Political Influence in Government Procurement in Bangladesh: A Study

The Bangladesh government, with the assistance of the World Bank, launched the e-Procurement system through the e-GP portal 12 years ago. The main objective of this initiative was to reduce the risk of corruption in government purchasing, increase fair competition, and ensure transparency. However, despite some positive results, the e-GP system has not significantly impacted the reduction of corruption, political influence, and collusive tendering through syndication. TIB recently highlighted some inherent weaknesses of this system in a survey.

This survey report discusses market concentration, collusion, and political influence in the procurement market of Bangladesh using e-GP system data. The research highlights a lack of competition through a high rate of single bids and the increasing market dominance of a few large contractors. Additionally, it addresses political influence in government procurement in Bangladesh.

The following discussion will focus solely on the “Political Influence in Government Procurement” section from the TIB survey.

Political Influence in Government Procurement

Even 12 years after the introduction of the e-GP system, political influence, collusion among influential individuals, and syndication play a significant role in securing contracts in major government institutions.

Local and national political powers are presumed to be involved in extortion, but a deeper analysis reveals a well-established nexus between civil bureaucracy, contractors, and politicians. This alliance facilitates the misappropriation of government funds for personal gain and acts as the primary driving force of corruption in the procurement system.

Changes in Political Leadership and Contractor Dominance:

• Dhaka North City Corporation: After a change in mayor, only two general contractors were on the list of top 10 contractors.
• Dhaka South City Corporation: After a change in mayor, only one general contractor was on the list of top 10 contractors.
• Chattogram City Corporation: At the time of the mayoral change, there were no general contractors on the list of top 10 contractors.
• Gazipur City Corporation: After the mayor was suspended, only one general contractor was on the list of top 10 contractors, and the contract value significantly decreased between the two periods.
• Cumilla City Corporation: After a change in mayor, only two general contractors were on the list of top 10 contractors.
• Ministry of Industries: After a change in minister, no contractor from the previous top 10 list reappeared.
• Local Government Division: With changes in three ministers, only two institutions from the top 10 list were present throughout all three consecutive periods, and one was present in the last two periods.

These observations indicate that changes in political leadership often impact the dominance of top contractors in securing government projects.

View the report: e-Procurement in Bangladesh: Market Concentration, Collusion, and Political Influence