The Vice-President, Dr Mahamudu Bawumia, has asked public officers to pay more attention to procurement processes.
“Over 90 per cent of corruption in the country is related to procurement. Current project costs are believed to be in excess of those accepted in the sub-region and globally. For instance, a comparative analysis reveals that quality hospitals are currently built at more cost-effective rates in places such as India than they are built in Ghana,” he stated.
Speaking at a day’s conference dubbed: “Value for money conference on the construction of roads, schools and hospitals” in Accra yesterday, Dr Bawumia laid emphasis on the Public Procurement Act 2003 (Act 663) and reminded all that it was the main law that guided procurement in the public sector.
He pointed out that the act was to ensure responsible public procurement and value for money for the government.
That, the Vice-President said, led to the creation of several structures under the act to ensure that public procurement was done transparently and objectively, with a view to ensuring that public funds were not wasted.
The conference, which was to establish how the country could get value for the billions of cedis invested in the construction of roads, schools and hospitals, attracted ministers of state, chief executive officers (CEOs) of various organisations, academics, the nation’s development partners, captains of industry and civil society organisations.
High costs of projects
Dr Bawumia said it emerged at a recent meeting of the Economic Management Team that Ghana constructed 60 to 80-bed district hospitals at $25 million.
“You will hear today that the African Development Bank constructed a150-bed hospital in Accra for some GH¢5.76 million or $1.3 million without equipment. Even if we have to equip this hospital with some $1 million, the total cost could not get to more than $3 million,” he stated, and asked: “How come that we are building district hospitals at $25 million, a figure which even excludes the tax exemptions granted on equipment imported for the hospitals?”
The government, he hinted, would come up with standard designs for schools, hospitals and roads, with their accompanying bills of quantities, pointing out that maximum cost for constructing a district hospital or a six-unit classroom block was set to guide the procurement process.
Value for money
On value for money, Dr Bawumia said the expression had been overused in public procurement, adding that although “many procurement decisions have been made with the goal of attaining fit for purpose, efficiency and effectiveness, infrastructural projects are in the end characterised by huge cost overruns and undue delays which eventually fail to deliver on their objectives to the ultimate beneficiaries”.
He cited the bus branding procurement in the past administration, which, he said, was characterised by acts of corruption, to buttress his point.
“Ghanaians remember all too well the infamous bus branding procurement which cost the taxpayer over GH¢3.6 million,” he said.
“Value for money in public procurement, therefore, refers to a judicious, economic and efficient use of state resources at a reasonable cost. It is not about achieving the lowest initial price but rather the optimum combination of whole life costs and quality and arriving at best contract terms for Ghana,” the Vice-President explained.
He, therefore, urged the participants to come out of the conference with an extensive report on applicable solutions, so that the reasons for the high cost of constructing roads, schools and hospitals in the country would be identified.
The Minister of Finance, Mr Ken Ofori-Atta, in a brief remark, underscored the need for standardisation in the construction of hospitals, schools and other state infrastructure and called for a fundamental restructuring with respect to the grading of