Nobel P. Loser

How to prevent taxpayers’ money getting down the gutters

 

Many amongst us may not be aware of the extent to which public funds are spent and managed without regard to the effort being made by taxpayers to pay in those sums.

It seems that taxpayers’ money is losing its sacredness and it’s now treated like anybody’s money – at least by some of those who are in power and irrespective of political parties, coalitions, etc., and the length of time they have all shared the same bed. Things have not evolved soundly in this respect during the past years and decades. Unless we are careful, Mauritius risks being able to conquer a high place in the hit parade of public financial mismanagement. For this, it need not even have to endure any stress test. The thing is too visible, the smell too strong to be missed out.

 

 

Let’s go straight into the heart of the subject. For too long, public servants have been accused, at times rightly, on other occasions wrongly, of all sorts of mismanagement regarding public funds and projects. In contrast, private conglomerates, even when they have erred in these respects — and they have done so quite often — are treated with more elegance and deference. Here is one story to illustrate the case.

Early last year, a big private multinational was engaged into a public contract following a tendering process. It took the legal commitment to undertake public works to the tune of some 20 million rupees in this context.

Early this year, it allegedly went back to the Government of the Republic of Mauritius to claim an additional 20 million rupees for it to complete the job it had taken up. It claimed that unless the request was met, it would not abide by any of its legal commitments regarding the said contract. You know what and you will laugh! The company allegedly advanced two reasons for its non-compliance with the undertaking it had given to the Government within the terms of that undertaking – the Soccer World Cup and Piracy!

End story. The project cost is effectively inflated by 100 percent; the legal contract becomes a sham in such a case; the public bears without any protest the consequences of the money thus squandered away; no project is finally implemented and there is no improvement in the quality of life of the community contrary to what was originally intended.

People should normally be horrified by the story of such companies that dare walk away on a contract with the Government of the Republic of Mauritius after submitting the most lame of excuses. There are several cases like it. In Curepipe, towards the end of the eighties and early nineties, the price paid for a project estimated at around 15 million rupees shot up to nearly three times the original cost! A few days ago – and the news is breaking out now – the project is in ruins!

These stories are not the only ones of the type. Our own research confirms that there are several dozens of such cases involving private companies.

Now, there are many lessons to be learnt from them.

First. The authorities should not shy away from their duty and responsibilities to safeguard the interest of the public from such abuses. Nor should they hesitate to do what is right. As the saying goes, there is no wrong time to do the right thing.

If public authorities feel they still have their sense of duty towards this country, they should diligently proceed with a review of all contract protocols binding private companies in the execution of public works. There is no reason why more stringent clauses should not be inserted in legal contracts signed to protect public funds from being abused. The very same logic that is applicable in the case of drug traffickers should be applicable here. Public authorities should hit exactly where defaulters would feel the pain the most – their pockets! Why should not a defaulter failing to deliver a public project as originally agreed pay as fine the an identical amount as what was earmarked for the project and as stipulated in the legal contract, plus any sum representing prejudices caused?

Second. Why should contracts for public works not be made public after signature? There is nothing wrong for the public to be made aware of the broad terms of the contract, the standard to be expected from the work, the start time and the date of completion. This kind of information can give leverage for the public to follow up on issues like sequencing of public sector activities to avoid waste while also keeping up the pressure for completing assignments on time.

Third. The General Audit Office, which enjoys constitutional protection and freedom, should put a stop to the old administrative practice of referring to defaulters as company A, company B, etc., in the Audit Reports. It should rather adopt the wisdom contained in the ‘name and shame’ doctrine. This kind of transparency will deter companies from failing to deliver on successive contracts. It will also give leverage for the public to act when past mistakes in allocation of contracts risk being repeated.

Fourth. It should be an established practice to have recourse to independent technical advice every time this is warranted towards the specification of projects. Such a practice will help keep bidders and/or competitors off bounds in the tendering process and prevent them from “helping” to draw up the terms of reference or technicalities in connection with any public work project.

People should also know that already our democracy and public administrative system contain a fair amount of independent institutions whose task it is to protect public funds. The Financial Secretary tops the list as the main steward of taxpayers’ money; his powers are administratively delegated to an army of Permanent Secretaries and high-ranking bureaucrats in parallel to the operation of independent internal audit committees or monitoring committees. However, actual facts and past records serve to remind us how inefficient the system has proved to be. It is therefore incorrect to come and say that there are no solutions to ordinary problems or systemic problems.

Yet another issue is about politics and political power. We are individually afraid to say certain things that ought to be said. Unless one million Mauritians stand up united and tell the political establishment that the time for change has come, no major change in the existing framework is visible in the foreseeable future. Politicians will not change things easily. The simple reason for this is that the political establishment would never move forward with any plan for ushering in real change that they might honestly believe in but which, they think, also has the capacity to do them harm them politically some day. This is a dilemma that will persist until a Tahrir-like public mobilisation takes birth on the Mauritian soil.

On a more general note, it appears that in England and US for example, “Main Street” there has a better knowledge and understanding of the concept of taxpayers’ money than in our place. They will not allow scandalous waste at taxpayers’ expense to be continued. The hot debate there since some time is about cuts in allocation of public funds and many proposals for cuts hit at public jobs and public services, including health and education.

It’s painful to admit it, but here in Mauritius, we have in the Civil Service quite a large number of hopeless and useless bureaucrats, mostly so in departments, public financed companies and parastatal bodies. Just think about the added costs of this state of affairs on public funds i.e., taxpayers’ money.

It may be a politically incorrect policy to get rid of this kind of wastage. However, a change from the prevailing pattern is necessary if we are to move forward and swim in safer waters. The thing is that here it is easier to blow up an institution like the DWC than to touch other sacred cows!

 

NOBEL P. LOSER

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