Why all this confidentiality?

Public Contracts

By Murli Dhar


Part of the so-called “Illovo Deal” was struck between the MMM-MSM government and a few capitalists. The latter bought up a large part of the lands that were put up for sale by the outgoing firm, Illovo. No one knew at that time and knows till today as to why they were preferred over everybody else as acquirers of those lands. The transaction was shelved up as a private deal even though the government had a big stake in it insofar as it had agreed to forgo significant state amounts of registration revenues to make the deal happen.

Air Mauritius has partnered with Air France for quite some time now. No one knows why Air France was preferred to other potential code sharers despite the fact that the public sector has a controlling interest in Air Mauritius. Service quality of Air Mauritius or even its economic viability has not improved by even an iota following this partnership. Air Mauritius has not weathered the international storm in the wake of the Great Recession beginning in 2008.

The same system of secrecy applies to the sale of 40% shareholding in 2001 in Mauritius Telecom to France Telecom. No one knows why France Telecom was chosen and not one of the other higher performing and more advanced technology partners of the planet in the field of telephony. All that happened thereafter was for Mauritius Telecom to assume a market dominant position which it shared with the other dominant player, Emtel, on the telecoms market. Internet cost has thus been kept high during this whole period and this legacy is continuing.

Similar secrecy provisions have shrouded the re-baptised Jin Fei project near the City of Port Louis. We were informed by the then Minister of Finance that the other side (presumably initially having something to do with the Chinese government) has asked for the contractual terms of the development to be kept secret. Yet, this project was driven by the public sector and it involved displacement of farmers who had been occupying part of the lands allocated to make way for the Jin Fei project. In the absence of any concrete achievement so far a long time after the project was set up, people have started questioning the bona fide of the deal: they ask as to what exactly was the development component of this project. There are no answers. Yet.

The same goes for the decision recently of the State Investment Corporation (SIC), the investment arm of the government, to sell away state properties it owns at the Domaine les Pailles. There is no idea as to whether an independent prior scientific evaluation of the worth of the property has been carried out, acting as a floor under which no bids will be accepted. There is no indication as well as to what would be the criteria that one or several prospective acquirers would have to satisfy to comply with developmental objectives the SIC would have laid down for disposal of the property that it has itself been incapable of implementing so far over there. The absence of information in these respects casts doubt into the mind of the public on an otherwise perhaps well thought-out strategy by the state company.

The government has recently contracted out to a Singapore concern a national identity card (NIC) assignment for Mauritius. There was no bid procedure adopted for granting this contract costing over one billion rupees. The public has been informed that, for reasons of confidentiality, the terms of the contract will be held secret. One would have thought that the moment this is a public contract, details would have been made publicly available on the performance criteria we would have required the other party to fulfil. This is not the case.

Opening up to the public would have served to show as to why this route of non-bidding for the NIC project has been adopted. There are many alternative smart low-cost high tech providers of this kind of facility in the world, even though this one is not a very complex matter to deliver. So, the Singapore choice could have been explained away as to why the country stands to gain from this specific choice. Moreover, the Chinese usually launch one of their own local qualified outfits to collaborate closely with key foreign suppliers (e.g., airplanes from Airbus or Boeing). The objective is to advance domestic capabilities as eventual providers of the same technology eventually to the world. We could have followed this route. It would have been interesting to know whether we are creating that kind of entrepreneurial space for the country by giving out the contract to Singapore.

When information pertaining to the public domain is kept confidential, it gives rise to all sorts of suspicions of wrongdoing. That assumption may not be true in all cases. However, it is observed with anxiety that several governments have been having recourse to this practice. Absence of clarity tends to enlarge the democratic deficit in the concerned countries. The element of trust that should exist between state and citizens is eroded in the process. The less therefore governments have recourse to unilateral allocations of contracts with the additional requirement that they be kept secret, the more they fulfil their fundamental role which is to provide information to citizens for the latter to make informed choices through tested procurement procedures or be reassured, if that is not possible, as why what is being done is above board and in their own best interests. In normal circumstances, when it comes to public contracts, the real role of the state is to limit itself specify the required outcome. It is then open for relevant public agencies to meet the specifications at least cost.

Let us travel in this direction for the good of one and all. Confidentiality may be justified in sensitive areas such as defence and strategically competitive areas. It is also understood that a company may not want to disclose its core business secret. Beyond this, the public domain calls for full details.

* Published in print edition on 1 November 2012

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