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New National Procurement Law Being Questioned in Light of Odebrecht Scandal

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Civil groups question procurement law

Posted on September 30, 2017 in PanamaPanama

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PRESIDENT  Juan Carlos Varela has approved a law governing government procurement that leaves the door open for companies like Odebrecht that have been convicted of corruption to bid on future projects.

Varela attached his signature a month after the bill was approved in a  National Assembly third debate.

Aneth Planells of the Independent Movement (Movin) said that the new procurement law contains advances in transparency, caps on addenda, limits on best value bids with separate evaluation, but there is still room for improvement.

She considers that it is the duty of the deputies to present a new project that contemplates the veto of these companies and includes the purchase of medicines in public procurement reports El Siglo.

Political analyst Richard Morales stressed that the Procurement Law will not have a significant impact because it maintains methods that affect the State, so it is important to push for changes to benefit the state coffers.

Although some of the excesses in the contracts are limited, it still allows deals that are harmful to the State, such as turnkey ones and the excessive profit scheme at the cost of public resources, in which the costs of the works are socialized but the benefits are privatized “he said.



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$31 million add-on for  bribery linked group

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An addendum of $30.8 million added to the contract signed between Constructora Meco, S.A. and the Ministry f Public Works (MOP) has been by  PanamasComptroller General.

Thw add-on following increments for the completion of Terminal 2 by Odebrecht and an anticipated surge in the cost of completing Metro line 2, another Odebrecht project is raising concerns about the government’s lack of independent experts to analyze construction costs.

The  Meco project is the design, construction, rehabilitation, and widening of the Pedregal-Gonzalillo-Transístmica highway.

The MOP had calculated a fixed cost for the payment of   a bondof $3 million and now an increase to $ 30.8 million, because the amount was “Insufficient”, according to the addendum.

The difference, 10 times higher, is because, according to the MOP, once the technical staff of carried out the analysis and study, it was concluded that more will be required

Meco and other construction contractors of the State -among the GS Corporate Group,

Bagatrac, Rodsa, Conalvías, Concepto y Espacios, and Ingeniería REC- would have rotated in the past administration about $40 million in bribes to MOP officials in exchange for streamlined procedures and disbursements in public infrastructure projects, according to research into the Blue Apple scandal by the Public Ministry.



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Flood suspect seeking new state projects

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ODEBRECHT the Brazilian construction company whose name has become synonymous with  bribery and corruption, But that hasn’t stopped its current leaders from attempting to re-enter the market for Panama’s lucrative state construction projects from which it has garnered  some $9 billion in contracts   handed out by successive administrations  from Martin Torrijos  through the Martinelli years to the Varela era.

The company is currently in the penultimate stages of completing Metro Line 2, Tocumen International Terminal   2, a Colon redevelopment project and a  Panama city highway refurbishing handed out by the mayor’s office which has been widely criticized after unprecedented flooding during the current rainy season.

Now, after being frozen out of the $1.5 billion fourth canal bridge project The Brazilian company  appears to be the likely winner  with a $45 million  bid for a Ministry of Public Works (MOP) project  to rehabilitate streets in  Betania, Curundú, Don Bosco, Juan Díaz, Lefevre Park, Pueblo Nuevo and Río Abajo. In a contest with other international consortia, it has presented the lowest proposal, although by just a few dollars says La Prensa.



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New procurement law lets Odebrecht into the ring


Posted 12/07/2019

Procurement law draft  lets Odebrecht into the ring

Odebrecht, the Brazilian company that has been the beneficiary of billions of dollars for construction projects from  successive administrations and has  admitted having paid scores  millions in bribes to win contracts in Panama, could continue to build for the State

The news comes despite the fact that the draft of the reforms to the Public Procurement Law proposes barring companies that incur crimes against public administration.

In practice, all companies that have signed effective collaboration agreements before the reforms could continue to participate in state tenders reports La Prensa.

The bill, to amend the law, establishes that the judicial cooperation agreements signed with the competent authorities will be respected.

But future malfeasance will be punished. The changes, which the Executive has begun to disclose with different organizations, propose as grounds for inability to contract with the State   acts of corruption that have been sentenced "in firm in Panamanian courts."

It also indicates that companies whose majority shareholders have been convicted will not be able to contract with the State, provided that the crime is linked to the activities of the company or its affiliated companies.

This regulation would apply as of the validity of the law, as it cannot be retroactive, says the of the Presidency, legal advisor Gaspar Tarté. Therefore, the measure will not touch Odebrecht or any other company that has used bribery to win state contracts.

Severo Sousa, president of the National Council of Private Enterprise (Conep), agreed that it would be illogical to go against the legal matter if an agreement was reached before changing the law.

In the case of individuals, the reforms indicate that it will not be possible to hire those who have been convicted in the five years preceding the award.

It refers to convictions by final judicial decision or that have admitted and signed agreements of judicial collaboration where they confess or recognize the crimes against the public administration, money laundering or any other crime against the economic order. The draft reforms have to be presented to the National Assembly for discussion.



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An unedited automated translation of this Tweet:

ASSEMBLY | The plenary is in permanent session to discuss the changes to the public procurement law bit.ly/3cOrJhO


Moderator comment: I find it interesting to see so many empty seats during this session, and on such an important policy level matter. This subject gets to a core issue in mitigating corruption incentives (IMHO).

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