Russian Ministry of Finance proposes procurement reform

RUSSIA / FSU POLITICS - In Brief 25 Feb 2019 by Alex Teddy

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The Russian Finance Minister (Anton Siluanov) has ordered his civil servants and the treasury to overhaul the public procurement procedure. Like many aspects of government it is byzantine in its complexity and slow, which Siluanov publicly acknowledges. Streamlining this will help the government deliver on its 12 National Projects. The 12 National Projects were announced by President Putin with much fanfare in May 2018. However, there is considerable scepticism about these projects - are they really deliverable on schedule?Procurement has to be transparent because in the bad old days of the 1990s a lot of goods and services that were procured were either substandard or did not materialize. People disappeared with government money. Civil servants and politicians received kickbacks. The Sochi Winter Olympics in 2014 was an example of a government project that was hugely over budget partly because of corruption. The government wants to ensure that there is value for money. The government has taken a close interest in tenders over the past few years. The government is pursuing two contradictory aims. It wants a faster, simpler process but also an incorruptible one which also cuts costs. In 2018 the cost of public procurement went up by 23% YoY. The Audit Chamber has also blasted the current system. It noted that last year USD 12 billion of allocated funds was not spent. Budgeting is not always done sensibly. This is partly owing to tender procedures being too lengthy. Contracts often fail to be completed on time.