Wheat procurement thru third party in violation of the law

In violation of the public procurement act, a third party has been brought in for the purchase of 500,000 tonnes of wheat from Russia at a government-to-government (G2G) level. While prices are seeing a downslide in the global market, the third party is being used to purchase this wheat at a higher price.

Russian wheat is now a bit higher than USD 300 per tonne in the global market, but the same wheat is being purchased for USD 430, inclusive of shipment costs.

Speaking to Prothom Alo about purchasing the wheat at this inflated rate, food secretary Islam Hossain told Prothom Alo that in all considerations, that wheat is the cheapest. Bangladesh stands to gain.

According to the public procurement act, there is no scope to involve a third party in government level procurement. Also, in a circular issued by the prime minister's office in 2016 regarding procurement at a G2G level it was said that there would be an eight-member committee of the concerned ministries to determine prices and deals.

However, in the case of the entire process of procuring wheat from Russia, the chairman of the company National Electronics, Sattar Miah, and the managing director, his brother Md Amiruzzaman, are involved as the third party.

The prime minister's office circular regarding G2G procurement said that the secretary or additional secretary of the concerned ministry will be the head of the committee to determine the prices. The member secretary will be the joint secretary or additional secretary of the same ministry. The committee will also have members nominated from the finance ministry, law ministry, the National Board of Revenue, the prime minister's office, the Economic Relations Division and the related ministry or department.

When asked about the matter, food secretary Ismail Hossain told Prothom Alo, "I did not know Miah Sattar or Amiruzzaman from beforehand. I was introduced to them during the virtual meeting on the price of wheat. They helped in the agreement."

Speaking to Prothom Alo over the phone from Russia, Sattar said, "I do not want to comment on this matter. Speak to the ministry if you want to know anything about this."

Prothom Alo spoke to two former officials of the procurement department of the food directorate. They said that from 2010, the government has been following another rule in the procurement of rice and wheat. That is, in the case of procuring rice and wheat from any country at a G2G level, an open tender is first floated so as to ascertain the prices. This gives an idea of the prices in the global market. Then negotiations will be carried out with the concerned country to procure the commodity at a lower price than quoted in the tender.

This time too, the food ministry floated a tender on 17 August for the procurement of 50,000 tonnes of wheat. In the meantime, towards the end of August, an MOU was signed to purchase wheat from Russia at the rate of USD 430 per tonne. Towards the end of August, the price fell to near around USD 300. At the same time, the food directorate, on 29 August, cancelled the tender.

On 13 September, a report on the global food grain market and price stated that there had been a good harvest of wheat in four countries including Russia this season. As a result, prices were plummeting in the global market. The price of Russian wheat decreased the most. In one month it fell by 36 dollars to USD 313.

Russia's top wheat exporter in the international market is the state-controlled United Grain Company (OZK). Bangladesh, however, has signed an agreement to import wheat from a different food grain export company of the Russian government, Prodintorg.

Established in 1952, Prodintorg is now running with a reduced staff. National Electronic BD Ltd is its representative in Bangladesh.

National Electronic, established in 2015, basically works in the energy and power sector. They are the local representatives of a number of Russian government and private companies. The company works as the agent of the Russian companies at the Rooppur nuclear power plant. The company also claims to be international partner of companies in China, Ukraine and South Korea.

Managing Director of National Electronic, Amiruzzaman, said, "We work with Russian companies in the energy sector. They wanted our advice about wheat export. That is why we worked as their consultants. I do not want to say anything further."

According to sources, these two brothers work as negotiators regarding the various Russian companies' products to Bangladesh. They had a role in the agreement for the sale of Russian wheat at USD 430 per tonne to Bangladesh.

According to the food directorate, there is presently 1,964,000 tonnes of food grain (rice and wheat) in government stock.

When asked about the matter, Transparency International Bangladesh (TIB) executive director Iftekharuzzaman told Prothom Alo, the government is following an austerity policy in imports due to the global crisis. Despite that, the food directorate is buying this wheat at a high price. The matter needs to be probed. If there are questions about the competence and experience of those through whom this procurement is being made, that too needs to be investigated. Such procurement in difficult times has given rise to apprehensions of significant waste of public resources.