With World Bank’s blessings… Energy Dept. allowed to handpick companies for key projects in oil industry

Dec 23, 2019 News

Earlier this year, the Energy Department benefitted from a US$20M loan from the World Bank to fund a Guyana Petroleum Resources Governance and Management Project.
That project is intended to support the enhancement of legal and institutional frameworks and the strengthening of the capacity of key institutions to manage the oil and gas sector.
On a number of occasions, the Energy Department has told the media that contracts have been awarded via direct or limited tendering. In the face of criticisms that open tendering was not used, the Department has been quick to say that it received the World Bank’s blessings. But the context of this was never given.

Energy Department Head, Dr. Mark Bynoe

According to the Bank’s Guidelines for Procurement of Goods, Works and Non-Consulting Services, it is categorically stated that Open competition is the basis for efficient public procurement. But this is not mandated. Borrowers have the prerogative to select the procurement method for the award of the contract. In fact, the guidelines of the bank specifically state, “The Borrower is responsible for preparing and implementing the project, and therefore for selecting the consultant, and awarding and subsequently administering the contract.
The Bank, for its part, is required by its Articles of Agreement (Bank’s Articles of Agreement, Article III, Section 5(b); and IDA’s Articles of Agreement, Article V, Section 1(g)) to “ensure that the proceeds of any loan are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency and without regard to political or other non-economic influences or considerations.”
The financial institution has also established detailed procedures for this purpose. Once it has reviewed the selected procurement process, and all the procedures were followed, it then gives its blessings to the borrower to proceed.
Since taking on the loan, the Department has embarked on procuring several services via limited and direct tendering. There were also cases where it used open tendering.

See attached chart for more details.