Tanzania has come up with a Bill, the proposed Public Procurement Act, 2010, that if passed by parliament, will pave the way for the amendment of government procurement laws to allow the purchase of secondhand plants and machinery to tackle the crippling energy crisis facing the country.

The move — which might put the country on a collision course with the World Bank — may also pave the way for the purchase of the Dowans Tanzania Ltd power generation equipment.

Tanzania recently failed to use the option to acquire the equipment belonging to Dowans Tanzania Ltd, because of the strict regulations under the current Act which, requires all procured goods to be new.

The current Act (Public Procurement Act, 2004) states in regulation 58 (3) “Motor vehicles, heavy plant and spare parts to be purchased shall be brand new.”

Whereas the current law and World Bank procurement procedures ban the purchase of secondhand motor vehicles, heavy plants and spare parts, the proposed law will allow such transactions.

According to Section 64 (1) of the proposed Bill: “Emergency procurement may be made where the accounting officer determines that it is in the public interest that goods, works or services be procured as a matter of urgency.”

It goes further to state, in Section 64 (2), that “For the purpose of subsection (I), emergency procurement shall meet one of the following criteria:

(a) compelling urgency that creates threat to life, health, welfare or safety of the public by reason of major natural disaster, epidemic, riot, fire or such other reasons as may be determined by the accounting officer;

“Emergency situation that generates all need for goods, works or services that, if done through normal procurement process, the government or the organisation would be injured;

(c) situation whereby without the urgent procurement, the continued functioning of the government or organisation would suffer irreparable loss, the preservation or protection of irreplaceable public property, or the health or safety of public will be threatened.

The proposed law has come at a time when the energy crisis in Tanzania deepened recently, after it emerged that the country was operating on a depleted electricity reserve that could throw it into darkness in case of an outage and cause millions in losses for industry and agriculture.

Crippling crisis

Manufacturers are already staring at major revenue losses that could in turn pile pressure on prices of key commodities.

The ongoing power rationing is expected to cost manufacturers over $5 million and a two per cent slump in output in the agricultural sector.

The government will also lose $1.5 million in taxes.

Observers are wondering why it has taken the government this long to replace the 2004 Procurement Act that had been cited as a hindrance in some procurement instances.

But there is also relief that the government was now finally creating the right conditions to purchase “second hand machinery.”

If and when the proposed (Bill) Public Procurement Act, 2010 comes into effect, the Tanzania government may opt to negotiate with Dowans to purchase the latter’s power generation unit, but the ongoing court case may complicate matters.

The draft law circulated to Cabinet ministers for discussion in parliament from today (March 14) before being presented to the House for endorsement, may change drastically the way the government procures its plants and machinery.

Under the proposed regulations, emergency procurement would become a method whereas in the old Act it was a modality with a lot of stringent conditions, “Making it a method that leaves a lot of room and loopholes that could be easily abused by those wanting to procure to satisfy their own selfish needs,” a procurement specialist told The EastAfrican.

The proposed Bill further says that for the purpose of subsections (1) and (2), a procuring entity may undertake procurement of used heavy plants or machinery under the following circumstances:

“The plant or machinery is required for continuation of the provision of services or performance of works to the public and the lead time for manufacturing new plant or machinery will result into failure to provide the relevant service or performance of the relevant works; and the heavy plant or machinery to be procured is of the type that its records of major maintenance are kept and are available for verification,” it says.

A procuring entity shall before proceeding to procure used heavy plant or machinery obtain an approval from the Ministry responsible for plants and machinery; and ensure heavy plant or machinery sought to be procured conforms with the type of items specified by the Minister in the regulations.

Regulations under the current act were very strict as to how to conduct emergency procurements.