Agartala City Urban Development Project (RRP IND 53262-001)

Project Procurement Risk Assessment

Project Numbers: 53262-001 Loan Number: October 2021

India: Agartala City Urban Development Project

ABBREVIATIONS

ADB – Asian Development Bank ASCL – Agartala Smart City Limited CAG – Comptroller and Auditor General CCI – Competition Commission of India CDRC – Capacity Development Research Centre CVC – Central Vigilance Commission DGM – Deputy General Manager GFR – General Financial Rules, 2005 GoT – Government of Tripura GOI – Government of India ICB – International Competitive Bidding MDB – multilateral development bank MFF – multitranche financing facility OCB – open competitive bidding PAC – Parliamentary Accounts Committee PIU – project implementation unit PMC – project management consultants PMU – project management unit PPTA – project preparatory technical assistance QCBS – quality-and-cost based selection R&B – Roads and Building Department SBD – standard bidding document TEC – Technical evaluation Committee

CONTENTS

Page EXCUTIVE SUMMARY I. INTRODUCTION 1

II. AGENCY PROCUREMENT ASSESSMENT 2 A. Summary 2 B. Overview 3 C. Strengths 6 D. Weakness 6

III. AGENCY PRIOR AND POST REVIEW (SAMPLING) APPROACH 7

IV. CONCLUSION 7 APPENDIX 1. AGENCY PROCUREMENT ASSESSMENT–AGARTALA SMART CITY LIMITED 9

EXECUTIVE SUMMARY The overall assessment of ASCL is assessed as “Low”. The Agartala Smart City Limited (ASCL) is the agency in the State which has been established to develop Agartala as one of the smart cities selected by Government of India. The city will be developed as an economic and commercial hub for the northeast India and a city of excellence by conserving and promoting natural assets and improving mobility. To provide inclusive, sustainable, and safe environment for social and economic development in Agartala, the smart city intends to improve (i) existing infrastructure mainly urban transport, utilities, civic facilities and services; (ii) decongest the central and north zone of the city by improved walkability, cycling facilities, pedestrian friendly pathways, improved traffic junctions, signal and geometrics; (iii) public realm of the city by reconnecting it with its water based ecosystem; (iv) strengthen ecotourism in city with a redesigned waterfront at MBB College, water sport activities, river cruises and festivals; (v) introduce information and communication technology-based application; (vi) introduce mixed-use planning and development; and (vii) promote solar energy based electricity generation. ASCL has been assessed for procurement capacity for which the report is underneath. Though staff involved are experienced in procurement, there is no dedicated structured procurement team. There is ASCL staff who have handled Asian Development Bank’s (ADB)-funded project under state Government of Tripura’s Urban Development Department. The project management consultant (PMC) is assisting in day today management and other issues related to Procurement. PMC experts have experience of managing ADB funded projects.

ASCL team has limited exposure to ADB’s Procurement Policy (2017) and the Procurement Regulations for ADB Borrowers (2017). Consultants under the project loan will provide awareness and capacity building.

I. INTRODUCTION

1. The Smart Cities Mission (SCM) was launched by the Government of India in June 2015 to create 100 ‘smart cities’ in 5 years (by 2020) to improve urban inequality and living conditions. It is one of the urban schemes launched by government with the ostensible goal of improving the quality of life in India’s cities. The Smart Cities Mission Statement and Guidelines (SCM Guidelines) indicate that a ‘smart city’ will include adequate supply; assured electricity; sanitation, including solid waste management; efficient urban mobility and public transport; affordable housing, especially for the poor; robust information technology connectivity and digitalization; good governance, especially citizen participation; sustainable environment; safety and security of citizens; and health and education.1 2. To accomplish this mission, central government allocated ₹480 billion over 5 years, i.e. an average of a billion rupees to each selected ‘smart city’ per year, with an equal amount, on a matching basis, to be contributed by the state government and urban local bodies (ULB). Each Smart City Proposal includes a ‘Financial Plan’, the competence of this Financial Plan was an important criterion in the selection of a potential ‘smart city.’ Each selected ‘smart city’ is given an amount of ₹200 crore to build a higher initial corpus with an advance of ₹2 crore for the preparatory works. Each ‘smart city’ is expected to receive ₹194 crore in the first year and subsequently ₹98 crore each year after deducting advances and administrative expenses. By matching the government’s contribution, states have to ensure that each city has access to ₹976 crore to complete ‘smart city’ projects within 4 years.

3. States are also expected to seek funds for projects outlined in the Smart City Proposal from multiple sources including bilateral and multilateral institutions, both domestic and external. Other resources could be from states/ULB through the collection of user fees, beneficiary charges, and impact fees, land monetization, debt and loans, Innovative finance mechanisms, such as municipal bonds, Pooled Finance Development Fund Scheme and Tax Increment Financing, Leverage borrowing from financial institutions, The National Investment and Infrastructure Fund, Other central government schemes and Public Private Partnerships (PPP).

4. The Government of Tripura (GOT) acting through the Agartala Smart City Limited (ASCL) will be the executing and implementing agency for Asian Development Bank (ADB) funded project. The project management unit (PMU) is comprised of staff from ASCL, Agartala Municipal Council (AMC) and Urban Development Department (UDD). PMU will establish two project implementation units (PIU). An empowered committee chaired by the Chief Secretary, UDD will provide overall policy and strategic guidance to the project. The PMU will recruit consulting firms and individual consultants to support project management, supervision, monitoring and review of compliance and capacity building. A project management consultant (PMC) is in place who is looking into the overall management of the smart city project.

5. The assessment was prepared in accordance with the Guidance Note on Procurement-Procurement Risk Framework of ADB following ADB Procurement Policy (2017) and Procurement Regulations for ADB Borrowers (2017). 6. The assessment was undertaken in March 2019. Preparation activities included reviewing documents and undertaking interviews with counterparts and discussions with stakeholders. The report covers the Sector/Agency Procurement Assessment(s) and not the Country Procurement Risk Assessment.

1 Smart City mission statement and guidelines has been issued by Ministry of Housing and Urban Affairs (MoHUA).

2

II. AGENCY PROCUREMENT ASSESSMENT

A. Summary 7. The foundation and legal framework for procurement in India is derived from the Constitution of India. Financial powers of the Indian Government are vested in the Ministry of Finance. These powers in turn are delegated to the subordinate authorities under the General Financial Rules, 2005 (GFR) (amended 2017) which, inter alia, prescribe the broad rules and procedures for the procurement of goods and services and for contract management. Comprehensive rules and directives about procurement are contained in the GFR 2005 and Delegation of Financial Powers Rules (DFPR).

8. As India is a union of states, each state, including the Union Territories, have their own rules, guidelines or legislation on procurement. State governments and Central Public Sector Units (CPSUs) have their own general financial rules, which are based on the broad principles outlined in the GFR. Some states have even introduced legislation for procurement.

9. The constitutionally appointed Comptroller and Auditor General (CAG) oversee the accounts of the Union and states. The reports of the CAG on Union accounts are presented to each house of the Indian Parliament, while those relating to the accounts of the states are presented to the legislature of each state assembly. These reports also cover procurement. The Parliamentary Accounts Committee (PAC), the Standing Committees and the Legislative Accounts Committees in the states oversee the functioning of the executive power. To ensure transparency in the process at each level of the Indian Government, a local fund audit for local bodies has been established. Reports on the audits are presented to each state legislative assembly. Government of Tripura follow General Finance Rules (GFR) 2017 for all its procurement and has a manual for procurement of Goods issued by state Finance department.

10. Procurement rules and regulations are guided by Contract Act 1872, Sale of Goods Act 1930, CAG’s Duties, Powers and Conditions of Service Act 1971, Prevention of Corruption Act 1988, Arbitration and Conciliation Act 1996, Information Technology Act 2000, Competitions Act 2002, Central Vigilance Commission Act 2003, Right to Information act 2005. Guidelines are issued by the Directorate General of Supplies and Disposals and the Central Vigilance Commission (CVC) for bringing about integrity in public sector procurement. Public procurements are also subject to review by the CVC, and the procuring entities in all public procurement.

11. A two-tier review system (although not formally specified in the procurement framework) exists for grievance redressal. In the first tier, an aggrieved bidder can report the irregularities to the concerned officials of the procuring entity. As a first-tier review authority, many tenders engage arbitrator (Dispute Review Expert) to resolve any possible disputes in the procurement activities as per the Indian Arbitration and Conciliation Act 1996. In the second tier, the aggrieved bidder can move to the courts for settlements. In many cases, Competition Commission of India (CCI) is also approached for addressing anti-competitive issues in public procurement.

12. Government of Tripura for its own entire procurement has been following eProcurement platform, Government eProcurement System of NIC (GePNIC). The eProcurement platform is built using flexible workflow, user-friendly navigation, interactive dashboard for buyers and suppliers and caters to all types of Procurement processes. As per ADB’s requirement, separate organization has been created on eProcurement platform. User departments of state can perform all Procurement related activities using a single instance. User registered can access multiple

3

modules. The eProcurement platform has been tested and audited by STQC Directorate, Government of India. B. Overview

1. Agartala Smart City Limited (ASCL) 13. ASCL is the executing and implementing agency for the proposed project.

14. ASCL has been formed under the Companies Act 2013 in November 2016. The ASCL is headed by Chief Executive officer; it has one Chief Financial officer and a Company secretary. There is also a board of directors whose chairman is Principal Secretary. ASCL is responsible to plan, appraise, approve, release fund, implement, manage, operate, monitor, and evaluate Agartala Smart City Projects.

15. The purpose of the Smart City Mission is to drive economic growth and improve the quality life of people by developing local area and harnessing technology, especially technology that lead smart outcomes.

16. GOT acting through ASCL will be the executing and implementing agency for ADB funded project. The Chief Executive Officer (CEO) is the head of ASCL. The PMU for ADB funded project comprised of staff from ASCL, AMC, and UDD. PMU will establish two PIUs. The PMU will recruit consulting firms and individual consultants to support project management, supervision, monitoring and review of compliance and capacity building. The PMC is in place who is looking into the overall management of the smart city project. 17. An Empowered Committee chaired by the Chief Secretary will provide overall policy and strategic guidance to the project. Other members of the empowered committee would be Secretary-Urban Development Department (Vice Chairman), Mayor-AMC, Project Director-ASCL, Secretary-Finance, Secretary-PWD, Secretary-Power, Secretary-Planning, Secretary-Tourism (members).

18. The detailed organization chart for Smart city projects (other than ADB funded project) with responsibilities and delegation of power is mentioned in the subsequent pages. 2 The CEO is supported by administrative, finance and technical staff. Amongst the technical staff followings are the composition: (i) Executive Engineer (Civil)-2 Nos; (ii) Assistant Engineer (Civil) - 2 Nos; and (iii) Senior Programmer (IT)-2 Nos. A proposal has been approved vide 12th Board Meeting (17 April 2019) to mobilize more technical Manpower for supervision of ongoing and upcoming works of ASCL, engineers from different categories for different projects on deputation basis from other government departments.

19. Executive Committee has been established with following structures for the purpose of approval of projects, administrative and expenditure sanction of the works/projects, to enter into any contractual agreement or issue work orders for Smart City Projects with certain financial threshold limit (please see the organizational chart).

Table 1: Organizational Chart (Executive Committee) Executive Committee Member

Mission Director, Smart City Mission Chairman

2 Reference: ASCL, Notification No.F16(ASCL)/2017/376-82 dated 1 December 2017.

4

Executive Committee Member CEO, ASCL (Municipal Commissioner), Agartala Municipal Corporation AMC Chief Engineer, Urban Development Department Member Superintendent Engineer, AMC Member

AMC = Agartala Municipal Corporation, ASCL = Agartala Smart City Limited, CEO = chief executive officer 20. In addition, there are two technical committees which has been established for acceptance of tenders and consultancy assignments with certain financial threshold limit (Please see table 2 for the organizational chart).

Table 2: Organizational Chart (Technical Committee) Technical Committee-1 Member

Chief Engineer, PWD(R&B) Chairman Superintending Engineer, Agartala Municipal Corporation Member Superintending Engineer, Agartala Smart City Limited Member Executive Engineer, Agartala Smart City Limited Member

Technical Committee-2 Chief Engineer, Urban Department Chairman Superintending Engineer, Agartala Municipal Corporation Member Superintending Engineer, Agartala Smart City Limited Member Executive Engineer, Agartala Smart City Limited Member Superintending Engineer, PWD (DWS) Member

DWS = Drinking Water Supply, PWD(R&B) = Public Works Department, Roads and Bridges 21. The project working group has been formed for each project under Smart City Mission for inter departmental Coordination, project planning/data sharing etc. and also for monitoring the implementation of the project vide 12th Board Meeting; dated 17 April 2019, The project working group will be responsible for: (i) Approval of DPR; (ii) Technical Sanction on tender/bid evaluation; (iii) overall monitoring, supervision & project implementation; and (iv) Any other matter related to implementation of Social and Environment Safeguard as per ADB requirements from time to time. The ASCL has appointed Tata Consulting Engineers as PMC using Quality- and Cost-Based Selection method.3

3 ASCL memorandum No.F.4(24)(ASCL/2018/677-720 dated 8 March ,2018

5

Figure 1: Organizational Chart

6

22. Procurement Process. ASCL follow process of e- procurement for all its procurement. All procurement is done at ASCL office level. Tenders are technically evaluated and put to Technical Committee – 1 and Technical Committee - 2. Financial powers have been delegated to approve tenders at different levels. The composition of Technical committee is described above in para 23. C. Strengths 23. ASCL has experience in procuring works under smart city projects. The agency follows electronic procurement (eProcurement). The eProcurement generally follow similar steps for bidding process as ADB, preparation of bidding documents following standard bidding documents; posting of invitation for bids in a widely circulated national newspaper and other media; public opening of submitted bids; evaluation of bid by bid evaluation committee; and contract award. ADB technical assistance and project management consultants will assist ASCL in the procurement.

24. The agency is subject to the national procurement law; it uses the national procurement processes, guidelines, and bidding documents. Government issued documents are tailored wherever required to meet sector requirements. The agency does not have its own document/ guidelines it follows state’s manual and guidelines. Only competitive bidding is permitted in the sector. On an average minimum 3-4 bidders in the sector regularly submit responsive bids. There are no restrictions on nationality of bidders or origins of goods and no domestic preference scheme.

25. The procurement methods and operations followed by the implementing agencies are open for International participants also. There are many sectors within the state where foreign bidders have participated in the bidding process and there are large number of state contractors those who participate in International bidding process and have also successfully won many projects outside country.

26. State has its GePNIC eProcurement portal which is used by all state government departments/ agencies. Procurement plans are prepared as part of the annual budget process, and budget availability is confirmed prior to solicitation of tenders. D. Weakness 27. Though many of the staff involved in Procurement have undergone training and have vast experience but there is no structured dedicated team for procurement. There is no full-time designated procurement staff nor there is a procurement cell dealing only with the procurement.

Table 3: Risk Likelihood

Risk Descriptor Likelihood

Score Description Indicative Probability

No dedicated full time staff in Agartala Smart City Limited for procurement, lack of dedicated structured procurement team even though staff have significant

Unlikely 2 Would be surprising if it

occurs

25%

7

experience in procurement matters

Table 4: Risk Consequence

Risk Descriptor

Conse-quence Score

How the risk identified affects the achievement of

Economy Efficiency Fairness Transparency Quality

Value for

Money 1 2 3 4 5 6

No formal regular capacity building professionalization program; lack of dedicated structured procurement team

Minor

2

√

Table 5: Procurement Risk Management Plan

Risk Risk

assessment Risk Measure/ Risk Management Plan

Mitigated Risk

Assessment No formal regular capacity building professionalization program; lack of dedicated structured procurement team

Low These risks will be mitigated through regular Capacity building program by project management consultant and technical assistance support.

Low

III. AGENCY PRIOR AND POST REVIEW (SAMPLING) APPROACH

28. Prior review approach may be adopted for all procurement under ADB funding.

IV. CONCLUSION

29. Overall risk rating is “Low”. The regular Capacity building program under ASCL, with support from the PMC, will mitigate the risk and make the process robust and more efficient. It will also enhance project management, procurement, and contract administration capacity of officials involved. Capacity building will be provided through consultants through the project loan.

8 Appendix 1

Agency Procurement Assessment – Agartala Smart City Limited

Table A1.1: Sector/Agency Assessment Tool Indicators Sector/Agency Questions Score Narrative / Verification or Clarification

Required 1. Legislative and Regulatory Framework 2.6

1.1 Does the national public procurement law (including supporting regulations, standard bidding documents and operational manuals/guides) apply to the sector?

• Is the sector exempted by legislation from being subject to the national public procurement law?

• Even if subject to the national public procurement law, does the sector tend to follow it?

• Do agencies in the sector use government-issued public procurement manuals or guidance?

• Have government-issued documents been tailored to meet sector requirements?

• In absence of government-issued documents, does the sector have its own standard bidding documents/guidelines?

2

The sector is subject to the national procurement law and tends to follow it. It uses the national procurement processes, guidelines, and bidding documents. Government issued documents are tailored wherever required to meet sector requirements. The agency does not have its own document/ guidelines; it follows state’s manual and guidelines. For Externally aided projects, the Standard bidding document approved by funding agency is used.

1.2 Is the supply market for the sector sufficiently competitive to give full effect to the national procurement law and/or open competitive tendering?

• Is competitive bidding a common feature under the sector?

• Is there a core of suppliers in the sector who regularly submit responsive bids?

• What proportion, by percentage, of the sector’s procurement is undertaken through open competitive bidding?

• What is the average number of bidders for publicly bid contracts?

• Do executing agencies tend to make sufficient efforts to attract bids (e.g., adequate advertising, bidding periods)?

• Is there availability and quality of suppliers, labour force, and/or related goods and services in the domestic market?

3

Competitive bidding is only permitted (100%) in the sector than generally evident in the country. A core of suppliers in the sector regularly submits responsive bids. At least five bidders on average per contract submits bid. Executing agencies make sufficient efforts to attract bids through national newspapers and on the eprocurement portal.

1.3 If there is a sector specific legal framework, does it support non-discriminatory participation and transparent tender processes (including advertisement, tender documentation, tender evaluation, complaints mechanism)?

• Has the sector adopted non-discriminatory and transparent tender processes?

• What is the average number of bidders for publicly bid contracts?

2

At least 3-4 bidders on average per contract participate in the bidding and the sector adopts non-discriminatory and transparent tender processes.

Appendix 1 9

Indicators Sector/Agency Questions Score Narrative / Verification or Clarification Required

1.4 Is the sector subjected to excessive regulation or government control such that competition is limited or non-existent?

• Does the sector apply a domestic preference scheme?

• Does the sector require pre-registration of bidders?

• Are there acceptable provisions in the sector for the participation of state-owned enterprises?

3

There are no restrictions on nationality of bidders or origins of goods. There is no domestic preference scheme. Effective preregistration (with state Government department) processes are rigorously followed. Acceptable provisions govern participation of state-owned enterprises.

1.5 Does the legal and regulatory framework enable the sector/agency to use an eProcurement system?

• Does the sector/agency abide by the rules, regulations, and guidelines for the use of eProcurement incorporated in the national procurement laws?

• Are electronic and paper documents considered as equally valid by the sector/agency?

• Are there sector/agency specific tender/bidding procedures, contract management processes, and approval ceilings in the eProcurement implementation?

3

The sector/agency implements the same eProcurement rules, regulations, and guidelines consistent with the national procurement laws. State has its own e procurement portal which is used by all state government departments/ agencies. Electronic and paper documents are equally valid. There is no upper ceiling in e procurement implementation.

2. Institutional Framework and Management Capacity 2.8

2.1 Is the procurement cycle in the sector required to be tied to an annual budgeting cycle (i.e., can a procurement activity commence only when budget has been duly appropriated for it)?

• Are procurement plans in the sector prepared as part of the budget planning and formulation process?

• Do systems and processes in the sector or key agencies in the sector require certification of availability of funds before solicitation of tenders?

3

Procurement plans are prepared as part of the annual budget process, and budget availability is confirmed prior to solicitation of tenders.

2 2.2 Does the system foster efficiency through the use of adequate planning?

• Does the sector, or key agencies in the sector, have a formalized procurement planning process(s)?

3

There is a regular planning exercise that starts with the preparation of multi-year operating plans followed by annual procurement plans with associated expenditures that form part of the annual budget formulation process.

2.3 Does the procurement system in the sector feature an oversight/regulatory body?

• Does the sector fall under the remit of the national oversight/regulatory body?

• If a national body does not exist, is there a sector-specific body that oversees/regulates procurement?

3

There is a state level procurement oversight body that covers agency procurement.

2.4 Is there a public procurement capacity development or professionalization program?

• What proportions of procurement-related officers and staff in the sector have been trained under the national or sector capacity development program or participated in any

2

All staff involved in the process of procurement have gained experience by working with the agency, new recruited staff are trained in e procurement. At least 50% of procurement staff involved have formally attended capacity building program.

10 Appendix 1

Indicators Sector/Agency Questions Score Narrative / Verification or Clarification Required

formal procurement training program?

2.5 Is there a dedicated group institutionalized for eProcurement in the sector/agency’s procurement unit?

• Does the sector/agency use the national eProcurement system, or does it use its own eProcurement system?

• Is eProcurement strategically positioned in the sector/agency’s governance map/long-term development plan?

• How is eProcurement positioned within the overall sector/agency structure?

• Does the sector/agency have sufficient IT infrastructure to support eProcurement?

3

The sector/agency uses eProcurement system of Government of Tripura (http://tripuratenders.gov.in) which handles all e procurement on the common portal. There is a state level oversight. E-procurement is a strategy identified in the sector/agency’s procurement plan. Agency uses the e procurement portal maintained by State IT and finance department through NIC. All procurement is done through e procurement only.

2.6 If an eProcurement system is used, is there a structured approach to capacity building and analysing its effective use?

• What is the sector/agency’s eProcurement capacity to implement the system?

• Does the agency/eProcurement unit recognize the need for knowledge and skill building for the new way of working under eProcurement?

3

ASCL is newly constituted organization in October 2016. Management of ASCL is being looked after by Agartala Municipal Corporation (ASCL). The CEO of ASCL is also the Municipal commissioner of Agartala Municipal corporation, all staff are either from other Government department on deputation or from Municipal corporation. All state government Department and their procurement staff have been using e procurement. All staff involved in procurement have undergone eProcurement training. Agency has been successfully doing e procurement through state e procurement portal. The need for knowledge and skill building is recognised by the agency as this is a continuous process.

3. Procurement Operations and Market Practices 2.6

3.1 Is private sector competitive, well organized and able to access the sector market?

• Is the private sector well organized and able to access the sector market?

• Do civil society organizations regard public procurement in the sector to be open and accessible to the market?

3

The private sector is competitive, well organized, and able to participate in the competition for sector procurement contracts. There are no major constraints inhibiting private access to sector procurement. To access the e procurement state portal, one has to register and create its own login and password.

2 3.2 Do measures exist in the sector to ensure the adequacy and accuracy of cost estimates before bidding, and to manage contract price variations?

• What percentage of contracts are awarded for values less than the original cost estimates?

• What percentage of contract variations amount to a cumulative impact of more than

1 3

About 25% of contracts are awards for value less than the original cost estimates. Less than 10% of contracts awarded go beyond 10% variation beyond the original contract price.

Appendix 1 11

Indicators Sector/Agency Questions Score Narrative / Verification or Clarification Required

10% of the original contract price?

3.3 Is the private sector able to access and fully participate in the agency eProcurement activities?

• What functions exist and are being used in the sector/agency eProcurement system?

• Are all forms available/accessible online?

• Do bidders pay any fees for the use of the system?

• What other government IT systems does the eProcurement system link to?

• Are foreign bidders able to participate in sector/agency’s eProcurement system?

• What percentage of sector/agency’s total bids are transacted through the eProcurement system?

3

Private sector is generally able to access and participate competitively through eProcurement; the eProcurement system is an end-to-end solution; there are no constraints prohibiting any firm to access or use the sector/agency eProcurement system. GePNIC eProcurement system is used by all state government department/ local bodies/ boards/ corporation. All government organisations are registered on the e procurement portal. All forms are accessible online, bidders have to pay fee for use of system. The eProcurement system is not linked to any other IT system. Foreign bidders can access the portal as well. ADB organisation has also been separately created in the e procurement system.

3.4 Do commercial bank practices support the private sector industry and procurement operations adequately?

• Have banks delegated powers to branches to issue bid security, advance payment security, and performance security expeditiously?

• Do banks generally play a supporting role in assisting contractors, especially small ones for obtaining such securities?

• Do banks generally provide necessary credit facilities to the construction industry (especially small and medium firms)?

3

Bank branches have adequate powers to issue bid securities, advance payment securities, and performance securities without major delays and reference to headquarters. Private sector is generally able to access bank credit facilities without much hindrance. Banks play a supportive role in assisting contractors and provide necessary credit facilities.

3.5 Is there a mechanism in the sector to receive and handle observations, complaints, and protests?

• Are there sector-specific procedures to receive and handle observations, complaints, and protests?

• Are complaints and protests in the sector processed within the maximum time limit provided for in the law?

• Have bidders used the complaint and protest mechanisms?

3

The complaint review system has precise and reasonable conditions and timeframes for decision with clear enforcement authority and mechanisms; more than 90% of complaints are processed with stipulated timeframes. Complaints which are complex and becomes matters of litigation, it takes time in resolution as these are beyond the purview of agency.

4. Integrity and Transparency of the Sector Public Procurement System 2.75

4.1 Is there a formal internal control and audit framework in the sector?

• Do key agencies in the sector have an independent internal audit function?

• Do key agencies in the sector have adequate internal control

3

The sector has an effective internal control framework including an independent internal audit function; annual financial audits are conducted; audit recommendations are

12 Appendix 1

Indicators Sector/Agency Questions Score Narrative / Verification or Clarification Required

mechanisms to oversee the procurement function?

• Are key agencies in the sector subjected to regular performance or value for money audits?

• Are key agencies in the sector subjected to annual financial audits?

• Are internal or external audit findings/recommendations acted on in a timely fashion?

implemented within six months; no significant outstanding audit findings for more than six months.

4.2 Is information pertaining to public procurement in the sector easy to find, comprehensive, and relevant?

• What percentage of bids are published in a medium that is easily and freely accessible?

• Can bidders easily and freely access bid information?

• What is the percentage of contract awards announced in media that are easily and freely accessible?

• Are third party observers invited to attend public biddings?

3

All bids are published on freely accessible site maintained by state e procurement portal. Awards are not published in newspaper / media but once the selection is finalised the name of successful bidders are declared on the same state portal. It is also published on the agency’s web site for monitoring. Bidders can easily and freely access bid and contract award information; members of finalization of bid committee are from other departments like PWD and PWG (project working group) City level advisory forum exists and get involved in the process as and when needed and regular meetings are held.

4.3 Can bidders and other stakeholders easily access sector/agency’s procurement information through the eProcurement system?

• What is civil society’s involvement in the eProcurement system?

• What kind of dynamics exist between/among private sector and other stakeholder groups?

• Are bidders and other stakeholders able to monitor all the sector/agency’s eProcurement transactions?

3

At least 80% of bids and awards information are published and are readily accessible at all times on an eProcurement site; third party observers from civil society organizations and other partner groups are able to access and download eProcurement information (those registered with e proc portal). Generally, very cooperative relationship from all stakeholder groups; civil society organizations and other partner groups able use eProcurement system for monitoring. City level advisory forum get involved in the process as and when needed and regular meetings are held

4.4 Does the sector have ethics and anticorruption measures in place?

• Are there sector-specific procedures to verify a bidder’s legitimate existence, track records, financial capacity, and capacity to complete the job?

• Are there sector-specific procedures to rate performance and/or debar bidders, suppliers, contractors, and consultants for ethical or integrity violations?

2

The sector has mechanisms to debar firms for failure to perform and/or integrity violations, or mechanisms to report suspected violations to a national or sector wide anticorruption body; the sector has sufficient supplier due diligence processes; the concept of conflict of interest is defined. There are procedures to verify a bidder’s legitimate existence, track records,

Appendix 1 13

Indicators Sector/Agency Questions Score Narrative / Verification or Clarification Required

• Does the sector, or key agencies in the sector, maintain a register of debarred suppliers, contractors, and consultants?

• Are there sector-specific integrity principles and guidelines?

financial capacity, and capacity to complete the job and also to debar in case of failure. Agency follow the register of debarred contractors, at the time of debarment it notified to all other departments officially.

a With an overall average score of 2.71, the procurement assessment is categorized as low risk rating. b ASCL with support from Project Management Consultant (PMC) who is already in place and fully mobilized to assist in project

management, procurement, and contract administration. c Agency procurement assessment done for ASCL – Agartala Smart City Limited d Person consulted: Mr. Gautam Mukherjee – CFO ASCL