and persons by providing third party motor vehicle insurance cover in accordance with laws in force in Member States. There are currently over 160 insurance companies and several insurance agents in the participating 13 Member States (Burundi, Djibouti, DR Congo, Eritrea, Ethiopia, Kenya, Malawi, Rwanda, Tanzania, Uganda, Sudan, Zambia and Zimbabwe) that are issuing Yellow Cards. Other members are expected to join the scheme including those countries outside COMESA such South Africa, Botswana, Namibia, Lesotho and Mozambique. The success of the Yellow Card Scheme has therefore significantly contributed to deepening regional economic integration of COMESA by facilitating Interstate movement of persons, goods and means of transport facilitated thereby augmenting both intra and extra regional trade Third, COMESA (by then PTA) took another step in 1990 to facilitate trade and investment in the sub-region by establishing the COMESA Reinsurance Company. The Company provides reinsurance and therefore helps to retain resources within the sub-region, and promote economic cooperation among Member States. The Company, which is based in Nairobi, Kenya, was officially launched in 1992 and commenced writing reinsurance business in January As of 30 September 2005, COMESA Reinsurance Company had written a premium income of US$ 18.2 million compared with a premium income of US$ 17.2 million for the same period in During the same period, the Company made an underwriting profit of US$ 1.42 million, compared to US$ 0.97 million for the same period in Total assets amounted to US$ 31.4 million in September 2005, compared to US$ 24.5 million in September Total paid up share capital of the Company amounted to US$ million as at September The Company maintains a regional credit rating of AA and an international credit rating of BBB for the year 2005 from Global Credit Rating. Specifically, the Company has contributed to fostering regional integration of COMESA, first

19 9 by providing reinsurance which therefore helps to retain much needed resources within the sub-region, and secondly by allowing smaller insurance companies to spread risk in a wider COMESA insurance pool hence promoting economic cooperation among Member States Fourth, in 1997, COMESA introduced the Regional Customs Bond Guarantee Scheme (RCBG), which is one of the pioneer regional trade facilitation instruments introduced by the organisation. The scheme aims to eliminate the avoidable but often onerous administrative and financial costs that are associated with the current practice of nationally executed Customs Bonds for transit goods traffic. It is designed to enhance the speedy movement, clearance and release of goods, which will generate great benefits to both traders and to national economies by significantly reducing the various costs associated with cargo transport. It is estimated that about US$ 1.2 billion belonging to Clearing and Forwarding agents and transport operators is tied up in financial institutions as bond guarantees at any one time. The scheme would also result in quicker clearance of vehicles. In general, the scheme is intended to produce significant transport savings and contribute to trade efficiency by eliminating the practice of customs bond guarantees executed in each transit country. In order for the scheme to be fully launched, however, at least 9 member States need to ratify the protocol. So far, seven COMESA member states, viz. Ethiopia, Kenya, Malawi, Rwanda, Sudan, Uganda, and Zimbabwe have ratified the RCBG agreement while Burundi, DRC, and Zambia are expected to follow suit soon Fifth, in October 2000, COMESA Member States launched the Free Trade Area (FTA), making it the only FTA in Africa. Eleven countries, namely Burundi, Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Rwanda, Zambia and Zimbabwe have ratified the FTA Agreement. The objective of the FTA is to ensure free movement of goods and services produced within the COMESA sub-region and the removal of all non-tariff barriers and therefore create an integrated market that can attract investments much more effectively than smaller domestic markets. The Member States of the FTA trade with each other on duty-free terms for all goods originating from within their territories. The FTA accounts for nearly 75% of the combined COMESA GDP and about 53% of its total population. The other COMESA Member States 3 are planning to join the FTA later. An assessment of intra-comesa trade in the FTA indicates an encouraging trend in the growth of intra-regional trade. The intra-fta trade reached US$ 7.3 billion in 2005, up from US$ 4.6 billion in 2004; US$ 4.8 billion in 2003 and US$ 4.2 billion in Sixth, in 2001, COMESA established the African Trade Insurance Agency (ATI), whose purpose is to provide insurance against political risks for investments in the sub-region as well as other African states. The facility should encourage investments and enhance intraregional trade. Its objective is to facilitate, encourage and develop the provision of, or the support for reinsurance, including co-insurance and reinsurance, guarantees and other financial instruments and services for the purpose of trade, investment and other productive activities in Africa. The ATI is a Pan African Institution governed by the agreement establishing the African Trade Insurance Agency. The participating Member States are Burundi, D.R. Congo, Eritrea, Kenya, Madagascar, Malawi, Rwanda, Tanzania, Uganda and Zambia. The other members are COMESA, Gerling NCM, the PTA Bank and the COMESA Reinsurance Company. The ATI commenced commercial operations in April The value of supported transactions at the end of 2004 stood at US$ 96 million. The World Bank has supported the operations of the ATI with a loan of US$ 115 million. The ATI is in 3 The status of tariff reductions in COMESA non-fta countries as at 31 December 2005 stood at 80% for Burundi, Comoros, Eritrea, Uganda; 10% for Ethiopia and nil for Angola, DRC, Seychelles and Swaziland.

20 10 advanced discussion with IDA to re-structure its capital by converting IDA loans into share capital which would increase its capital base from US$ 1.3 million to over US$ 400 million. The ATI has severally contributed to facilitating foreign direct investment and enhanced intra- regional trade by securing investments against potential risks COMESA has also established several other specialised institutions to support regional integration and to address the specific needs of the business community in the region. (i) the COMESA Clearing House in Zimbabwe; (ii) the COMESA Association of Commercial Banks in Zimbabwe; (iii) the COMESA Leather Institute in Ethiopia; (iv) A COMESA Court of Justice located in Khartoum, Sudan COMESA s measures taken to facilitate regional integration in the sub-region are producing encouraging results. As indicated in Section 3.1 and Annex 3, intra-comesa trade has grown from US$ 834 million in 1985 to US$ 5.3 billion in 2003, US$ 5.4 billion in 2004, and estimated at over US$ 7 billion in COMESA is a strong and well managed institution which has matured and ready to continue with its regional integration efforts until the economic community is formed. 3. BUSINESS OPPORTUNITIES IN COMESA 3.1 Business Climate in COMESA COMESA's greatest resource is its people. The population of the Member States is estimated at 374 million and growing at a rate of 2.5 % per annum. The youth (18 to 39) comprises more than 50% of the total population. This large number of people in the region constitutes a potentially huge market, but also a substantial reservoir of both skilled and unskilled labour. In terms of natural resources, the region is one of the richest in the World. For instance, of the total surface area estimated at million km2, 60% is endowed with rivers and lakes, which could jointly be exploited for water transport, hydroelectric power, irrigation, and fisheries. More than 90% of potentially arable land is yet to be exploited, while 95% of the water is not being exploited for economic gain. The hydroelectric potential of the COMESA region is estimated at 700,000 megawatts, of which 96% remains unexploited In terms of mineral potential, the COMESA region produces a significant proportion of the World's minerals. It is estimated that the region contains 300 billion metric tons of phosphates, more than 105 billion tons of iron ore, about 2,000 billion tons of petroleum and large quantities of uranium, nickel, copper and cobalt. This huge potential awaits economic exploitation. Kenya has titanium deposits estimated at 5.6 million tons, or 10% of world reserves, and could generate cumulative gross revenue of over US$ 600 million. With the solid foundation that COMESA programmes have made in reducing barriers to trade and creating a favourable investment environment, it is now more possible than ever before to exploit these resources. Some countries are already exploiting these minerals. Zambia the largest producer of copper and cobalt in the sub-region exports over tons of copper per annum, which could rise to one million tons by Tanzania earns about US$ 400 million per annum from gold From the economic point of view, the countries of COMESA have a combined GDP of about US$ 203 billion. During 2003 and 2004, despite the slowdown in the expansion of world trade, intra-comesa trade continued to increase at record rates. As presented in Annex 3, total intra-comesa trade increased from US$ 4.2 billion in 2002 to US$ 4.8 billion in 2003 and to US$ 5.4 billion in 2004 and estimated at over US$ 7 billion in 2005.

21 11 Comoros, Egypt, Eritrea and Madagascar achieved especially high growth rates of exports to the region, though other countries such as Kenya, Malawi, Rwanda, Uganda, Zambia and Zimbabwe also achieved significantly high growth rates of exports to the region. On the import side, Burundi, Democratic Republic of Congo, Eritrea, Rwanda and Zambia had substantial increases in their imports from the region. The top intra-comesa export products include tea, sugar, beverages, cement and petroleum oils substances. The value of total trade (import and export) by COMESA Member States reached US$ 91.8 billion in 2004, up from US$ 64 billion in However, total exports out of COMESA Member States amounted to US$ 43.8 billion in Most of the COMESA Member States are implementing economic reform programmes, principally with the support of the World Bank, IMF and the AfDB. Structural adjustment and economic reform at the national level make it more likely that regional integration measures will succeed because countries are no longer operating under the constraints of import-substitution industrialisation strategies. Countries which have removed exchange control restrictions, reduced tariff barriers to trade, reduced the bureaucratic obstacles to doing business (including obstacles to cross-border investment and movement of factors of production), allowed interest rates to be set by the market and implemented other fiscal, financial and structural reforms, are now better placed to achieve economic integration with each other In view of the above, it can be concluded that the resources available in the region as well as the economic and political reforms that are taking place in the Member States do confirm the availability of huge potential for investment and trade opportunities in the region. The economic reforms are not only opening up spaces for private investment, they are also providing opportunities for COMESA to advance its agenda of increasing intra-trade. It is therefore expected that good governance, through transparency and accountability in public procurement system in the region, will further enhance intra-regional trade in COMESA. 3.2 Public Procurement in COMESA A review of the economic developmental pattern in COMESA has shown that there is a large gap between current and expected levels of development in a majority of COMESA Member States. This has created a heavy demand for government capital expenditure programmes required to support sustained economic development. Public procurement comes in as the vehicle for delivering the requirement of governments to fulfil public missions. Effective delivery calls for good governance and this is the area where most governments have come short, resulting therefore in public sector investment programmes that have failed to contribute meaningfully to economic development. Despite these shortcomings, there is scope for harmonization and integration of systems with a view to achieving higher levels of economic and social progress at regional level The effectiveness and efficiency of public procurement in many COMESA Member States has for years been undermined by weak institutional arrangements, lack of capacity and low levels of accountability on the part of public officials, which has given rise to corruption of varying magnitude at various levels of the public procurement delivery system. The result of this is delayed economic progress as governments pay extra costs for goods and services, thereby straining the already strained public expenditure budget. On a positive note, however, public procurement reforms are taking place in most of COMESA Member States (Annex 6). The reforms are being supported by capacity building programmes for promoting higher levels of professionalism in public procurement. The Bank Group has played a leading

22 12 role in reforming the procurement systems in the Member States of COMESA through the PPRP, by particularly helping to prepare the Baseline Data Diagnostic Survey Report The Baseline Data Diagnostic Survey Report identified major weaknesses within the procurement systems of COMESA Member States. Broadly, these can be summed up as: (i) deficiencies in legislative authority and procurement practices; (ii) weak institutional capacities to develop and implement public procurement policies; (iii) restriction against fair competition; (iv) lack of information on public procurement opportunities; and (v) revenue loss through non-transparent practices. More specifically, the survey identified the following weakness that need to be addressed during the reform processes: (i) (ii) (iii) (iv) (v) (vi) There is lack of sufficient legal authority in some Member States, due to absence of law governing procurement activities. Where there are regulations, they have been left to legally weaker instruments, thus making enforcement and harmonisation of the rules at national and regional levels difficult. There is absence of some basic components of a modern legal framework for public procurement, in particular standard bidding documents, including standard form of contract. There is noticeable absence to one extent or another of ethics, conflict of interest and anti-corruption rules for the public procurement context. There is therefore need for enactment of clear rules concerning the affirmative ethical obligations of procurement officials to act at all time in the public interest. Institutional entities and functions ancillary to the procurement process that can play an important role in implementation and enforcement, such as the Audit Office, are weak and need to be strengthened. Publication of information about bidding opportunities is not as effective as it should be in reaching bidders, in particular publication of notices of contract awards are not a universal practice. This requires improving disseminating information, including outcome of procurement proceedings. There are disparities in procurement systems of Member States which need to be modernised and harmonised to facility regional integration through trade The above-mentioned weaknesses do provide a fertile ground for further development of the public procurement delivery system required to provide governments with the needed goods, service and civil works to fulfil the growing developmental demands. The reforms should help unlock the movement of public goods, service and construction works across COMESA national borders as suppliers respond to regional tender notices. The program of modernisation and harmonization of public procurement laws that was started under the PPRP should make this kind of trade possible. The EPRCP will enhance the reforms to ensure that the region has modern and harmonised procurement systems. 4. THE PROJECT

23 Project Concept and Rationale Effective and efficient procurement systems are essential to the achievements of the millennium development goals (MDGs) and the promotion of sustainable development. Good procurement systems are crucial to the effectiveness of public spending and public financial management. Weak procurement systems lead to wasted resources, increase cost of doing business and compromise development results. Unfortunately, procurement systems in a large number of RMCs of the Bank Group, including COMESA Member States, are still relatively weak. Strengthening procurement systems in RMCs is therefore an essential element of RMCs efforts to achieve economic development. Improvements in the management of public procurement systems of RMCs would produce enormous benefits towards efficient use of public resources, and contribute to the achievement of the MDGs In recognition of the importance of public procurement on economic development, the Bank Group jointly with the World Bank and the International Trade Centre (ITC) organised a Conference on Public Procurement Reform in Africa, in December 1998, in Abidjan, Cote d Ivoire. The main outcome of the Conference was that there was a need for the RMCs and the development partners to accord a higher strategic priority to public procurement efforts as well as build capacity to manage the reforms. In line with the conclusions of the conference as well as its commitment to promote good governance (accountability, transparency, rule of law and participation) in the RMCs, the Bank Group embarked on programs to support procurement reforms starting in the West African Economic and Monetary Union (WAEMU) and COMESA The COMESA Secretariat together with 14 Member States of the organisation participated in the public procurement Conference in Abidjan. COMESA endorsed the conclusions of the Conference and committed itself to engage on procurement reforms within its Member States. This commitment was reaffirmed when, in 1999, the COMESA Council of Ministers commissioned a study on public procurement across COMESA. The study objective was to establish whether COMESA Member States had laws on public procurement and whether those laws enhanced or restricted free trade among the Member States. A preliminary survey of procurement laws and systems carried out in 10 COMESA Member States indicated that, although there were some procurement laws in these countries, some aspects of the laws tended to restrict free trade. The preliminary study also recommended for a more comprehensive survey to be conducted to facilitate the modernisation and harmonisation of procurement systems in the Member States Based on the conclusion of the study, COMESA, with the support of the Bank Group launched in 2002 a first series of reforms under the COMESA Public Procurement Reforms Project (PPRP). The PPRP, which was completed in December 2004, helped to kick-start the procurement reform process in COMESA Member States. The PPRP resulted in the adoption of the COMESA Procurement Directive, aimed at modernising and harmonising procurement systems in the COMESA States. In accordance with the Directive, the Member States are required to (i) upgrade their procurement systems based on international standards; (ii) harmonise their procurement policies and procedures; and (iii) build capacity for efficient management of procurement systems.

24 In order to help the Member States gradually meet these requirements, there is a need to address critical issues that were identified during the implementation of the PPRP (Section 1.2). Firstly, public awareness of the legislative reform initiative is still low and there is therefore a need to address this issue by targeting both the public and the private sector. Secondly, the reform process in fifteen of the Member States 4 is still in the initial stages, and it is therefore important that the process is continued to ensure that the reforms are sustained. Thirdly, the procurement systems in the Member States are not at the same level of development and hence there is a need to align them to the Directive. Fourthly, procurement skills in the Member States are inadequate, and hence there is a need for capacity building through a multithronged approach involving (i) development of training material and case studies, (ii) conducting training seminars that have a strong Training of the Trainers component, and (iii) providing advice on building robust national procurement systems. Fourthly, COMESA Public Information System needs to be upgraded and test-run at national levels in the Member States. It is in this context that COMESA conceived the EPRCP and approached the Bank Group for assistance for further procurement reforms within its Member States The EPRCP aims at continuing and sustaining the reform process launched under the PPRP. Public procurement is a big part of the economy of COMESA Member States. In Uganda, for instance, 70% of public spending goes through the public procurement system. In Angola, the proportion is about 60%. By helping to modernise and harmonise public procurement systems within COMESA States, the EPRCP will help to improve the management of public expenditures and create a more conducive environment for public procurement. The project will improve national procurement systems through transparent rules, regulations and procedures and ensure sustainability of good practices in public procurement. The EPRCP will also enhance competition in procurement of goods and services within the Free Trade Area and encourage more international awareness of procurement opportunities in COMESA The proposed EPRCP is in line with the Bank Group s objectives to (i) promote good governance in RMCs; (ii) foster economic cooperation and regional integration; and (iii) enhance the capacity of regional and sub-regional organisations to efficiently conduct reforms within their respective Member States. Strengthening procurement systems is an important element of the Bank Group policy to support good governance in RMCS. In supporting the reform of the procurement systems through COMESA, the Bank Group also seeks to encourage economic integration of COMESA Member Countries and enhance intraregional trade, as well as to build the capacity of COMESA to manage procurement reforms within the region. The project is also consistent with the Bank Group s objective of helping the RMCs to create an enabling environment for private sector activities The proposed project conforms to the ADF-X Financing Policy Guidelines, especially the priority areas of: (i) Support for good governance (with focus on fiscal management, procurement, accountability and transparency); (ii) Regional economic cooperation and integration; and (iii) Capacity building The experience gained and lessons learnt from the PPRP (highlighted in Section 1.2), were taken into account in designing the EPRCP and will also be valuable during its implementation. 4 The 15 Member States are: Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Libya, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Zambia, and Zimbabwe.

25 Project Area and Beneficiaries The EPRCP will benefit: (i) governments of Member States; (ii) the private sector; and (iii) the development partners (bilateral and multilateral). The project will benefit all COMESA Member States by helping them to modernise and harmonise their national procurement systems and by strengthening their institutional capacity to enable them manage the modernised systems. It will also strengthen the capacity of the Secretariat to enable it assist the Member States implement the procurement systems. The project will promote better governance and harmonise the public procurement systems in the Member States. The achievement of this will enhance intra-regional trade in COMESA and trade between COMESA and the rest of the world. Therefore, the project will also benefit consumers who will have wider access to the alternative suppliers of goods and services outside their national boundaries and beyond the COMESA region Due to improved business climate, the project will benefit the private sector as business firms and individuals will be able to compete for public procurement opportunities through transparent systems. The private sector will also profit from increased procurement opportunities within the region due to harmonised procurement systems and increased investments in the region. In addition, the project will pave the way for the utilisation by development partners (including the Bank Group) of national procurement systems, which will facilitate the implementation of projects financed by them. 4.3 Strategic Context In order to enhance economic growth and integration within its Member States, COMESA s strategy is to modernise and harmonise public procurement systems. COMESA recognises the significance of improving governance and harmonisation in public procurement as one of the means for achieving sustainable economic growth and integration through increased trade within the region. It is for this reason that COMESA has embarked on reforms in public procurement by developing modern and harmonised procurement systems, which will contribute to free trade across the region, thereby strengthening regional integration. The achievement of the vision for strong economic integration in the region through transparent procurement systems is recognised by, not only COMESA and the RMCs, but also by the development partners, notably, the Bank Group and the World Bank. Sector Goal 4.4 Project Objective The sector goal of the proposed project is to enhance good governance and regional integration in COMESA through modern and harmonised public procurement systems. Specific Objective The objective of the proposed EPRCP is to enhance the public procurement systems of COMESA Member States by modernising and harmonising the laws, regulations and procedures and by strengthening the countries capacities to manage modern public procurement systems.

26 Project Description and Outputs The proposed project aims at enhancing procurement reforms that were commenced under the PPRP, by particularly addressing the weaknesses (highlighted in Section 1.2) that were identified during the implementation of the PPRP. The project will facilitate modernising the national systems and ensure that the procurement laws, regulations and procedures are harmonised across COMESA. It will also entail providing capacity to the Member States to support and sustain good procurement practices. It will further assist the Member States to utilise the COMESA Procurement Information System, with a view of increasing awareness of public procurement opportunities in COMESA The project will focus on four principal areas: (i) (ii) (iii) (iv) Sensitisation of key policy makers and executives on the need for review of laws, policies and procedures that are compliant with the modern public procurement framework, as well as an awareness programme designed to empower the private sector; Support to national legislation process, involving the legislative assemblies and implement modern and harmonised regional public procurement systems; Strengthen the institutional capacities through training, which is intended to create capacity to support and sustain good procurement practices at national and COMESA levels; and Upgrade the procurement information system with capacity to publicise and host national procurement information on the website Outputs are summarised as follows: (i) Public and private sectors that are fully aware of the principles and workings of the national and regional public procurement systems; (ii) Published national procurement laws and regulations that are consistent with the COMESA Procurement Directive; (iii) Well-designed procurement training materials and case studies (covering the design and implementation of training workshops, toolkit design, and professional development programmes); (iv) A well trained critical mass of procurement professionals; (v) Enhanced capacity at COMESA Secretariat level to implement COMESA objectives, and monitoring of compliance with COMESA Directives; and (vi) Enhanced IT and human capacity for collection and dissemination of procurement information at national and COMESA levels. Details of each sub-component are provided in Section Detailed Project Description The project consists of four principal components, whose details are described in Annex 9 and summarised below. They are as follow: (i) (ii) (iii) (iv) Component A Enhancing Procurement Reforms; Component B Capacity Building; Component C Upgrading the Procurement Information System; and Component D Project Management.

27 17 COMPONENT A ENHANCING PROCUREMENT REFORMS The objective of the Enhancing Procurement Reforms Component is to provide support to COMESA in implementing the reforms that were started under the previous project (PPRP) and to sustain gains made by Member States in implementing the procurement reform Directive. This will entail reforming Member States laws in line with the COMESA Directive, to enable them incorporate it in their national legislations. Component A consists of three sub-components, viz.; (i) Awareness and Sensitisation on the Modern Public Procurement Framework; (ii) Support to the National Legislative Process; and (iii) Development of Procurement Training Systems A1 Awareness and Sensitisation on the Modern Public Procurement Framework: Sub-Component A1 will help to deepen and broaden the awareness and sensitisation programme and ensure that it reaches all stakeholders. The private sector, as the supplier of government requirements will be associated with the reform process at an early stage so as to enable it to respond to the challenging environment under which it will operate. The activities of Sub-component A1 (awareness and sensitisation) will mainly be done through workshops in the Member States, lasting two to three days, on average. Participants will be invited from government agencies related to procurement, national management training institutions and the private sector. The consultants (Annex 10) to be engaged for this sub-component will guide deliberations at these workshops. Lessons from advanced countries in public procurement and from those that are considered to apply good governance practice will be used. The output of Sub-component A1 will be public and private sectors that are aware of the principles and workings of the national and regional public procurement system A2 Support to National Legislative Process: Sub-Component A2 will target the 15 Member States (Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Libya, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Zambia, and Zimbabwe) that are still at the initial stages of the reforms. The activities of Sub-component A2 will be carried out by individual consultants (Annex 10), and will include desk review, national stakeholder workshops to assess legal support requirements, and development of draft procurement bills and regulations. The Outputs of Sub-component A2 will be the publication of national procurement laws and regulations that are consistent with the COMESA Procurement Directive, by December 2009 in at least nine Member States out of fifteen A3 Development of Training Systems: Development of training systems include training modules and case studies on public procurement which are critical to the capacity building. It will cover the design and implementation of training workshops, toolkit design, and professional development programmes. The modules and case studies will help guide course presenters in delivery style and content, thereby optimising mutual (or peer-to-peer) learning efforts. Clear and well-written modules should facilitate enhanced course planning. The modules will also help in the systematic flow of the capacity building effort to lower levels through the Training of Trainers (TOT) programme. The consulting firm (Annex 10) to be recruited for this Sub-component will field a team of procurement experts with pedagogical expertise in developing modules, which can be used for short-term and longterm training. It could also be used for professional development programmes, which could lead to examinations and award of diplomas or certificates. In this regard, the consultant will also be required to organise one regional workshop with the management training institutes in the region with a view of adopting a curriculum for procurement. The outputs of Subcomponent A3 will be (i) Procurement course training modules, toolkits and professional development programmes; and (ii) Procurement training case studies.

28 18 COMPONENT B CAPACITY BUILDING Component B will consist of three sub-components, viz. (i) Capacity Building at National Level; (ii) Capacity Building at COMESA Secretariat; and (iii) Private Sector Opportunity Seminars B1 Capacity Building at National Level will entail training activities for National Procurement Agency staff for each of the Member States. The PPRP covered capacity building through three sub-regional workshops in Zambia, Madagascar and Uganda. Due to limited PPRP resources, it was not possible to have specific in-country training required to meet specific capacity building necessary to sustain the reform effort at national level. The activities under Sub-Component B1 will involve training workshops, which will be organised in each Member State to allow for implementation of country-focused training strategies. Participants undergoing national training programmes will be taken through a comprehensive training of trainer s process, and therefore selection criteria will be focused on the participants ability and potential to absorb and apply the knowledge and skills acquired. The output of Sub-Component B1 will be a well-trained critical mass of procurement professionals capable of managing the procurement system. The fully trained national procurement officials (10 per each Member State), capable of training others and managing the procurement process, should be operational by December B2 Capacity Building at COMESA Secretariat: It will entail providing practical training that will be useful to the regional capacity building initiative. The output will be 10 professional staff from COMESA Secretariat trained in modern procurement processes B3- Private Sector Opportunity Seminars: Under this sub-component, seminars for the private sector will be conducted. The objective is to encourage the private sector to become more involved in public/private sector partnership arrangements, especially with regard to public procurement. The seminars will have the objective of stimulating the private sector, which bids for government tenders, into understanding the COMESA environment within which they operate. Participants will receive guidance on how to optimally benefit from the procurement opportunities that the region offers. Besides bid winning strategies and contracting, other topics will include business knowledge, best business practices, professional development, etc. The output of Component B3 will be about private sector individuals from each COMESA country that will be well informed on the business opportunities available within the region. COMPONENT C UPGRADING THE PROCUREMENT INFORMATION SYSTEM The COMESA Procurement Information System (CPIS) is the Web Site based engine that will drive the modern public procurement system. It will have capacity to publicise national procurement information, using the latest and cost effective IT systems, which was appreciated during the launching of the Web Site in December Component C has two sub-components, namely: (i) Upgrading of Procurement Information Systems; and (ii) Capacity building of National Procurement Information System Sub-component C1 will entail the review and upgrading of the current procurement information system. The upgrading work will involve deepening of the IT processes that will make it possible to go beyond the mere publicising of procurement information to performing other advanced features such as e-procurement that will enable suppliers to submit bids electronically. It is also envisaged that the emerging IT system will have the capability of

29 19 compiling information on procurement activities from each Member State, including information on markets, procurement advertisements, and progress on procurement reform. The output of Sub-component C1 will be enhanced IT and human capacity for collection and dissemination of procurement information. The success could be measured by utilisation of the COMESA Website at minimum rate of 200 hits per week per country by December Sub-component C2: Capacity building of the national procurement information systems will be carried out through workshops of about three days. The sub-component will aim at an output of at least 2 skilled webmasters/site administrators in each member state, who are capable of managing and maintaining the national site on the COMESA Website. COMPONENT D PROJECT MANAGEMENT The existing project implementation team, which implemented the PPRP will be continued. Under the PPRP, the project implementation team consisted of a Project Manager and support staff. It had also one counterpart staff on a temporary basis. In addition to the above, the project implementation team under the EPRCP will include a Procurement Expert and a fulltime professional counterpart staff. The attachment of a counterpart staff to the project by COMESA is a requirement that has been made a condition of the grant The project implementation team will be equipped with computer facilities, printing and photocopying equipment, communications equipment, office furniture and project vehicle. One project vehicle will be needed to transport about 16 consultants who will be working at COMESA headquarters at various times during the four-year period of project implementation. It will also carry various delegates coming to Lusaka for consultation on the project activities, project documents and materials as well as the project team. The project vehicle is one of the sub-components of the project (to be financed by COMESA). The operating costs of the project implementation team will be met by the project. The project will also benefit from rolled over furniture and some office equipment purchased under the PPRP and which is still in good operational condition. 4.7 ADF Components The ADF will co-finance the four components with COMESA, viz.: (i) A Enhancing Procurement Reforms; (ii) B Capacity Building; (iii) C Upgrading the Procurement Information System; and (iv) D Project Management. 4.8 Environment and Social Impacts The project is classified as a Category III project under the Bank's environmental classification system. Given the nature of the project, it will have no direct negative impact on the environment. 4.9 Project Cost Estimates Detailed project cost estimates are presented in Annex 11 and summarised in Table 4.1. Total project cost is estimated at UA 6.36 million of which UA 5.66 million (89%) will be in foreign cost and UA 0.70 million (11%) will be in local cost. The cost estimates were based on the experience gained from implementing the PPRP as well as on the international norms for recruitment of high-quality consulting firms and individual consultants. High profile consulting firms and individuals will be recruited for assignments under the project.

30 20 Table 4.1: Project Cost Summary by Component Components/Activities US$ Million UA Million FE LC Total FE LC Total A. Enhancement of Procurement Reforms B. Capacity Building C. Upgrading the Procurement Information System D. Project Management Base Project Cost Physical Contingency (10%) Price Escalation (5%) Total Project Cost Table 4.2 provides project cost estimates by category of expenditure. Category Goods Consulting services Logistic facilities Total Base Cost Contingencies Table 4.2: Project Category of Expenditure UA Million FE LC Total Total cost Sources of Finance and Expenditure Schedule The project will be financed (Table 4.3,) by an ADF grant (technical assistance) of UA 5.66 million (89%), and COMESA, with an amount of UA 0.70 million (11%). The ADF grant resources will be utilised in accordance with ADF-X Financing Policy Guidelines. This means that the grant will not be used to finance activities in RMCs not eligible for ADF-X resources. COMESA has a budget allocation, namely Donor-sponsorship, which is used to provide its contributions towards project costs that are co-financed by cooperating partners. COMESA provided 9.1% of the total cost of the PPRP (excluding utilities and office space). Source ADF COMESA Table 4.3: Financing Plan In Million UA FE LC Total % 89% 11% Grand Total % The overall expenditure schedule by source of finance is presented in Table 4.4. Source Table 4.4: Expenditure Schedule by Source of Finance In Million UA (In Million UA) Total ADF COMESA Total Costs

31 The expenditure schedule by components is illustrated in Table 4.5. Table 4.5: Expenditure Schedule by Components Implementation Total A. Enhancement of Procurement Reforms B. Capacity Building C. Upgrading the Information System D. Project Management Total Costs Annual Disbursement 20% 30% 30% 20% 100% 5. PROJECT IMPLEMENTATION 5.1 Executing Agency The COMESA Secretariat will be the Executing Agency of the project. The Assistant Secretary General (Programmes) of the Secretariat will have the overall responsibility of implementing the project. The Secretariat has valuable experience in implementing the Bank Group funded projects, including the completed PPRP and those financed by other cooperating partners. The Bank Group co-operation with COMESA is presented in Annex Institutional Arrangements Project Steering Committee: A Project Steering Committee (PSC) chaired by the Assistant Secretary General (Programme) of COMESA was established under the PPRP, whose objective was to provide strategic and policy guidance for the implementation of the project. The same Committee will continue to oversee the implementation of the EPRCP. The Members of the Committee are the Assistant Secretary General of COMESA, as its Chair and the Project Manager as its Secretary (ex officio). Other members include the Director for Legal and Institutional Affairs and Project Coordinator; the Director for Trade, Customs and Monetary; the Director for Information Technology; the Chief Technical Cooperation Officer; as well as three (3) representatives of National Procurement Agencies (2 Government and 1 Private Sector) from the COMESA Member States. The draft terms of reference of the Committee are presented in Annex Project Coordinator: The Director of Legal and Institutional Affairs of COMESA has been the Project Coordinator of the PPRP and will continue to be the Project Coordinator for the proposed EPRCP. The Coordinator will supervise the Project Manager, and will also be the link between the project, the Steering Committee and the Bank Group. In recognition of COMESA s efforts in reforming the public procurement systems in its Member States, the COMESA Director for Legal and Institutional Affairs was appointed in 2004 by the United Nations Commission on International Trade Law to participate in the UNCITRAL Working Committee on Public Procurement. The responsibility of the Committee is to review and update the existing UNCITRAL Model Law on Public Procurement Project Implementation: The services of the Project Manager, who was hired to manage the PPRP, will be continued for implementing the proposed EPRCP. In addition, the project will recruit a Procurement Expert. The Project Manager will administer the day-to-

32 22 day activities and the implementation of the project. The Manager shall report to the Project Steering Committee, through the Project Coordinator. The Procurement Expert, who will provide additional technical support to the Project Manager. The draft terms of reference for the Project Manager and Procurement Expert are presented in Annex 13. COMESA will provide counterpart staff, which is made a condition under the Grant Protocol Agreement. The counterpart staff will work full time with the Project Manager, which will help to ensure that the procurement reforms are sustained beyond the project completion. 5.3 Project Implementation Schedule The project will be implemented over a period of four years. The schematic diagram of project implementation methodology and implementation schedule is presented in Annexes 14 and 15, respectively. The main activities are summarized in Table 5.1. Table 5.1: Summary of Project Implementation Schedule 1. EPRCP Approval by the ADF Board July General Procurement Notice August Entry into force of Grant October Recruitment of Consultants Apr Dec Preparation of Work programme Jan Mar Awareness and Sensitisation programme Apr Jun Support to national Policy and Legislative Reforms Apr 07 Oct Development of Training Systems Feb 07 Mar Upgrading of Procurement Information Systems May 07 Apr Independent Review of Training System by Experts Feb Regional Workshop to Review Training Strategies April Reproduction and binding of Training material May- June Regional W/Shop to Review Procurement Information Systems May Capacity Building in COMESA Jul-07 Mar Business Opportunity Seminars Oct 08-Dec Mid-Term Review by AfDB Mar Review by Technical Committee of Procurement Experts July Preparation of Project Completion Report Nov End of Project Implementation Sept Project Closed Dec Procurement Arrangement Procurement of goods, and acquisition of consulting services to be financed by ADF will be in accordance with the Fund s Rules of Procedures for Procurement of Goods and Works or, as appropriate, Rules of Procedure for the Use of Consultants, using the relevant Bank Standard Bidding Documents. Procurement arrangements are summarised in Table Consulting Services and Training: Individual consultants will be recruited for the two assignments of the project, viz. (i) Awareness and sensitisation on the modern public procurement framework; and (ii) Policy and legislative development. One consulting firm will be recruited for two assignments, viz. (i) Capacity building in public procurement; and (ii) Development of Procurement Training Systems. A second consulting firm will be recruited for the Information Technology, with regard to enhancement of the COMESA web site. The selection procedures will be based on the technical quality with price consideration.

33 23 The Project Manager for the PPRP was recruited following a shortlist of individual consultants, in line with ADF procedures. His performance has been highly satisfactory. Consequently, the Project Manager (together with the two support staff, who were all recruited under the PPRP), will be retained for the proposed EPRCP. Table 5.2: Procurement Arrangements for ADF Components (In Million UA) Category Shortlist NCB Other* Total 1. Consulting Services: 1.1 Project consultancies 1.1 Project Audit 1.2 Project management services 3.26(3.19) 0.03(0.03) 0.64(0.64) 3.26(3.19) 0.03(0.03) 0.64(0.64) 2. Goods: 2.1 Equipment and furniture 2.2 Project vehicle 0.03(0.03) 0.02(0.00) 0.03(0.03) 0.02(0.00) 3. Logistic Facilities 3.1 Office space & utilities 3.2 Operating costs 3.3 Travel Costs 3.4 Local Staffing 3.5 Workshops 0.04(0.00) 0.08(0.00) 0.96(0.85) 0.37(0.11) 0.93(0.81) 0.04(0.00) 0.08(0.00) 0.96(0.85) 0.37(0.11) 0.93(0.81) Total 3.29(3.22) 0.05(0.03) 3.02(2.41) 6.36(5.66) Figures in brackets are amounts financed by ADF. * Other includes National Shopping, and Direct Negotiations Procurement of short-term training facilities for individual or groups of individuals will be based on direct negotiations with specialised and reputable institutions acceptable to ADF. Procurement of short-term consultants for translation, interpretation and conference services will be made through shortlists of individual consultants to be selected from COMESA database. Project annual audit services will be procured through shortlists. The selection procedure will be based the comparability of technical proposals and selection of the lowest financial offer Logistic Facilities: The project will be provided with the following items: office equipment, including IT equipment; a set of special library type filling boxes; and one 4x4- project vehicle (by COMESA). These goods will be procured through National Shopping and advertising will be made in all the Member States of COMESA COMESA Secretariat Procedures and Regulations: The procurement rules and regulations of the COMESA Secretariat (adopted by the COMESA Council of Ministers in December 2005) have been reviewed and determined to be acceptable Executing Agency: The COMESA Secretariat will be responsible for the procurement of goods and services under the project. The resources, capacity, expertise and experience of the Secretariat are adequate to carry out procurement General Procurement Notice: The text of a General Procurement Notice will be agreed with the COMESA Secretariat during negotiations and issued for publication in Development Business, upon approval by the Board of Directors of the Grant Proposal.

34 Review Procedures: The following documents are subject to review and approval by the Fund before promulgation: (i) specific procurement notices; (ii) invitation letters to consultants; (iii) evaluation reports on consultants proposals comprising recommendations for contract award; (iv) draft contracts, if those included in the RFPs have been amended. 5.5 Disbursement Arrangement The grant resources for acquisition of two consulting firms that will provide the services mentioned in Section 5.4 would be disbursed by direct payment method. The resources for the individual consultants and other components and activities of the project financed by AfDB will be disbursed through the Special Account method COMESA Secretariat will open a Special Account for foreign currency in a bank acceptable to the ADF. The Special Account will be used to deposit part of the grants resources to finance eligible expenses. The Bank Group will replenish the Special Account from time to time upon justification of utilisation of the previous transfers by at least 50%. The opening of the Special Account will be a grant condition precedent to first disbursement. COMESA should ensure that an internal control practice with an adequate accounting system should be established for the project. Before releasing of the initial advance, an action program for the implementation of eligible expenses with establishment of an adequate accounting system should be submitted to the Bank and for further disbursements COMESA Secretariat should provide the Bank evidence of the adequacy of the accounting system with an external auditor certifying compliance with the Bank s rules and regulations applicable to the expenses paid through the initial advance or subsequent replenishments. COMESA utilised the Special Account method quite well during the implementation of the PPRP. 5.6 Monitoring and Evaluation The Bank Group will monitor the project implementation very closely. COMESA will submit to the Fund quarterly progress reports covering all project activities including procurement, and financial summary report. The reports will also provide updated information on project implementation. Every six months, the progress report will be extended to include, in addition to covering regular project activities, a detailed review highlighting the project implementation performance, results achieved by the project, as well as key issues affecting the project and recommendations to address them. In addition, the Bank will carry out field supervision twice a year. COMESA will have in place appropriate mechanism for collection of data and information with which to measure and monitor component outputs and achievements for comparison with targets and estimates similar to that put in place under the PPRP. The information will be included in the progress report. COMESA performed very well under the previous project, whereby quarterly reports were submitted to the Bank Group regularly and on time. 5.7 Financial Reporting and Auditing The project s transactions will be managed within the existing set-up at COMESA Secretariat. The Assistant Secretary General will assume the overall responsibility for the project funds. The Secretariat maintains its accounting records through a computer system, called Sun System. The accounts for projects (including the completed PPRP) implemented by the Secretariat are maintained using the same system, with some reports being prepared using computer spreadsheets as required by the donor agencies. COMESA Secretariat s Director of Finance will be responsible for the project accounts. COMESA has well

35 25 documented financial rules and regulations (purchases and procurements, maintenance of assets, financial management, and internal audit). COMESA has a comprehensive Financial Manual (approved in 2000), which covers several areas including standards of conduct, revenue management, supplies management and cash accounting As it was the case for the PPRP, the project accounts will be audited by an independent auditor according to international standards. The audit will cover the project accounts and records, as well as the Special Account, compliance with financial and legal covenants under the Grant Protocol, and all procurement activities together with Statements of Expenditure. The audit report will be submitted to the ADF within six months after end of each financial year. COMESA produced on timely basis all the three required annual audit reports for the PPRP, all of which were found to be satisfactory. All the audit reports confirmed that the project was implemented in accordance with the agreed objectives. 5.8 Aid Co-ordination As stated in Section 2.3, COMESA signed an Agreement with the EU to finance the Regional Integration Support Programme. The Agreement is for a total grant amount of EUR 31 million provided as a budget support over a five-year period. COMESA became the first African organisation to receive direct budget support from the EU, instead of the usual project based finnancing. The Bank Group will collaborate with COMESA and EU on this operation and benefit from the experience of financing regional operations through budget support In addition, in February 2006, the World Bank agreed to provide support to COMESA in the following areas: (i) studies related to the institutional and administrative requirements of the Customs Union; (ii) capacity building in trade policy analysis and IT research tools; and (iii) some infrastructural projects. The two institutions also agreed to consider whether in light of the proposed support by the AfDB under the EPRCP, there would still be a need to support COMESA in its efforts of enhancing public procurement reforms in its Member States. The Bank Group will work closely with COMESA and the World Bank is assessing further needs that might be required to enhance the procurement reforms Finally, in recognition of the work done by COMESA in Public Procurement Reform, the COMESA Director for Legal and Institutional Affairs was appointed in 2004 by the UNCITRAL Working Committee on Public Procurement which is reviewing the existing UNCITRAL Model Law on Public Procurement to update it and incorporate where necessary aspects on Electronic Procurement or E-Government. The Bank Group was represented at the first Working Group as an observer. The design of the PPRP as well as the COMESA Directive relied on the UNCITRAL Model, which many developing countries (including Ethiopia, Kenya, Madagascar, Malawi and Uganda) have used to reform their public procurement systems. 6. PROJECT SUSTAINABILITY 6.1 Recurrent Costs The project aims at establishing public procurement systems, which will be managed by local and central governments. Therefore, the maintenance of the procurement systems to be established by the project will be supported by government budgets.

36 Project Sustainability Actions to create the capacity to sustain good procurement practices in COMESA have been mainstreamed in the project. They include (i) Creating IT and human capacities at the COMESA Secretariat to monitor and support good practices in COMESA; (ii) Formation of the Technical Committee of Procurement Experts (TCPE) as an organ of COMESA; and (iii) Routine monitoring of public procurement practices in the Member States by the COMESA public procurement team. Furthermore, during the implementation of the EPRCP, the project implementation team will liase with donors and Member States to encourage all Member States to embark upon capacity building programmes for the national public procurement agencies, to create effective structure to internalise and operationalise the gains from this project. In addition, in order to retain the experience and knowledge gained from the EPRCP within COMESA, it will be a requirement to have a full time expert to work with the Project Manager, which will be made a condition under the Protocol Agreement. 6.3 Critical Risks and Mitigating Measures One of the risks identified during the preparation of the previous project (the PPRP) was that there would be a lack of commitment on the part of governments to implement the reforms in public procurement. The original perception was that the risk of commitment of COMESA member States to national procurement reforms was small in view of the fact that the project concept originated from the collective decision of the Member States to implement procurement reforms. The situation now, after completing the PPRP, has improved further. There is a definite show of political will to reform even from the Member States that have not yet started the reform process. The stamping out of corruption is being spearheaded right from top in a few leading Member States (Kenya, Zambia and Malawi are but a few examples) and thereby sending the right signals on reform in public procurement which relies very much on transparency and accountability for effective delivery. Further sensitisation at high level under the proposed EPRCP will also help to reduce the risk Disparities in standards of public procurement: Generally, old and outdated procurement systems exist in most Member States and even in the few countries, where modern procurement systems exist, there are significant disparities. There is therefore a need to upgrade old and outdated procurement systems to bring them at the same level as those that are more advanced and to harmonise the procurement systems in line with the COMESA Procurement Directive There are low human capacity levels in governments, which could affect future capacity building strategies to be developed under the future projects. Under the EPRCP, a large budget for training at national level has been provided for under the proposed project Limited higher institutions of learning: It was discovered that, among the several universities and institutes within the region, none of them offered courses on procurement. COMESA plans to work with various training institutes in the region, including universities, national and regional institutes to introduce the subject in their syllabuses. A regional workshop for these institutions will specifically be held to sensitise them. The training materials to be developed under the EPRCP will go a long way to solve this problem.

37 27 7. PROJECT BENEFITS 7.1 Economic and Institutional Benefits The proposed project will strengthen the capacity of the COMESA Secretariat as well as that of procurement agencies in Member States in the area of procurement. Modernising and maintaining good public procurement systems is an ongoing and complicated process that requires the availability of human resources with sufficient capacity and adequate skills. Training activities, workshops and seminars that will be organised within the framework of the project will help to raise procurement skills and standards in the COMESA Secretariat as well as in national procurement agencies in the region. This will lead to improved capacity within COMESA in the area of procurement, and ensure that the reform process will be efficiently monitored and managed and that new procurement systems that will result from the reforms will be properly maintained and implemented As stated in Paragraph 4.1.7, the proposed EPRCP is situated within the Bank Group's efforts to contribute to institutionalisation of good governance in RMCs and seeks to exemplify this in the area of public procurement. Good governance, which promotes accountability, transparency, rule of law and participation, is central to creating and sustaining an enabling environment for development. Poor governance has proved to be particularly damaging to the effective economic and social development. Programmes for poverty alleviation and health, for example, have been undermined by a lack of public accountability and corruption. In summary, poor governance wastes government revenues and deters investment flows, and therefore undermines economic growth. By helping to modernise and improve procurement systems in COMESA Member States, the EPRCP will contribute to increase accountability and transparency in public procurement and create an enabling legal infrastructure in public procurement in these countries. The project is expected to contribute to efforts by COMESA States to improve management of public resources and enhance service delivery in order to achieve great value for money. Strengthening efficiency and increasing transparency in procurement Member States will generate budgetary savings and lead to a more effective use of public funds. It is also expected to lead to increased confidence and trust of the civil society towards governments in the region, particularly with regard to their credibility and commitment to development. This is particularly important given that in some countries of the region the perceived lack of transparency in procurement and the existence of corruption have undermined the authority of governments. By helping COMESA Member States to improve their procurement systems, the Bank Group will therefore be helping to enhance conditions for economic growth in the region Strengthening efficiency in procurement will also contribute to improving the environment for private sector activities in the COMESA region. A government s most direct impact on private sector is through its procurement behaviour. In the majority of RMCs, the government is often the largest purchaser of goods and services. The way it manages its commercial relationship with the business community has an influence on the behaviour and dynamism of the private sector. Sound procurement systems promote competition, minimise possibility for corrupt practices and reduce the cost of doing business. In this context, the EPRCP will have a positive impact on the participation of the private sector in economic activity in the COMESA region. It will contribute to create a more transparent environment for business transactions and investments and help to attract more investments in the region by reducing transaction costs and lowering risks. It will help to expand market opportunities in the region and enhance competition among private sector operators.

38 Further, modernisation and harmonisation of procurement systems will enhance economic integration in COMESA through increased intra-regional trade. The EPRCP will help to stimulate trade within COMESA States, thereby helping to integrate the economies of the Member States. 7.2 Social Benefits Reforming public procurement systems in COMESA Member States forms an important component of the poverty reduction strategy of the Bank Group in RMC s as it impacts on the issue of good governance and efficient and equitable utilisation of scarce resources. Some countries, such Ethiopia and Rwanda, with low level of corruption, are utilising the available resources effectively to finance social development projects to combat poverty. The proposed EPRCP aims at ensuring more trade within COMESA countries, access to procurement opportunities to a wider population group, efficient and optimal use of resources, and elimination of corrupt practices. The successful implementation of the project will go a long way in helping the governments of Member States to curb poverty, by minimising waste through anti-corruption practices and by increasing trade within COMESA In line with articles 154 and 155 of the COMESA Treaty, and also in recognition of the fact that sustainable economic and social development of the region requires the effective participation of women, men and the youth, the COMESA Gender Policy advocates for equal and full participation of women in all aspects of COMESA activities and other operations taking place in the region. In order to promote efficient and effective implementation of the gender strategy and to adopt a coordinated and systematic approach to gender issues in the procurement process, the project will adopt a mainstreaming approach when selecting trainees from the national procurement agencies and the private sector to participate in procurement workshops and training seminars. The private sector seminar sub-component, in particular, will help to increase the awareness of women in business in the Member States. 8. CONCLUSIONS AND RECOMMENDATIONS 8.1 Conclusions The procurement reform process in the Member States of COMESA has started off well with the pioneering project (the PPRP) helping to kick-start the process with the Procurement Directive. The Directive, which is binding to all its Member States, has had a good impact as the countries are now sufficiently conscious on the need for reform. Three countries (Malawi, Madagascar and Uganda) have passed the necessary legislation on public procurement. In addition, the Baseline Data Diagnostics Survey report on procurement is available for use by the development partners. Any development partner wishing to directly assist an RMC in the area of public procurement reform could utilize the Baseline data as the starting point to prepare and develop its proposal The proposed EPRCP will reinforce the implementation of the reforms that have been agreed upon by COMESA Member States through the Directive. The project will lead to wider development objectives, such as: (i) promoting better governance under the principles of economy, efficiency, non-discrimination, transparency and accountability in public procurement; (ii) enhancing regional integration by increasing intra-regional trade among the Member States through harmonised procurement systems; and (iii) boosting economic growth and social progress through improved business environment. The contribution to increased intraregional trade will be visibly felt when member governments begin to apply the regional

39 29 competitive bidding mode of procurement on tenders above certain thresholds. The winning regional suppliers on such tenders will create the much-needed impact on trade, with the spin-off effect of increased industrialisation as suppliers construct back-up facilities Above all, in the context of the current trend toward the utilisation of country systems, the reform of public procurement will prove to be crucial, and timely. In assisting in the modernisation of the public procurement system of both COMESA and WAEMU (consisting of 53% of RMCs), the project will have a major impact on other projects financed by the Bank Group and other development partners in future. The project will pave the way for the utilisation by development partners (including the Bank Group) of national procurement systems, which will facilitate the implementation of projects financed by them. 8.2 Recommendations Based on the foregoing, it is recommended that an ADF grant not exceeding UA 5.66 million be provided to COMESA for the purposes stipulated in the report. The legal framework that will govern the grant will be embodied in the Grant Protocol that will be signed between the Fund and COMESA. The Grant Protocol will reflect customary terms and conditions as well as specific conditions including: A. Conditions Precedent to Entry into Force of the Grant: The Protocol of Agreement shall enter into force upon signing by the Recipient and the Fund. B. Conditions Precedent to First Disbursement: The obligations of the Fund to make the first disbursement shall be conditional upon the entry into force of the Protocol of Agreement and the submission by the Recipient of evidence, acceptable to the Fund, that the Recipient has: Opened a Special Account into which part of the Grant shall be deposited (Section 5.5). C. Other Condition The Recipient shall provide evidence to the Fund by 31 January 2007 that one counterpart staff with qualifications and experience acceptable to the Fund has been attached to the project on a full time basis until the project is completed (Section 5.2).

40 COMESA EPRCP Map of COMESA Member States and Project Area Annex 1 TUNISIA MOROCCO Canary Islands LIBYA ALGERIA EGYPT Cape Verde Is. MAURITANIA MALI NIGER CHAD SUDAN ERITREA GAM BIA GUINEA BISSA U SENEGAL GUINEA BURKINA BENIN NIGERIA DJIBOUTI SIERRA LEONE LIBERIA COTE D IVOIRE GHANA TOGO CAM EROON CENTRAL AFRICAN REP ETHIOPIA EQ. GUINEA KENYA Sao Tome & Principe GABON RWANDA D.R.CONGO BURUNDI TANZANIA SEYCHELLES COM OROS ANGOLA ZAM BIA M AURITIUS ZIM BABWE NAM IBIA BOTSWANA SWAZILAND LESOTHO SOUTH AFRICA COMESA Member countries are indicated in colour This map is provided by the African Development Bank exclusively for the use of the readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank and its members any judgement concerning the legal status of a territory nor any approval or acceptance of these borders.

41 Introduction COMESA EPRCP Performance of the Public Procurement Project Annex 2 1. In 1999, the Bank received a request from COMESA for assistance in the implementation of the Public Procurement Reform Project (PPRP) in COMESA. Following the receipt of this request, and following a project identification and appraisal missions undertaken in February 2000 September 2000 respectively, the Bank Group approved the Public Procurement Reform Project in May 2001 which then commenced operations in May The PPRP has been successfully implemented and was completed in December The PPRP Objective 2. The general goal of the PPRP was to promote good governance through transparency and accountability in public procurement. The specific objective of the PPRP was to reform public procurement laws, regulations, procedures and practices in COMESA with a view of (i) harmonising public procurement rules, regulations and procedures through a COMESA Directive on Public Procurement; (ii) improving national procurement systems and strengthening the capacity of COMESA Member States in public procurement; and (iii) encouraging more awareness of procurement opportunities in COMESA. The PPRP Activities 3. The implementation process went down quite well, with no material deviation from the initial action plan. The first major task of the contracted consulting firm was to undertake a baseline data Diagnostics survey for the 20 Member States of COMESA. The exercise, which was commenced in July 2002, was completed in five months and a report highlighting the status of the public procurement laws and regulations was presented to the first stakeholders forum, which was held in Nairobi, Kenya in December A report providing a draft framework for modern public procurement system for the COMESA region was then presented to a second Stakeholder forum held in Addis Ababa, Ethiopia in March Delegates made various recommendations, which were then presented to the COMESA policy organs, culminating in the passage of the Directive by the COMESA Authority of Heads of States and Government at its eighth summit at Khartoum, Sudan, in March The implementation phase that covered the period May 2003 to November 2004 worked on three distinct but related components. Firstly, on legislative reforms, the project embarked on an awareness campaign encompassing missions to Member States that involved short but effective one day Workshops meant to sensitise the public and private sectors on the need for reform, with the objective of achieving total compliance to the COMESA Directive on public procurement. Secondly, the project embarked on regional capacity building workshops that had a strong Training of the Trainers (TOT) component and covered a number of areas ranging from an appreciation of the regional procurement reform process to a full understanding of the principles underpinning the modern public procurement reform framework. The first regional Seminar took place in Kampala, Uganda in July 2003 followed by the second regional Seminar that took place in Antananarivo, Madagascar in October/November The third and final Seminar took place in Lusaka, Zambia in February Thirdly, the final activity on the project involved the development of a COMESA Procurement Information System (CPIS) meant to support the dissemination of public procurement opportunities to private sector players in the region. At the core of the systems lies the procurement Website that will drive the regional procurement system. Development started off with a prototype that has since been further developed to a fully functional Website that was presented for launch at the CPIS seminar held in Lusaka, Zambia in December Summary of the PPRP Outputs 6. The outputs of the PPRP were (i) Baseline Data Diagnostics Survey report, (ii) COMESA Public Procurement Framework Directive, (iii) Legislative Reforms in some countries, (iv) Capacity Building (training of trainers), (v) COMESA Procurement Information System, and (vi) Formation of the Technical Committee of Procurement Experts (TPCE). The outputs are briefly explained in the paragraphs that follow. 1

42 7. Baseline data Diagnostics Survey: The first major output under the PPRP was the baseline data Diagnostics Survey report. The purpose of the survey was to obtain an objective assessment of prevailing procurement laws, regulations and practices guiding the procurement processes in each of the 20 member States of COMESA. That task was carried out by a consulting firm, namely, the International Law Institute of Uganda (ILI), under the guidance of the Project Implementation Team at the COMESA Secretariat. The report highlighted, among other things, the status of public procurement laws, regulations and procedures in the Member States and the organizational arrangement under which they were practiced. A stakeholders forum was held in December 2002 to discuss the Baseline data report and to set in motion the reform process. 8. COMESA Public Procurement Framework: The second output of the project was the passage of the COMESA modern public procurement Directive by the COMESA Authority of Heads of States and Governments in March The Directive was that Public Procurement Reform in COMESA should best be attained through: (i) the adoption of modern national legislation on public procurement where it does not exist, or the improvement of national legislation where it is outdated; (ii) adoption of the principles and essential components of national legal frameworks for enhancing regional integration; and (iii) establishment of a technical committee on public procurement. The Directive was the landmark event that has led to the current wave of legislative reforms that are taking place in the COMESA region. 9. Legislative Reforms: Since the passage of the Directive in March 2002, a number of Member States have embarked on legislative reforms designed to align their procurement laws and regulations to the COMESA Directive. COMESA now has three Member States with modern procurement laws (Malawi, Madagascar and Uganda), which are inspired by the United Nations Commission on International Trade Law (UNCITRAL) model, as recommended in the Directive. Ethiopia and Kenya were expected to have had new procurement laws by end of DR Congo, Djibouti, Rwanda and Zambia are actively working on programmes to come up with new procurement laws by end of 2006, with a view to ensuring that the draft laws and regulations comply fully with the COMESA Directive. The remaining eight member States are working on kick-starting the reform process. Egypt, Mauritius and Zimbabwe are in a class of their own because currently they have procurement law based along the UNCITRAL model, but what is required is a review and upgrading of the law with a view to making it totally compliant to the COMESA Directive. Greater support, therefore, is required to kick-start the reform initiatives in Burundi, Comoros, Eritrea, Seychelles, Sudan and Swaziland. Angola is still at the basic stage requiring sensitisation. Hence, a case for the proposed EPRCP to work on these countries. The full status on legislative reforms is presented in Annex Capacity Building: Due to limited funding under the PPRP, capacity building activities were confined to regional training Seminars, which had as their emphasis the development of Trainers that would be used to cascade the knowledge and skills on the reform initiative and the public procurement system. The Kampala regional workshop had 35 participants from seven member States - (Egypt (3), Eritrea (3), Ethiopia (4), Kenya (3), Rwanda (3), Uganda (18) and Seychelles (1). The Antananarivo regional seminar had 37 participants from six member States Burundi (3), Comoros (3), Congo DR (3), Djibouti (2), Mauritius (1) and Madagascar (25). Finally, the Lusaka regional seminar had 29 participants from five member States Malawi (3), Sudan (3), Swaziland (2), Zambia (18) and Zimbabwe (3). The Training of Trainers (TOT) programme has paid off because already some member States are beginning to use some of the participants as resource persons in their national programmes. For instance, Malawi has embarked on a nation-wide capacity building programme in public procurement and the new Trainers, who are the product of the COMESA regional seminars, were the ones in charge of the process. On the way forward, there is a need to increase investment in capacity building at national level, which should be complimented by a new policy thrust for the acquisition of new techniques, skills and knowledge required to perform the procurement in a streamlined and efficient way. 11. COMESA Procurement Information System (CPIS): The Project developed a prototype procurement Website (trial product) that would lie at the core of the COMESA Procurement Information System (CPIS). The procurement Website would be used to collect and disseminate information on public procurement opportunities in the region. The work encompassed enhancing the design features on the various pages of the Website, loading of initial content encompassing model procurement laws from lead Member States and loading samples of bidding documents to be used. The Website will be upgraded under the proposed EPRCP to make it possible to go beyond the mere publicising of the procurement information to performing other advanced features such as e-procurement that requires suppliers to submit bids electronically. 2

43 12. Formation of the Technical Committee of Procurement Experts (TPCE): The project has since put into place a system designed to sustain the public procurement reform initiative and this comes in the form of the Technical Committee of Procurement Experts (TCPE) that had its first meeting in April The TCPE is made up of Heads of national procurement agencies who will be meeting at least once a year to discuss regional procurement issues and strategise on the way forward. The establishment of the TCPE was done in line with provisions of the PPRP that sought to create a permanent institutional structure within COMESA for the purpose of providing continuing strategic guidance to the reform initiative and thereby provide a mechanism for sustaining the reform effort. The committee s main purpose is to provide strategic guidance to the legislative reform process that is taking place in COMESA. Future meetings will discuss some critical issues related to regional procurement thresholds and the establishment of a regional procurement agreement. The TCPE submits its recommendations to the relevant COMESA policy organ bodies for onward policy formulation and endorsement of its decisions. The first meeting of the TCPE made some useful recommendations, which include: (i) Continuous support to Member States to complete the Procurement Reform Process by adopting modern legislation consistent with the COMESA Directive; (ii) Commence negotiations for a Regional Public Procurement Agreement as a precursor to a more active involvement in the multilateral negotiations; (iii) Embark on capacity building for staff on national procurement agencies where the need is absolutely necessary and where reform has been completed; and (iv) Putting into force the use of the COMESA Website falling under the COMESA Procurement Information System. Impact of the PPRP 13. First, Member States are now sufficiently conscious on the need for reform, with a number having passed the necessary legislation that now needs to be fine-tuned to achieve total compliance to the COMESA framework. Second, the training that has so far been given has produced high-level awareness of the modern public procurement reform initiative. In a few member States, Malawi being a good example, the TOT programme is beginning to bear fruit as the Trainers from the COMESA programme are now being utilized by Governments to cascade the procurement knowledge and skills to lower levels under the ongoing national capacity building programmes. Third, The COMESA Website launched in December 2004 is just awaiting implementation at national level. Already there is strong interest from many quarters to see it working so that information on procurement opportunities can be made available to many people at once and in a faster and cheaper way. 14. The PPRP lessons and challenges are outlined in Section 1.2 of the report. Essential Features of the Directive 15. The COMESA Authority, at its eighth summit held in Khartoum, Sudan, on 17 March 2003 agreed on the basic elements for reform of the national public procurement laws and practices and the development of a regional public procurement framework, now referred to as the DIRECTIVE. The DIRECTIVE compels COMESA Member States to reform and modernise their procurement systems within the broader framework of the ongoing regional integration agenda. The DIRECTIVE further provides the four key pillars under which reforms will take place. These are highlighted below: 16. The adoption of modern national legislation on public procurement where it does not exist or the improvement of national legislation where it is outdated: Modern legislation will, inter alia, have the following key features: Decentralisation of procurement activities to line Ministries and other government Institutions. Decentralisation, as opposed to the entrenched but undesirable system of centralised procurement, offers a number of benefits which include (i) faster and efficient procurements backed by deeper product and process knowledge, (ii) reduced corruption in terms of both scale and magnitude when compared to the outmoded centralised system where tenders can be very large and chances of interference from political leadership are high. (iii) close monitoring of contracts; Use of the universally approved United Nations UNCITRAL Model Law on procurement as basis for developing national public procurement laws; Harmonisation of national procurement laws, regulation and procedures with a view to facilitating trade within COMESA; Encouraging increased participation of regional and international suppliers to national Tenders; 3

44 Use of information technology for rapidly dissemination of procurement information and for migration to e-procurement; Use of Standard Bidding documents that are in harmony with modern commercial practices and commercial law. 17. The adoption of the principles and essential components of national legal frameworks as contained in Document No. COM/IC/XV/3(a) for supporting the project: The modern national procurement law for each Member State should seek to achieve the following principles: Economy and efficiency in public procurement; Increased participation and competition in the procurement process; Fairness in the manner in which bidders are treated; Transparency in the procurement process; Accountability of all participants in the procurement process; Participation of Small to Medium Sized Enterprises. 18. The establishment of a technical committee on public procurement; The Technical Committee of Procurement Experts (TCPE) has since been set up the first meeting took place in April The TCPE membership consist of procurement experts of COMESA Member States The first major task for the committee will be the development of a regional procurement agreement, which will contain a set of binding rules on procurement, specifying how Member States are to handle procurements among them, including specifying threshold levels above which tenders will go regional. Regional tenders are expected to promote intra-regional trade and contribute to the enhancement of regional integration. 19. The adoption of the institutional and organizational arrangements contained in document COM/IC/XV/3 Key features under institutional and organisational arrangement are as follows: Setting up of a Procurement Policy Office (PPO). The PPO will be the highest procurement body of government that will be responsible for development of procurement policy, monitoring of procurement standards and capacity building; This replaces the current Central Tender Boards that perform the conflicting functions of policy development, monitoring and management of the tendering process. PPO effectively separates execution from planning and thereby promotes the desired checks and balances; Decentralisation of procurement to lower-level sectoral institutions - away from centralised procurement institutions generally referred to as Centralised Tender Boards; Formation of Bid protest institutions such as Complaints Review and Appeals Boards; Development of internal structures and staffing; Development of linkage mechanisms with government External Auditors under the office of the Auditor General whose task is mainly to conduct ex-post audit; Setting the constitution and parameters for Procurement Committees that will execute procurements at Ministry and Institution levels. Source: Analysis by the Project Team. Information on the Directive is obtained from the Report of the Second Stakeholders forum Addis Ababa, February 2003, named as Document COM/IC/XV/3(a). 4

45 COMESA EPRCP Intra-COMESA trade In USD Millions Annex Imports Exports Imports Exports Imports Exports Imports Exports Angola Burundi Comoros Congo DR Djibouti Egypt Eritrea Ethiopia Kenya Madagascar Malawi Mauritius Rwanda Seychelles Sudan Swaziland Uganda Zambia Zimbabwe , , , , , , , ,705.9 Global Trade 33, , , , , , , ,972.1 As % of Global Total Note: 1. Both Exports and Imports are fob 2. Libya joined COMESA in June Source National Statistical Offices

46 COMESA EPRCP Organisation Structure of COMESA Secretariat Annex 4

47

48 COMESA EPRCP Status of Legislation Reforms as at September 2004 Annex 6 Member State Legislative reform started Comments 1 Angola No No work done as yet requires sensitisation on proposed reform No 2 Burundi No Uses old procurement statute No 3 Comoros No Has neither procurement Law nor procurement regulations The system as it exists today is one, which relies on practices. Procurement is centralized at Ministry of Economy and Finance (MEF), with Ministries managing procurement below certain threshold levels but even then, procurement No 4 Djibouti Starting October 2004 decision is done by MEF. The recent formation of the National Steering Committee marks the beginning of a long reform process in Comoros. It is expected that the first report on diagnostic survey of laws impacting on public procurement should be tabled in September COMESA to guide the reform system and to get involved in capacity building at all levels. Djibouti has a procurement law, which was enacted in 1995, which also sets up an apex body the National Commission on Public Procurement. Further investigation revealed that it acts as another Central Tender Board and does not therefore perform the functions of policy and monitoring body as is required by COMESA. Recent recommendations by World Bank to raise threshold levels for Ministries still fall far short of the COMESA Directives. COMESA mission made a recommendation for overhaul of the procurement law, including total decentralisation of its procurement system. Djibouti is currently poised to begin process of revising its procurement systems work is expected to start in October 2004 with assistance from World Bank estimated at US 400,000. COMESA to make necessary interventions during process. 5 DR Congo Started Still using legislation dating back to There are now serious reforms taking place in DR Congo, with support from World Bank. Reform of public procurement systems started in earnest in February 2003 and is guided by four pillars (i) Legal and Institutional reforms, (ii) Human capacity, (iii) Procedures applicable to the Private sector and (iv) Existence of independent audit measures. So far, a National Commission has been set up to spearhead the reform process. Consultants to help in drafting law target for completion is May Second half year of 2005 will be dedicated to producing law on institutional changes. On capacity building, DR Congo has only USD at its disposal. This is not enough so it has made an appeal to COMESA for assistance on capacity building. COMESA to provide DR Congo with legislations of other COMESA Member States as a starting point in the intervention process, which will ensure that the final product bears the COMESA seal of approval when completed. 6 Egypt No Has Legislation. No indication on commencement of reform. No 7 Eritrea No Eritrea has not yet started the process of reform despite promises made during a 2003 mission that a World Bank funded consultant was to start No work in due course. Reasons given for non-action was Eritrea s preoccupation with enactment of basic laws, a process that should see the country divorcing itself from laws borrowed from Ethiopia. The only activity worthy noting was some ongoing training for staff working on World Bank funded programmes. While no concrete steps have been taken, there is high degree of commitment in government. As a first step to reform, the Government committed itself to setting up a National Steering Committee in due course. The path for reform was clarified during the one day Seminar held in September 2004, which also covered legal and institutional reforms that have been undertaken by other Member States such as Kenya, Uganda, Malawi and Madagascar. 1 Active WB Support Yes Yes

49 Member State Legislative reform started 8 Ethiopia Nearly complete 9 Kenya Nearly complete 10 Madagascar Law is in place 11 Malawi Yes Working on institutional arrangements Comments A revised draft Law has now been finally presented to the Council of Ministers and is expected to be presented to parliament and passed as law before end of year COMESA has had a preliminary review of the law and has raised two issues related to scope of law. Firstly, the proposed law covers only the Federal Government and related Government Institutions with the exception of Parastatals, which are said to be under a different law. A single law is therefore required to simply referencing. Secondly, review of Bidder grievances should be handled by a separate body to the Public Procurement Agency (PPA). PPA should only be responsible for policy formulation and monitoring. The draft law published in year 2003 went through a lapse phase but was resuscitated in 2004 with modifications, following inputs from two National Stakeholders workshops held in the first half of One major addition was inclusion of provisions for protection of SME s and also other provisions meant to achieve total compliance to the COMESA Directive. As of end of August, the draft bill was in the office of the Minister of Finance awaiting publication in September 2004 and eventual tabling in Parliament later during the year. In the meantime, there is a consultant working on procurement regulations but under a very tight deadline. It is expected that the new Act and the regulations will have the same commencement date. It is expected that the new law will be tabled before end of year. Procurement Law promulgated mid-2004 following the work of two World Bank funded consultants who together with Malagasy officials made it possible to table a draft code in April What is now awaited is detailed regulations for operationalising the code target is March Terms of Reference have already been prepared and advertising for the consulting work was expected soon. Funding has also been promised from ADB and others. COMESA to make detailed study of the new law after translation from French to English has been done. So far, all main features of the COMESA directive seem to have been addressed in the new law. Procurement Law enacted July Implementation deferred due to delayed promulgations of regulations and delayed staffing of the policy and monitoring body office of the Director of Public Procurement. COMESA has done a preliminary review of law and has established what needs to be added in future as follows: - provisions for disposal of assets and BOT arrangements. Concern raised on inadequate appeals and review mechanism. Active WB Support No Yes Yes CPAR 2002 CPAR Mauritius Yes Undertaking a review of their year 2000 Law. COMESA to undertake Mission to check compliance. No 13 Rwanda Yes Latest draft prepared 2003 awaiting parliamentary action. Also awaiting No COMESA review to check compliance. 14 Seychelles No Needs COMESA intervention. No 15 Sudan No COMESA to assist in kick-starting the reform process. Currently using 1994 Decree under which the procurement system was decentralized. The Decree applies to the Central Government and enterprises, which are wholly owned by the state. No 16 Swaziland No Still using financial regulations. COMESA to follow up. No 17 Uganda Yes Legislation enacted January 2003 Yes 18 Zambia No Reform underway to modernise/decentralise procurement from Zambia National Tender Board. ADB funded consultants to start work of drafting the new procurement law in due course. Yes CPAR Zimbabwe No Internal consultations taking place to modernise procurement law. Currently using procurement legislation enacted in 1999 (2/99) 20 Libya No Libya joined COMESA in June 2005 No Source: COMESA Secretariat No Yes 2

50 COMESA EPRCP State of Awareness of Procurement Reforms in COMESA Annex 7 1. Angola: Awareness of COMESA procurement is still at its lowest given the country s recent emergence from conflict. The country will require a major awareness and sensitisation effort to bring it into the fold of active COMESA Member States; 2. Burundi: Awareness of reforms low and is presently limited to a few officials who have consistently attended COMESA Seminars and training workshops; 3. Comoros: Awareness is still very low. A workshop undertaken on 4 September 2004 managed to attract 28 participants from various key ministries who all, with the exception of two participants from a previous COMESA training programme, admitted that they had heard of the COMESA reforms in public procurement for the first time. There was no private sector attendance as this would have swelled participation beyond project budget. Due to the relatively low backward state of reforms in this country, more work needs to be done. The major weakness that needs addressing is lack of capacity and lack of political will to change. At end of mission, Comoros agreed to officially appoint a Project Steering Committee, draft necessary procurement law, regulations and procedures; 4. Djibouti: Awareness only limited to some Members of the twenty-man supreme procurement body the National Commission for Public Procurement. A half-day workshop held on 14 September 2004 managed to spark some light on reforms but it requires more follow-up programmes for it to have visible and sustained impact. At end of mission, Djibouti agreed to pursue its programme of reform in the light of the COMESA Directive and also to endeavour to build its human capacity which had been identified as being very low; 5. DR Congo: Government now has limited awareness of procurement reforms following the launch of the World Bank funded project. A half-day workshop held on 23 September 2004 helped to highlight the need for DR Congo to factor into the reform process underway, provisions of the COMESA Directives; 6. Egypt: Level of Awareness is still relatively low and is limited to few government officials who have attended COMESA Seminar and meetings; 7. Eritrea: Awareness still at its lowest despite missions to the country. A half-day workshop undertaken on 10 September 2004 yielded additional understanding on thrust required in implementing COMESA reforms. Despite high level attendance from the Eritrea government in the form of Director-General, Treasury in Ministry of Finance and Director in Ministry of Justice, reforms are still moving at a small pace requiring therefore massive investment in terms of sensitising further the some senior government officials, notwithstanding the country s preoccupation in the border disputes; 8. Ethiopia: Level of awareness is high but may need extending to the private sector; 9. Kenya: Level of Awareness is high; 10. Libya: Low level awareness (new member joined 3 rd June Madagascar: Level of Awareness is high but may need extending to the private sector; 12. Malawi: Level of awareness is high; 13. Mauritius: Level of Awareness is not widespread and is currently limited to members in the Central Tender Board. More effort is required to make the reform national; 14. Rwanda: Some measure of awareness is there but more is required to push the reforms through; 15. Seychelles: Awareness is low and is limited to very few government officials; 16. Swaziland: Level of Awareness is low; 17. Sudan: Level of awareness of below high and at present is insufficient to push the reform process forward; 18. Uganda: Level of Awareness very high; 19. Zambia: There is a measure of awareness but the country needs further prodding to ensure total decentralization of its procurement systems. 20. Zimbabwe: Level of Awareness is below high more needs to be done. 1

51 Profile of COMESA Member States on specified expenditure items: Country 1 Countries targeted for Awareness and Sensitisation 2 Non ADF classified countries (COMESA Budget) 3 French Speaking countries requiring Translation 1 Angola * 2 Burundi * * 3 Comoros * * 4 DR Congo * * 5 Djibouti * * 6 Egypt * * 7 Eritrea * 8 Ethiopia 9 Kenya 10 Libya * * 11 Madagascar * 12 Malawi 13 Mauritius * * 14 Rwanda * * 15 Seychelles * * 16 Sudan * 17 Swaziland * * 18 Uganda 19 Zambia * 20 Zimbabwe * Source: COMESA Secretariat 2

52 COMESA EPRCP Bank Group Collaboration with COMESA Annex 8 1. A cooperation agreement between the Bank and COMESA was signed in 1999, to mutually promote activities targeted at economic integration and development in the COMESA region. The main areas of cooperation in the Agreement are i) trade and industry, ii) investment promotion, monetary harmonization and development of finance, iii) infrastructure and services, iv) food security, land and agriculture, v) human resource development, vi) natural resources and environment, and vii) other areas as may be agreed upon between the two parties. Within this cooperation framework, the Bank has supported fisheries and irrigation development studies, institutional support for private investment promotion, agricultural marketing promotion and regional integration, and public procurement reforms in Member States. 2. Agricultural Marketing Promotion and Regional Integration Project (UA 3.8 million) The project focuses on the provision of accurate agricultural marketing information among Member States and will, therefore, establish the COMESA-wide Food and Agricultural Marketing Information System (FAMIS). The second component of the project involves harmonization of sanitary and phyto-sanitary (SPS) measures across the region, in order to reduce the incidence of SPS measures being used as non-tariff barriers to trade. The third component deals with HIV/AIDS prevention through information, education and communication (IEC) methods. The implementation of most project activities is generally satisfactory. 3. COMTEL Project: (US$ 500,000). The project involves establishment of a regional terrestrial telecommunications network linking telecommunication operators in the Eastern and Southern Africa region. The objective of the COMTEL project is to improve telecommunication inter-connectivity within the region and making the local, regional and international telephone calls more affordable. The plan is for regional telecommunications network to be built and managed by COMTEL Communications Limited, a company owned by all telecommunications operators within the region. In view of the need to involve the private sector in the development of the project, the COMTEL project was designed to be implemented as a Public - Private Partnership. In this regard, a strategic equity partner was to be engaged in the project to assist in development, implementation and commercial operations. The Bank provided a grant of USD 500,000 for the project to co-finance the initial due diligence work. COMTEL is in the process of appointing strategic equity partners. 4. International Comparison Program: (US 4.0 million) COMESA is coordinating the Bank s International Comparison Program in 10 COMESA Member States, namely Burundi, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Rwanda, Sudan and Uganda. As of February 2006, all participating countries have been collecting price statistics and transmitting these data to the Bank for the computation of purchasing power parities. The key role played by COMESA in programme is management of project finances, training and monitoring participating Member States on behalf on the Bank. 5. Others: there are five other projects that were supported by the Bank Group, in cumulative total amount of US$ 4.5 million, and have successfully been completed: (i) Establishment of a COMESA Project Pre-investment Unit; (ii) Second Roundtable Forum for Women in Business (1993); (iii) Feasibility Study on Interconnectivity of Telecommunications; (iv) Fisheries Development Project; (v) Public Procurement Reform Project and (vi) Study on Irrigation Project. Source: COMESA Secretariat and AfDB 1

53 Annex 8 COMESA EPRCP Bank Group Collaboration with COMESA Summary of Ongoing Projects as at 29 May UA million PROJECT APPROVED SIGNED EFFECTIVE SOURCE AMOUNT DISBURSED UNDISBURSED DISBURSEMENT DISBURSEMENT DEADLINE Ratio(%) 1 Agricultural Institutional Strengthening and Marketing Promotion project 24/03/04 01/07/04 21/02/05 ADF /12/08 2 Statistical Capacity building ICP -Africa 08/09/04 12/10/04 09/03/05 ADF /12/07 3 COMTEL 12/ NEPAD-IPPF /12/07 NOTES: (i) The Statistical Capacity Building programme ICP Africa is a component of a wider programme covering also countries outside COMESA. The approved grant for the overall programme is UA million. 2

54 COMESA: EPRCP Detailed Project Description Annex 9 Project Components 1. The project consists of four principal components as follows: (i) Component A Enhancing Procurement Reforms; (ii) Component B Capacity Building; (iii) Component C Upgrading the Procurement Information System; and (iv) Component D Project Management. Component A Enhancing Procurement Reforms 2. A1 Awareness and Sensitisation on the Modern Public Procurement Framework: Sensitisation under the PPRP at national level had been confined to a few public sector officials that participated in three regional seminars and a few local workshops. The PPRP only financed a few missions to Member States. These provided some information that included assessment of obstacles that were likely to affect the reform process at a national level. Therefore, Sub- Component A1 will help to deepen and broaden the awareness and sensitisation programme and ensure that it reaches all stakeholders. It is also vitally important that the private sector, as the supplier of government requirements, be associated with the reform process at an early stage so as to enable it to respond to the challenging environment under which it will operate. The Purchaser and Supplier, being two side of the same coin, need to have precisely the same understanding regarding strategic direction of the reform process and the elements contained therein in order to ensure harmony. This private sector dimension will be realized through the process of engaging the various private sector organized structures at both national and regional levels. The public sector will be further sensitised on the need for the formation of National Steering Committees whose main function will be to spearhead the reform process. 3. The output of Sub-component A1 will be a private sector that is aware of the principles and workings of the national and regional public procurement system. The success of this sub-component will be measured by the increased participation in national tenders by COMESA private sector companies so as to achieve a minimum competition level involving at least six bids per tender, by June It will also be measured by the increased participation in regional tenders by COMESA private sector companies so as to achieve minimum competition of at least six bids per tender by August The activities of Sub-component A1 (awareness and sensitisation) will mainly be done through workshops in the Member States, lasting two to three days, on average. Participants at the workshops will include government agencies related to public procurement, private sector as well as representatives from universities and national management training institutions. The individual consultants (Annex 10) to be engaged specifically for this sub-component will guide deliberations at these workshops. First, the Consultants will develop appropriate awareness and sensitisation strategies that cater for the needs of two country groups that are at different levels of reform (see Annex 6). The Consultants will thus prepare the framework of the awareness programme, in consultation with COMESA. Group A will be made of up of nine countries that have not yet started the reform process and are therefore in urgent need of assistance, namely: Angola, Burundi, Comoros, Djibouti, Egypt, Eritrea, Libya, Seychelles and Swaziland. Group B will be made of six countries, which, because they trail in the reform process, require a push, namely: DR Congo, Mauritius, Rwanda, Sudan, Zambia and Zimbabwe. 5. Second, the Consultants will conduct the workshops. The activities will involve explaining to government officials and key private sector groups the objectives of the public procurement reforms. The following key areas will be covered: (i) objectives of public procurement reforms and their linkage to the COMESA-wide regional integration and trade agenda; (ii) background to the regional procurement reforms; (iii) activities and achievements of the PPRP; (iv) analysis of reform gaps; (v) articulation of the road map highlighting expected outputs and the effort and inputs required from Member States and the Secretariat. 6. A2 Support to National Legislative Process: The legislative reforms at national level are an important component of the change process needed to bring about a harmonised modern public procurement system. Legislation at national level involving the legislative assemblies will bring about an authoritative and legally binding set of rules and guiding principles. 7. Sub-component A2 will target the 15 Member States mentioned in the text as requiring active support. Support will also be directed other advanced Member States with the aim of ensuring compliance with the COMESA Procurement Directive, right from the early stages of development of draft laws and their attendant regulations. Interventions will take the form of desk review of draft laws and regulations at both Secretariat level and during missions, besides the review of consultants work during the drafting stage and also through the avenue of national Stakeholder consultative forums.the expertise inputs required will be about 1146 person/working days (or 52 person/months).. 1

55 8. Outputs of Sub-Component A2 will be the promulgation of national procurement laws and regulations that are consistent with the COMESA Procurement Directive. It will be carried out in 15 Member States, by end The activities of Sub-component A2 will be carried out by individual consultants (Annex 10). The consultants under Sub-Component A2 will include desk review of draft laws and regulations and to develop the draft procurement bills and regulations. The second task will be for the consultants to design and implement national Stakeholder Workshops in the 15 Member States, for the purpose of deliberating and assessing legal support requirements. The workshops will last between two to three days and will each result in a brief that will guide the consultants work thereafter. It will include the identification of a committee that will be the focal linkage point between COMESA and each Member State. The third task will require the consultants (using approximately 60 person/days per country) to develop the draft procurement bills and regulations for presentation to a second round of national Stakeholder Workshops. To speed up the work, the consultants will field four legal experts, who will each work for approximately 15 days on each country. The final task will be for the consultants to revisit the five Member States with modern laws, namely: Kenya, Ethiopia, Madagascar, Malawi and Uganda, with a view to assessing the degree of compliance of their laws and regulations with the COMESA Directive, and providing recommendations for amendments, wherever necessary. 10. A3 Development of Training Systems: Development of training systems that include training modules and case studies on public procurement will be critical to the capacity building process. It will cover the design and implementation of training workshops, toolkit design, and professional development programmes. The modules and case studies will help guide course presenters in delivery style and content, thereby optimising mutual (or peer-to-peer) leaning efforts. Clear, well-written modules should facilitate enhanced course planning and, most importantly, uniformity of delivery and evaluation, given the backdrop of diverse national systems in COMESA. The modules will also help in the systematic cascading of capacity building efforts to procurement cadres, through the Training of Trainers programme (TOT). 11. The consulting firm (Annex 10) to be recruited for this Sub-Component will field a team of five procurement experts with pedagogical expertise in developing modules, which can be used for both short-term training, as well as long-term training (or professional development programmes). These could lead to examinations and award of a diploma or certificate, for example. Given the complex nature of developing training material, it will be desirable for the consultants to submit final reports within nine to twelve months. The training modules should meet certain pre-defined quality standards. The expertise inputs required will be about 876 person/working days (or 40 person/months). 12. The outputs will be (i) Procurement course training modules, toolkits and professional development programmes; (ii) Procurement training case studies; design and implementation of training workshops. 13. The first task of the consultants will be to assess user needs, using recommendations from the PPRP and other earlier reports. This activity will entail visiting a selected sample of five Member Countries, with a view to making an on-the-ground assessment of human capacity gaps and attendant issues and problems. The second task will be to develop a framework of training systems and detailed training materials (covering toolkits and professional development programmes), including case studies. This work is expected to be completed within 12 months. It should result in presentation of drafts to COMESA in English and French. The third task will be to present the training materials to a regional seminar (3 delegates from each country), which will discuss the drafts and provide recommendations for improvement. After this the consultants will edit the training materials. 14. The fourth task will be the independent evaluation of the training systems by a committee of three persons comprising of two members from the TCPE and one individual consultant (who will be recruited for a period of 40 days). An evaluation report will be submitted to COMESA and the consultants. After making the required improvements the consultants will proceed with reproduction and binding. Ten copies of the training material will be required for each of the 20 Member States and will be handed out during the TOT programmes. A master copy will be retained by each Member State for use in running multiple copies as required from time to time under the national mass training programs. The fifth task will be to identify institutions in the region that have the capability of delivering training modules in public procurement, under a professional development programme. The sixth and final task will be for the consultants to prepare and deliver a final report, by September Component B Capacity Building 15. Project Component B will consist of three sub-components, viz. (i) Capacity Building at National Level; (ii) Capacity Building at COMESA Secretariat; and (iii) Business Opportunity Seminars. 16. B1 Capacity Building at National Level will entail capacity building for National Procurement Agency Staff. The PPRP covered capacity building through three sub-regional workshops (Zambia, Madagascar and Uganda). Due to budgetary limitations on that project, it was not possible to have specific in-country training to meet specific capacity building requirements necessary to sustain the reform effort at national level. To adequately address these issues, the proposed project will provide expertise inputs of about 625 person/working days (or 28 person/months). 2

56 17. The output of Sub-component B1 will be a well-trained critical mass of procurement professionals capable of managing the procurement system. The fully trained national procurement officials (10 per Member State), capable of training others and managing the procurement process, should be operational by August The activities under Sub-component B1 will involve training, which will be organised to allow for implementation of country-focused training strategies. The added benefit will be the elimination of air travel costs for participants. Participants undergoing national training programmes will be taken through a comprehensive TOT process, and, as such, selection criteria will be focused on the participant s ability and potential to absorb and apply the knowledge and skills acquired. Training is expected to start mid 2008, following delivery of training material. 19. There will be two training sessions for each Member State. The first round of sessions will be undertaken at start of the programme and the second at the end. Each national training workshop will have 15 participants, in order to benefit from the advantages of peer-to-peer learning. Participants will be drawn from key government institutions that include: (i) the Central Procurement and Disposal Authority, (ii) Ministry of Finance, (iii) Bid protest institution and (iv) Auditor General s office. Each workshop will last for seven days. The first five days (week one) will be devoted to procurement processes and procedures and the last two days (i.e. first two days of week two) will be devoted to TOT delivery techniques. To streamline organizational efforts, the remaining three days of week two will be devoted to CPIS training, covered under Sub-Component C.2 (see below). CPIS training will be limited to the first round of the training sessions. 20. Sub-component B1 will also enable a selected number of individuals to attend a regional training course in public procurement at a selected training institution. This training is expected to last for two months and should lead to accord a certificate or diploma. Financial support will cover full course participation fees and residential expenses for a maximum of 2 participants from each of the ADF classified Member States. COMESA will meet the expenses for participants from non-adf countries, with the project providing course material and the course presenter. Private sector sponsored candidates will also be invited to participate at the regional training institution. Finally, it is expected that there will be ongoing training at such recognized institution beyond the life of the project, with Member States and individuals covering expenses, thereby promoting long-tem sustainability. 21. B2 Capacity Building at COMESA Secretariat: This will entail deepening knowledge with operational skills that will be useful, not only for guiding and managing the procurement process at the Secretariat, but also for providing the necessary back-stopping to the regional capacity building initiative. The expertise inputs required will be about 108 person/working days (or 5 person/months). 22. The output of Sub-Component B2 will be 10 professional staff from COMESA Secretariat trained in modern procurement processes. 23. Capacity building activities under Sub-Component B2 will be broken into two phases. The first will require appreciation and understanding of policies and principles underpinning modern public procurement systems. Such knowledge will help in guiding the behaviour of public servants towards the achievement of reform objectives. Secondly, operational knowledge and skills will be needed for administering the modern public procurement system. The operational knowledge will cover the full procurement system cycle, especially: (i) procurement planning and budgeting, (ii) bid preparation, (iii) bid solicitation (iv) bid evaluation and (iv) contract award and post contract administration. 24. The first activity under Sub-component B2 will be for the consultants to prepare the programme of training. This will include the articulation of strategies to be employed in the delivery of training, highlighting course objectives and intended outputs. The second activity will be the actual delivery of training at a seminar to be held mid 2008 at the COMESA Secretariat. For maximum impact, participants will be limited to 10, to be drawn from key departments, including projects funded by cooperating partners. 25. B3- Private Sector Opportunity Seminars: Business Opportunity Seminars (PSOS) are considered an appropriate way of engaging the private sector into a more active participation in public/private sector partnership arrangements, especially with regard to public procurement.. The PSOS will have the objective of stimulating the private sector, which bids for government tenders, into understanding the new environment within which they will operate. Participants will receive guidance a on how to optimally benefit from the opportunities that the region will offer. Besides bid winning strategies and contracting, other topics will include business knowledge, best business practices, professional development, etc.. The expertise inputs required will be about 72 person/working days (or 3 person/months). 26. The output of Component B3 will be about 10 public sector individuals from each COMESA country that will be well informed on the business opportunities available within the region. 27. The first task of the consultants will be to do a desk review of effective strategies normally employed in this area, including discussions with ADB on the framework and content of seminars. The next task will be to prepare a draft strategy paper on BOSs that will be presented for review with the COMESA Secretariat. The final task will be the actual 3

57 holding of BOSs in Member States. Each seminar will last for two to three days and will include public sector participants numbering about 10. The numbers of private sector participants will have limited financial implications since these will be limited to venue and refreshments costs. Component C Upgrading the Procurement Information System 28. The COMESA Procurement Information System (CPIS) is the Website-based engine that will drive the modern public procurement system. Its capacity to publicise national procurement information, using the latest and cost effective IT systems was recognized under the PPRP, during the few presentations that were done prior to its launching in December Component C will be made up of two Sub-Components, namely: (i) Upgrading of Procurement Information Systems; and (ii) Capacity building of National Procurement Information System. 29. Sub-Component C1: This will entail the review and upgrading of the current procurement information system. Also, the Website facility will be promoted at national level to enable private sector use. The upgrading work will involve increasing the capacity of the IT processes (hardware and software) that will make it possible to go beyond the mere publicising of procurement information, into performing advanced features such as e-procurement, with facilities enabling bidders to submit bids electronically. The revamped IT system will have the capability of compiling information on procurement activities from each Member State, including information on market prices for materials, labour, plant and equipment, advertisements, bid results, and progress on procurement reforms. The expertise inputs required will be about 291 person/working days (or 13 person/months). 30. The output of Sub-Component C1 will be an enhanced IT and human capacity for collection and dissemination of procurement information. The success will be measured by utilisation of the COMESA Website at a minimum rate of 200 hits per week per country by December The first task of the consultants will be to review the features of the existing Web Site, taking into account the recommendations made by the CPIS seminar of December The next task will be to upgrade the Website, including the loading of additional content, as provided by COMESA. This process will take about 10 months to complete. Its final report will be presented to a regional CPIS Workshop scheduled to take place in Each Member State will be represented by three delegates. The consultants will prepare a comprehensive set of user manuals (one hard copy plus 15 CDs for each country, in addition to the Secretariat) that will be used in the capacity building programme. 32. Sub-component C2: Capacity building of national procurement information systems will be done within the wider framework of the CPIS, using manuals developed under Sub-Component C1. The expertise inputs required will be about 8 person/working days (or 36 person/months). Capacity building will be undertaken in a Workshop lasting three days. The Workshop will be conducted on back-to-back arrangement with the main capacity building programme. The Sub- Component will aim at an output of at least 2 skilled webmasters/site administrators in each Member State. Component D Project Management: 33. The Project Management Team established under the PPRP will be re-established to manage the proposed intervention. The Project Management Team will be composed of a Project Manager, Procurement Specialist, and support staff. The Project Management Team will also have a fulltime professional counterpart staff (to be funded by COMESA), a requirement that has been made a condition under the Grant Protocol Agreement. The Team will be equipped with computers, printing and photocopying equipment, communications equipment, office furniture and project vehicle. The Operating Costs of the project management will be met by the project. Besides, the project will inherit some furniture and office equipment procured under the PPRP, but which are still in acceptable condition.. 4

58 COMESA: EPRCP Draft Terms of Reference for Consulting Firms 1 Annex INTRODUCTION Due to the highly specialised nature of technical support required to meet the demanding requirements of the project, the consultancy services required have been split into four distinct competence areas, namely: (i) Policy and legislative development, including awareness and sensitisation; (ii) Development of Training Systems; (iii) Capacity building in Public procurement; and (iv) Information Technology Individual consultants will provide consultancy support to sub-component A1 and A2. On sub-component A1, it is expected that the project will engage procurement and legal specialists who will work on development of the awareness programme and facilitate in the development of mission plan and strategy for the procurement reforms in each Member State. Their international travel is also catered for. The three individual consultants to be engaged for this sub-component will be required to attend and support each of the national workshops and will be spread in a manner consistent with the roll out work programme that will be developed at commencement of project. Three more individual consultants, who may not necessarily be the same as those selected for sub-component A1, will be required for sub-component A2. The consultants will be required to provide the necessary legislative expert support in the Member States. Again, their schedule of work will emerge from the work programme that will be developed at start of project and in consultation with the same consultants Development of Training Systems and Capacity Building Consulting Firm will provide consultancy services for sub-component A3 and Component B. The firm is expected to field an initial number of 5 consultants who will come to the Secretariat for briefing and for conducting the training needs analysis. To allow for optimum group assessment, travel to five selected Member States for sample review of training needs will be done by four consultants. Development of the training systems and material will require 400 man/days over a period of one year. This should give the consulting firm sufficient time in which to produce the required high-level output. The regional review Workshop will require 4 experts, whereas the final editing will require the full team of 5 experts. The Consulting Firm will carry the largest responsibility of rolling out the capacity building programme in the COMESA region and as such it will be required to familiarize itself with prior developments through the seconding of one of its experts to the National Policy and Legislative process. The Firm will be allowed to field 5 experts during the early stages of the assignment involving strategy development. Thereafter, the Firm will be required to trim down its ground team to 3 experts for each national workshop. The three experts should be sufficient to provide the delivery variety required without straining the experts. The Firm will also be responsible for rolling out the Business Opportunity Seminars. Only 2 consultants will be required on the ground to facilitate at the short and business like workshops for the benefit of the private sector Information Technology Firm will focus on upgrading of the procurement information system. 3 experts will be required for development and 2 will be adequate for the capacity building sessions in the Member States. 2. TORS FOR POLICY AND LEGISLATIVE DEVELOPMENT 2.1 Scope of Services and Areas of Expertise The Individual consultants on Policy and Legislative Development will be required to provide support to member States of COMESA on two sub-components under the project, namely: (i) awareness and sensitisation of modern public procurement framework and (ii) development of national policy and legislative reforms. Already, five States ( Kenya, Ethiopia, Madagascar, Malawi and Uganda) now have modern procurement laws with some still in the process of developing supportive regulations and procurement procedures required to operationalise, the modern procurement systems. The Awareness and Sensitisation programme will concentrate on the remaining 15 member States who are still behind in the reform process. Support will also cover those member States that are also receiving direct assistance from the World Bank, again with a view to achieving total harmonization of procurement systems in COMESA in line with the Directive The consultants will need to provide expertise in the fields of Policy Development and Legislation to the 15 member States and also to leading 5 member States but only to the extend their systems have to achieve total compliance to the COMESA procurement Directive. Policy development requires high-level interaction with government policy makers who will need first to be engaged on broader procurement issues and their impact to the general public missions of government. Such effort should lead to the drafting of policy for approval at cabinet level or such other high-level policy

59 making organ in government. Following upon successful pronouncement of policy, the consultants will need to provide expertise in the development of legal framework and development of legislation High-level competence in communication at all levels is necessarily required and would need to be backed by proven expertise in State reforms. The consultants will need to work hand-in-hand with the consulting firm on Development of Training Systems and Capacity Building especially in the area of National Policy and Legislative process at national level. Input will also be required at the draft stage of procurement legislation and at development of the attendant procurement procedures and regulations. High-level coordination skills are therefore required. 2.2 Description of Relevant Project Sub-components Awareness and Sensitisation on the modern public procurement framework: This will entail the following: the development of appropriate awareness and sensitisation strategies that cater for the needs of two country groups which are at different levels of reform. Group A is made of up of 9 countries that have not started the reform process and will therefore be supported in starting the process, namely: Angola, Comoros, Djibouti, Eritrea, Burundi, Egypt, Libya, Seychelles and Swaziland. Group B is made of 6 countries, which have started the reform process but require support to accelerate the process, namely: DR Congo, Mauritius, Rwanda, Sudan, Zambia and Zimbabwe Explaining to Ministers and government officials in Member States and all key private sector players on objectives of public procurement reforms in COMESA and covering the following key areas: (i) objectives of public procurement reform in COMESA and their linkage to the COMESA-wide regional integration and trade agenda (ii) background that gave birth to the regional procurement reforms, (iii) activities and achievements of the PPRP, (iii) analysis of reform gaps and (iv) articulation of the road map highlighting expected outputs and the effort and inputs required from each Member State on one side and Secretariat on the other side. A mission undertaken in August/September 2004 to 9 selected member States 5 under the pioneering PPRP revealed that awareness of the reform process at national level had been confined to a few public sector officials that had participated in the few regional seminars and local workshops staged under that project Creating interest in the reform process through discussion groups and plenary sessions designed to deepen and broaden the awareness of the COMESA reform agenda and thereby achieve total buy-in of the reform process. There will be extra effort put into the exercise so as to ensure that the private sector, as a key stakeholder in the procurement process, is more involved in the reforms at an early stage to then enable it to build the necessary capacity required to handle the challenges under the modern public procurement system Instilling a sense of ownership to public procurement reforms that will be accompanied by a strong desire for immediate action. This project will provide the necessary guidance on how to kick-start the reform process at national level. Primarily, the public sector will be further sensitised on the need for the formation of National Steering Committees, this being a popular model that has worked elsewhere in spearheading the reform process Staging of national workshops in the member States, which will last two days on average for the purpose of explaining and educating the stakeholders identified on the need for reform and the attendant urgency for that reform. The presence of the media at the workshops should provide an avenue for the nation-wide dissemination of workshop resolutions and in the process publicly commit government to continued action. A team of selected individual consultants will jointly facilitate deliberations at these workshops. Consultants will first be given some limited time in which to prepare the framework of the awareness programme in consultation with COMESA. Support to National Policy and Legislative process: The legislative reforms at national level are an extremely important component of the change process needed to bring about a harmonized modern public procurement system within the COMESA region. Legislation at national level involving the legislative assemblies is the only vehicle of bringing about an authoritative and legally binding set of rules and guiding principles designed to implement the Directive that was passed by the COMESA Authority - for the purpose of reforming and developing a modern regional public procurement system. COMESA has already developed guidelines under PPRP, which contain essential components of national legal framework and institutional and organisational arrangements This sub-component is mainly targeted at the 15 member States that are also mentioned in the Awareness and Sensitisation component above. These countries, inclusive of Libya, which joined COMESA in June 2005, require active support. Support under this sub-component will also be directed at those member States that are already getting external and COMESA support the objective being the attainment of total compliance to the COMESA public procurement Directive. Interventions will take the form of desk review of draft laws and regulations at both Secretariat level and during missions plus review of existing consultants work during the drafting stage and also through the avenue of national Stakeholder consultative forums. 5 Comoros; Djibouti; DR Congo; Eritrea; Ethiopia; Kenya; Madagascar; Malawi; Zambia. 2

60 2.2.8 The first task under this sub-component will be to allow consultants to hold national Stakeholder workshops in the 15 member States for the purpose of deliberating on legal support requirements. These workshops should last between 2 to 3 days and would each result in a clear and unequivocal brief that will guide the consultants work thereafter, including the identification of a committee that will be the focal linkage point between COMESA and each member State. The second task will to provide the consultants with approximately 40 man/days per country in which to develop the draft legislation and supporting regulations for presentation to a second round of national Stakeholder forums. To speed up the work, three individual consultants will be engaged, who will each work for approximately 10 days on each country. The third task will be to revisit the other 5 Member States with modern laws, namely: Kenya, Ethiopia, Madagascar, Malawi and Uganda, with a view to assessing degree of compliance of their laws and regulations and providing recommendations for amendments wherever necessary. 2.3 Duties and Responsibilities The individual consultants for National Policy and Legislative Process shall, inter alia, carry out the following key activities: Desk review of Procurement Systems in the member States using all published available material including various reports produced under the PPRP; Develop awareness programme and discuss draft with the Project Management; Develop mission plan showing clearly tentative dates of national Workshops for the targeted 15 member States and present plan together with draft Agenda and detailed Organization of Work for discussion with Project Management; Provide facilitation at the national Workshops covering all key areas described in the project description above; The national workshops will last for two days and at least one consultant will be required at each Workshop. The Workshops will be spread over a twelve-month period to allow consultants to make necessary intervention that will assist in the development of national policy and the legislative process; Prepare and submit to the COMESA Secretariat an analytical report for each national Stakeholder Workshop on Awareness and sensitisation; Review existing legislation for each of the 15 member States. This process should commence during the country missions on Awareness and sensitisation; Review new legislation or draft Bills for those Member States already advanced on the reform process, with a view to checking for compliance to the COMESA Directive; Develop mission plan for national policy and legislative Workshops (two Workshops for each of 15 member States) showing clearly tentative dates together with draft Agenda and detailed Organization of Work for discussion with Project Management; Facilitate at the national Stakeholder Workshops and provide all needed guidance for kick-starting the reform process. The national workshops will last for three days; Prepare draft legislation where necessary and review draft legislation for presentation to second round of national Stakeholder Workshops; Prepare and submit to the COMESA Secretariat an analytical report for each national Stakeholder Workshops on national policy and Legislative process. 3. TORS FOR DEVELOPMENT OF TRAINING SYSTEM 3.1 Scope of Services and Areas of Expertise The consulting firm on Development of Training Systems and Capacity Building will under this assignment be required to develop training system in line with the guiding principles stated in the project sub-component on Development of Training Systems. The training systems will form the core resource for manpower capacity building on public procurement in COMESA and will cover both short to medium-terms skills acquisition programmes. The training systems should be robust enough and yet simple and clear enough to be used by Trainers who will undergo the Training of Trainers programme (TOT) during the term of this project. Manpower capacity building in COMESA will be cascaded down to all levels through the TOT model and it is therefore critical that the training systems to be developed by the consulting firm should be adapted to this model The consulting firm will need to demonstrate expertise in the development of training system which will encompass knowledge and skills building in a variety of settings ranging from Workshop to group and individual learning. The systems should also have in-built monitoring and progressive evaluation techniques that should prompt timely intervention necessary for rapid and sustained skills acquisition. The consulting firm should also demonstrate expertise in the development of case studies using raw information of real procurement cases to be obtained from selected member States of COMESA. 3

61 3.1.3 The consulting firm will need to work hand-in-hand with the consulting firm on Capacity Building in Public Procurement in the technical area of Public Procurement. It would come as an added advantage if the consulting firm on Development of Training Systems has in-built capacity and experience on public procurement. 3.2 Description of the Relevant Project Sub-component Development of Training modules and Case studies: Development of training systems that include training modules and case studies on public procurement is a critical input into the capacity building process. The modules and case studies will help in guiding course presenters in delivery of training material and thereby optimise the leaning effort from both the presenter side and the learner side. Clear, wellwritten modules should facilitate enhanced course planning and most importantly uniformity of delivery and evaluation given the backdrop of diverse national systems in COMESA. The modules will also help in the systematic cascading of the capacity building effort to lower levels through the TOT programme The consulting firm will need to field a highly qualified team of three experts with special expertise in developing modules which can be used for both short-term training work and medium-term training that would lead to examination and award of say a diploma qualification thereafter. Given the complex nature of developing training material, the consulting firm will be given adequate time of nine to twelve months in which to develop and finalise training modules that should meet certain pre-defined quality standards The first task of the consulting firm would be to assess user needs using available reports from the PPRP, supported by on-the-ground evaluation of training needs. This task will entail visiting 5 selected sample member Countries for the purpose of getting a clear assessment of human capacity gaps and attendant issues and problems. The second task would be to develop frameworks of training systems, followed by development of detailed training modules and case studies. Selected COMESA Member States will provide the basic material for development of case studies using archived procurement cases covering both the good and bad procurements. This work should be completed within 12 months from date of engagement of the firm and should result in presentation of the necessary drafts to COMESA in both English and French languages. The third task would be to present the aforesaid training materials to a regional seminar (3 delegates from each country) which will discuss the drafts and provide recommendations for improvement after which the consultants will edit the training material The fourth task will be the independent evaluation of the training systems by a committee of three persons comprising of two members from the TCPE and one individual consultant who will be recruited for a period of 40 days. An evaluation report will be submitted to COMESA and the consulting firm and after making the necessary improvement, the consulting firm will proceed with reproduction and binding. Ten hard copies plus 10 electronic copies (CD s) of the training material will be required for each of the 20 Member States plus Secretariat. These will be handed out during the TOT programmes. Master copies will be retained by each Member State for use in running multiple copies as required from time to time under the national mass training programs. The fifth task will to identify institutions in the region that have the capability of delivering training modules in public procurement. The sixth and final task will be for the consulting firm to prepare and deliver a final report by end of Duties and Responsibilities The Consulting firm on Development of Training Systems and Capacity Building shall, inter alia, carry out the following key activities under this assignment: Carry out a diagnostic review of Member State training requirements including manpower inventory. This will entail visiting at least five selected member States of COMESA; Develop Training material broken down into training modules that show clearly training objectives and outcomes and supported by simple, clear and relevant examples; Develop case studies on public procurement using real life cases on procurement as the basis. COMESA Secretariat will provide the necessary linkages with Heads of Procurement Agencies for selected member States; Make presentations of the training systems at a regional Workshop. Take note of suggestions and comments designed to improve further the training systems and capture all these in an analytical report to be submitted to COMESA; Make necessary amendments and revisions to the training systems; Submit drafts of training systems to independent evaluator; Make necessary amendments and arrange translation of materials into French language and submit drafts to TCPE for approval; Organise the printing of training material and produce the required number of hard copies and CD s; Identify regional training institutions, compile report and submit recommendations to COMESA. 4

62 4. TORS FOR CAPACITY BUILDING 4.1 Scope of Services and Areas of Expertise The consulting firm on Development of Training Systems and Capacity Building will also be responsible for implementing the roll out programme on capacity building to the COMESA region and will additionally provide business opportunity leadership during the region-wide national Business Opportunity seminars The consulting firm will under this assignment need to demonstrate expertise on capacity building in public procurement and should have on its human resource profile a number of procurement Specialist with international exposure covering diverse procurement systems including those for the World Bank. The firm will need to demonstrate an understanding of the diverse cultural settings underpinning the region and show how it can use this information for motivating participants undergoing the planned capacity building programmes High-level competence in communication at all levels is necessarily required and would need to be backed by proven expertise in public procurement. An equally important element under this project is the transfer of Training of Trainer techniques to participants undergoing the TOT programmes. The consulting firm will also need to demonstrate expertise in this area. 4.2 Capacity Building at COMESA Secretariat Level The Public Procurement Reform Project covered capacity building through three sub-regional workshops. Due to budgetary limitation on that project, it was not possible to have specific in-country training required to meet specific capacity building requirements necessary to sustain the reform effort at national level Capacity building activities under this project will be broken into two phases. The first one requires appreciation and understanding of policies and principles underpinning the modern public procurement systems - which every policy maker and senior executive needs to know. Secondly, there is the operational knowledge and skills needed for administering the modern public procurement system, which every procurement agency staff should be equipped with. The operational knowledge is intended to cover the full life cycle of the procurement system, covering the following: (i) procurement planning and budgeting, (ii) bid preparation, (iii) bid solicitation (iv) bid evaluation and (iv) contract award and post contract performance This sub-component intends to first build capacity at the Secretariat, given its leadership role in the planning and rolling out of various programmes of COMESA. This is perfectly in line with the guiding mission of COMESA Secretariat, which is to deliver excellent technical services to COMESA for the advancement of sustainable growth and development through regional integration The first activity under this sub-component will be to allow the consulting firm to prepare its programme of training, which includes articulation of the strategies to be employed in the delivery of training, highlighting course objectives and intended outputs. The second activity will be the actual delivery of training at a seminar expected to be held in October 2007 at the COMESA Secretariat. A final seminar is expected to be held around June For maximum impact, participants will be limited to 10 and will be drawn from key departments that handle procurement for the Secretariat, including the major projects funded by cooperating partners. 4.3 Capacity Building at National Level Capacity building activities under this sub-component will also be broken into two phases. The first one requires appreciation and understanding of policies and principles underpinning the modern public procurement systems. Secondly, there is the operational knowledge and skills needed for administering the modern public procurement system, which every procurement agency staff should be equipped with. The operational knowledge is intended to cover the full life cycle of the procurement system, covering the following: (i) procurement planning and budgeting, (ii) bid preparation, (iii) bid solicitation (iv) bid evaluation and (iv) contract award and post contract performance Training under this sub-component will be done mainly at national level to allow for implementation of countryfocused training strategies. The added benefit will also be the elimination of regional air travel costs for participants. Participants undergoing the national training programs will be taken through a comprehensive TOT programme and as such, the selection criteria will have to be narrowed down to the participant s ability and potential to absorb and apply the knowledge and skills acquired. Training is expected to start during the last quarter of year 2007 following delivery of training material There will be two training session for each member State - the first round of sessions will be undertaken at start of the programme and the second round at the tail-end of the programme. Each national training workshop will have 15 participants who should all benefit from peer-to-peer review. Participants will be drawn from key government institutions that include: (i) the Central Procurement and Disposal Authority, (ii) Ministry of Finance, (iii) Bid protest institution and (iv) Auditor General s office. The workshops will last for 7 days. The first 5 days (week 1) will be devoted to procurement 5

63 processes and procedures and the last two days (which will be the first two days of week 2) will be devoted to TOT delivery techniques. In a bid to streamline the organizational effort, the remaining three days of week 2 will be devoted to CPIS training covered under sub-component III.2. CPIS training will only be limited to the first round of the training sessions This sub-component will also allow for a selected number of individuals (maximum of three from each Member State) to attend a regional training course in public procurement at a selected training institution. That training is expected to last for two months and should result in the issuance of a certificate or diploma following some kind of testing. Financial support will cover full course participation fees and residential expenses for a maximum of 2 participants from each of the ADF classified member States. Non-ADF countries will pay for participant expenses with the project providing course material and the course presenter. Private sector sponsored candidates will also be invited to participate at the regional training institution. Finally, it is expected that there will be ongoing training at such recognized institution beyond the life of the project, with Member States and individuals paying directly for such training and thereby promoting long-tem sustainability of the programme. 4.4 Private Sector Opportunity Seminars Business Opportunity Seminars (PSOS) are now a recognized way of engaging the private sector into more active participation in public/private sector arrangement, whether in infrastructure developments or in public procurement as in this project. The BOS s have the objective of exciting the public sector, which are the suppliers to government tenders, into understanding the new environment under which they will operate. They will also get assistance on how they can optimally benefit from the myriad of opportunities that the region will offer. This sub-component should benefit immensely from the vast experience gathered by the African Development Bank in this field The first task of the consulting firm under this assignment will be to do a desk review of effective strategies that are normally employed in this area, including review and possible adoption of the ADB model. The next task will be for the consulting firm to prepare a draft strategy paper on PSOS that should be presented for review by the COMESA Secretariat. The final task will be the actual holding of PSOS in the respective member States. Each seminar should last for 2 to 3 days and will include public sector participants who should on average number about The private sector participants will pay for themselves. The cost for the project will only be limited to venue and refreshments. 4.5 Duties and Responsibilities The Consulting firm on Development of Training Systems and Capacity Building shall, inter alia, carry out under this assignment the following key activities: Perusal of training system developed under the first assignment; Develop plan for implementing TOT workshops and discuss draft with the Project Management Office; Spearhead the rolling out of the human capacity building programme starting with the COMESA Secretariat and the Member States. Two workshops will be provided in each member State and at reasonable intervals that allows for meaningful application of the skills acquired. The consulting firm will field three procurement Experts at each national Workshop that will last for 7 days. The first 5 days will be devoted to procurement issues and the last two days will be devoted to presentation and development of TOT techniques; Prepare and submit reports to the Project Management office at the conclusion of each Workshop; Spearhead the rolling out of the Business Opportunity Seminars. This will start by developing a draft strategy paper that will be presented to the Project Management office for discussion; Provide facilitation at the Business Opportunity Seminars to be held in each of the member States; Prepare report on outcome of each business seminar and summarise findings in a consolidated report. 5. TORS FOR INFORMATION TECHNOLOGY 5.1 Scope of Services and Areas of expertise The consulting firm on Information Technology will be required to upgrade the current COMESA procurement Website that was developed under CPIS in the pioneering project the PPRP. The current Website has been reported to have limited functionality and is not robust enough to meet the diverse requirements of member States, both real and expected. A good starting point would be to make an evaluation of the existing system and compare against some emerging national procurement Website systems such as those obtaining in Uganda and Zambia. The idea is to move the current Website into the leading pack of international procurement Websites that are benefiting from the latest advances in information technology encompassing e-procurement. A critical aspect of the whole exercise is to empower member States with the skills necessary to drive the system at national level whilst remaining linked to the regional server system that will remain under the administration of the COMESA Secretariat. 6

64 5.1.2 The consulting firm will need to have expertise in Website development, with bias on procurement systems High level competence in communication at all levels is necessarily required since the project work involves rolling out the upgraded procurement information system to Member States through the medium of national Workshops. 5.2 Description of Relevant Project Sub-components Upgrading of Procurement Information Systems: Work under this sub-component will be centred on the COMESA Procurement Information System (CPIS), which is the Website-based platform that is expected to drive the modern public procurement system of COMESA. Its capacity to publicise national procurement information using the latest and cost effective modern IT systems has since been recognized under the PPRP during the few presentations that were done prior to the launching of the procurement Website in December Envisaged under this project is the review and upgrading of the current procurement information system, including capacity building at national level. It is also intended to promote the website facility at national level so as to allow private sector buy-in into the project. The upgrading work should involve the deepening of the IT processes that will make it possible to go beyond the mere publicising of procurement information to performing other advanced features such as e- procurement that requires, among other things, suppliers to submit bids electronically. It is also envisaged that the emerging IT system will also have the capability of compiling information on procurement activities from each COMESA Member State, including information on markets, procurement advertisements, and progress on procurement reform The first task of the Consulting firm engaged under this component will be to review the existing Website and take note of recommendations passed at the CPIS seminar of December The next immediate task will be to upgrade the Website, including loading of additional content as provided by COMESA. This process should take about 10 months to complete and should all be captured in a report that will be presented to a regional CPIS workshop scheduled for the first half of year Each Member State will be expected to send three delegates to the workshop. The Consulting firm will also be expected to prepare a comprehensive set of manuals (one hard copy plus 15 CD s for each country including Secretariat) that will be used in the capacity building programme. These, together with the report will form the critical deliverables under this sub-component. Capacity Building of National Procurement Information Systems: Capacity Building of the national procurement information systems will be done under the wider framework of CPIS, using manuals developed under first sub-component. Capacity building will be undertaken in a Workshop environment lasting three days. To save on costs and administrative effort, the Workshops will be conducted on back-toback arrangement with the main capacity building programme on public procurement. 5.3 Duties and Responsibilities The Consulting firm for Information Technology shall, inter alia, carry out the following key activities: Conduct a review of the current CPIS and in particular the Procurement Website and make such recommendations as are necessary for improved information dissemination; Provide expertise in the enhancement of the CPIS to attain interconnectivity with the Procurement Authorities of Member States; Present report and participate at Regional Information Strategy Seminar; Implement decisions of the seminar; Provide report and undertake appropriate national capacity building programmes; Provide Final report. Source: COMESA Secretariat and AfDB Project Team 7

65 1

66 2

67 3

68 COMESA EPRCP Draft Terms of Reference for Project Steering Committee Annex COMPOSITION: The Members of the Project Steering Committee shall be the following: Assistant Secretary-General, Chairperson; Director, Legal and Institutional Affairs, Project Coordinator; Director, Trade, Customs and Monitoring; Director, Information Technology (or officer in charge of Department); Chief Technical Cooperation Officer; Three (3) representatives of National Procurement Agencies (2 Government and 1 Private Sector) from the COMESA Member States. Project Manager, Secretary (ex officio 2. SCOPE OF RESPONSIBILITIES 2.1 The Project Steering (PSC) shall have the responsibility to co-ordinate and monitor the implementation of the project and decide, as when required, on any remedial actions to be taken to ensure that the project objectives are achieved and the implementation schedule is adhered to. In this capacity it will hold regular meetings to examine and assess project implementation progress and to specifically review the Interim Reports to be submitted by the Consultants. 2.2 The PSC will submit reports to the regional Technical Committee of Procurement Experts (TCPE) made up of Heads of national procurement agencies from COMESA Member States. The TCPE will meet regularly to discuss and exchange views on public procurement and provide strategic leadership. 2.3 The PSC will cause the Project Coordinator to prepare and submit to the Bank, Quarterly Progress reports summarizing the physical and financial status of project execution. 3. MEETINGS AND SECRETARY TO THE PSC 3.1 The PSC shall meet once every six months. The Chairman may also call extraordinary meetings, from time to time, to deal with any project issues that may arise. 3.2 The Project Manager shall serve as Secretary to the PSC, with no voting rights. The Secretary shall be supported by the Project Secretariat. Source: COMESA Secretariat and AfDB Project Team 1

69 COMESA: EPRCP Draft TORs for Project Manager & Procurement Expert Annex PROJECT MANAGER 1.1 The Common Market for Eastern and Southern African States (COMESA) in undertaking a public procurement reform project aimed at strengthening and/creating institutional capacity in COMESA member States in public procurement, harmonisation of procurement rules and regulations and thereby enhance competition in procurement of goods and services within the COMESA free trade area. For this purpose, COMESA requires the services of a Project Manager. 1.2 The main responsibility of the Project Manager will be to oversee the implementation of all the project components, under the responsibility of the Project Co-ordinator. The Manager will be the key link between the project, COMESA and the African Development Fund and will accordingly perform the following major specific duties: Co-ordinate all project activities including the recruitment of the consultants, and ensure that project activities are executed according to schedule. Prepare, as needed, tender documents comprising instructions to bidders, specifications and contracts, for all procurement under the project, including the supervision of the tendering process and the analysis of tenders. Supervise and monitor the execution of these contracts. Perform all the activities necessary for the holding of the stakeholders forum and any other workshops required to be held under the project. Prepare financial outlays and projections for implementation of the project in accordance with the project implementation document. The PM will liase with the Chief Finance and Budget Officer, who shall keep the project accounts, and ensure that they are kept up-to-date at all times, and in line with Fund requirements. Liase with the African Development Fund on the disbursement and utilisation of funds under the project and also with financing institutions on the modalities for financing of comprehensive institutional reforms of the national procurement agencies in each COMESA member State. Compile Project Quarterly Reports and other documents required under the project and submit them to the Project Co-ordinator. Advise the Project Co-ordinator on the timely implementation of the project. Arrange all the necessary missions and travels required to be undertaken by the project Consultants, project personnel and the stakeholders under the project. Serve as Secretary to the Project Steering Committee (PSC) and supervise and ensure execution of any decisions made by the Committee. Arrange meetings for the Technical Committee of Procurement Experts (TCPE), including preparation of technical papers and generation of reports of the TCPE. 1

70 2. PROCUREMENT EXPERT 2.1 The main responsibility of the Procurement Expert will be to support the Project Manager (PM) in the smooth implementation of the project and will in particular provide added expertise to Member States in the area of the ongoing procurement reforms. The principal activity will be to coordinate the activities of the individual consultants and the consulting firms. In summary, the Procurement Expert will, inter alia, perform the following major specific duties: Assist PM in establishing regular contacts with relevant senior personnel in the national procurement agencies of Member States and in the process take note of outstanding issues and follow-ups on those issues requiring action; Assist PM in co-ordinating events and Workshops and prepare workshop and mission reports as and when needed; Provide technical input to procurement matters that will be raised from to time by Member States during mission and workshops and through the established communication channels between Secretariat and Member States; Assist PM in reviewing the various reports of Consulting Firms and provide appropriate critique for internal discussion and make draft responses were necessary; Take charge of the Project Office during the PM s absence on missions and on leave; Assist PM in compiling Project Quarterly Reports and other documents required under the project; Provide technical input to the procurement system of the Secretariat and participate in evaluations on an as and when required basis. Source: COMESA Secretariat and AfDB Project Team 2

71 COMESA: EPRCP Schematic Diagram of Project Implementation Methodology Schematic Diagram of Project Implementation Methodology Annex Project Manager/Consultants Develop Framework for Implementing Procurement Reforms 2. Project Manager/Consultants Develop Detailed Work Program 3. Project Manager to liase with Member Countries, ADB Group and World Bank 4. Consultants develop Training Systems 5. Review and Upgrading of Procurement Information Systems Awareness and Sensitisation Workshops - Awareness in Member and Sensitisation States Workshops in Member States - Workshops on National Legislation Review by COMESA Technical Committee of Procurement Experts Regional Workshop to Review - Training Strategies and Methodology - Upgraded Procurement Information Consultant to finalise - Training Strategy Document - Training Modules and Syllabi - Procurement Information Systems Implementation Training and Capacity Building Support to National Legislative Process Procurement Information System Business Opportunity Seminars - Implementation Review by COMESA Technical Committee of Procurement Experts - Mid-term Review by ADB

72 COMESA: EPRCP Project Implementation Schedule Annex 15