This Country Procurement AssessmentReport (CPAR), prepared by the Bank in close cooperationwith the Asian Development Bank (ADB), is a contribution tothe Government's ongoing public sector reform program.It analyses strengths, and weaknesses in current practices,and outlines an action plan to bring public procurementfurther into line with internationally accepted, bestpractice. With regard to public procurement, Cambodiareceived technical assistance from ADB in 1994-1995,resulting in well-drafted legislation, rules and guidelines,designed to create a coordinated, sound procurementframework in line with good international practice. Througha number of executive decisions made over the ensuing years,however, implementation of the framework has deviated. Thishas resulted in a fragmented approach, without a focal pointfor overall monitoring, and resulting in considerabledecision-making power in the hands of the Ministry ofEconomy and Finance (MEF). This CPAR focuses on actions thatneed to be taken to re-assume the direction intended by theframework, for development of a transparent, publicprocurement environment, with monitoring carried out by asingle agency. The report reviews the status of knowledge ofprocurement procedures, and the harmonization ofdonor-funded projects, in line with the private sectorparticipation. It assesses fiduciary risks, lessenedsomewhat since competitive bidding was introduced in stagesover the past 18 months. However, the fiduciary risk isstill rated high, on account of existing corruption, withlow public sector remuneration creating a climate for rentseeking; weaknesses in the existing regulatory framework;the absence of a sovereign procurement law with a singlefocal point for monitoring and enforcement; the involvementof MEF in the day-to-day procurement process, whichduplicates work, and mitigates against the development ofprocurement expertise in line agencies; and, the loophole inthe 1998 BOT (Build-Operate Transfer) Sub-Decree, that hascreated a virtually closed environment in the awarding ofBOT/concession contracts. Recommendations include, as ahighest priority, to hold tripartite discussions between theGovernment, ADB, and the Bank, in order to agree on anAction Plan for implementing the recommendations of theCPAR, as well as identifying sources of funding for theidentified activities. Moreover, the 1995 Sub-Decree needsto be quickly strengthened, while a sovereign procurementlaw should be enacted. The report specifically stipulatesthe current practice of awarding concession contracts,without competition, and before carrying out feasibilitystudies, should cease. In line with a comprehensive trainingprogram, there should be a progressive move towardsestablishing a single agency that would monitor, and overseeall public procurement, act as an advisory and resourcecenter, and implement procurement training programs.
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