Government purchased 490 buses at the highest market price
The government of Juan Carlos Varela has been criticized for the purchase of some 490 buses without resorting to an open tender, thereby failing to secure the best market prices available.
- Rafael Berrocal/ @PanamaAmerica
- - Actualizado: 11/1/2017 - 01:33 pm
The government of Juan Carlos Varela has been criticized for the purchase of some 490 buses without resorting to an open tender, thereby failing to secure the best market prices available.
Given the significant cost of the purchase, which amounted to more than $24 million, experts believe that it should have been included in the government general budget and gone through a standard open tender process.
In the event, the purchase order was divided up into 69 individual orders and executed within a framework agreement that in the vast majority of cases benefited a single company, Bering Motors, itself linked to the Machetazo Group. This is in spite of the existence of other suppliers within the framework conventions that also had pre-qualified to supply this type of product.
Framework conventions are a mechanism normally utilized for small orders that the government has to fulfill urgently. However, with time this mechanism has been distorted to include articles of great monetary value such as heavy machinery or, as in this case, 30-passenger buses.
One of the advantages of framework conventions is the possibility of selecting the best-price on offer across pre-qualified suppliers. This mechanism also appears to have been distorted for the benefit of one specific economic group, with no due consideration to competing offers available at a lower price.
According to an official report, entities such as the ministry of education (Meduca), the economics and finance ministry (MEF), the security ministry, Tocumen SA, as well as other state entities, hardly ever chose the lowest price available within framework agreements 107 and 110.
The report highlights how 92.8% of these purchases were awarded to Bering Motors, in spite of the fact that the latter was neither the biggest distributor in the country, nor the one offering the best prices.'
Purchase of buses lacks transparencyThe purchase of 490 coaster-type buses for a total price of $24 million from a single distributor within an existing framework convention looks like a bad joke to ordinary Panamanians.According to former presidential candidate Juan Jovane, the current government has shown little transparency and even less credibility since taking power.“There are two issues at hand: first, the government has been indulging the practice of direct procurement that it so criticized during the electoral campaign. Second, it is clear that the authorities hold the priorities and necessities of the population in lesser importance than they should”.When the state enters into a framework convention with suppliers, it is foregoing the possibility that other providers may enter the fray. This in turn raises doubts over the transparency of the contracts that have been awarded to a select number of competitors. According to lawyer Ernesto Cedeño, “when too small a number of companies end up participating in these public tenders, things get murky.” Mr. Cedeño is a proponent of revising and modifying the law regulating public tenders, especially as regards direct procurement contracts, abbreviated processes and framework conventions.
Bering Motors is part of the Machetazo Group, whose owners are alleged to have been campaign donors of President Varela. The company is reported to have received 29 purchase orders for 445 Hyundai buses, for a total value of $21.64 million.
The average price of each of the 30 passenger buses sold to the Panamanian states ranged between $63,500 and $71,242, according to data from the framework convention, representing the highest price points within the framework.
For instance, competitor Ricardo Perez SA, which distributes Toyota buses priced between $57,739 and $60,330, only sold 17 buses for a total consideration of 981,563 dollars during the period.
Another competing company, Automotora Autostar Panama, which distributes Mercedes-Benz buses priced between $52,000 and $56,000, only managed to sell six buses to the government.
Equally, the prices offered by Nissan distributor Compañia Panameña de Motores SA also came in below those of Bering Motors, ranging between $58,174 and $60,844. In spite of that, it only sold 23 buses for a total amount of $390,902.
According to former economics and finance minister Frank de Lima, the whole point behind framework conventions is to allow for government to choose the best offer on the market at a given time.
Another anomaly that has affected the purchase of the 490 buses is to be found in the process of triangulation. During the administration of President Varela, entities such as the economics and finance ministry have purchased 222 buses worth $14,12m. Of those, 139 buses were bought on a single day in August 2016, for an amount of $8.77 million.
Most of these buses have been transferred to other state entities such as the education ministry, or directly to assembly members who have then been free to use them within their own electoral circuits.
The education ministry also shows up has the second biggest purchaser of buses during the current administration, allegedly for use in schools and colleges. Meduca has bought 91 buses from Bering Motors, worth $5.85 million. In August 2016 alone, the education ministry purchased 50 buses from the company owned by the Poll family.
Para comentar debes registrarte y completar los datos generales.