Wednesday, August 17, 2022
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    BusinessAgencies reluctant to dispose of property, submit purchase plan

    Agencies reluctant to dispose of property, submit purchase plan


    Public Procurement Service has accused federal offices and agencies of failing to submit their purchase plans as per the required timetable, this year.

    The federal offices are required to submit their purchase plans to the Federal Public Procurement and Property Disposal Service before June 7, every year.

    In its annual performance report, the Service stated that 70 percent of the federal offices have failed to come up with their plans within the given timetable.

    In a related news, the Service has made a 9.6 billion birr worth of purchase over the past budget year from both local and foreign suppliers of goods and services. The amount of the purchase, in 2016 budget year was worth 18.7 billion birr.

    This fiscal year’s purchases show a significant decline in terms of volume as well as the amount.

    The 2016 budget year was mostly dominated by purchase of wheat to mitigate the impact 0f the last two years’ El Niño induced drought. In 2016, the Service has purchased wheat worth 11.1 billion birr.

    As far as the 2016/17 budget year is concerned, the Service has signed 49 different contracts on behalf of different federal agencies and public universities. The contracts were made to purchase items such as vehicles, reinforcement bars, and construction of buildings.

    The same fiscal year, the Service has managed to collect total revenue of 96.8 million birr through selling of used vehicles, office equipments and scrap metals. From the total revenue, 65.4 million birr was generated from scrap metals.


    In 2016, on behalf of the federal budgetary offices, 140.7 million birr was earned from the disposal of scrap metals, other materials and the sale of vehicles.

    The Service attributes the decline in the revenue to the reluctance of agencies to dispose of the items properly.

    An assessment done last year by the Service found out that close to 166 government offices and universities has an accumulation of significant number of disposable items which are estimated to cover 5,000 square meter of land.

    Following this assessment, Ministry of Finance & Economic Cooperation gave 108 institutions the right to dispose the materials by themselves lifting the limit it has placed barring institution from disposing materials worth more than 100,000 birr by themselves.

    However, out of the 108 agencies and universities, only 48 of them were able to dispose the items and generate revenue.

    Established in 2010, the Service has the power and responsibility to carry out the procurement of goods and services falling within the list of common user items to public bodies as well as goods and services which have national strategic significance.

    Similar trends indicate that, the country spent significant portion of its budget to procure a number of necessities.  In this respect, over 60 percent of the budgets of many public institutions go to procuring public goods and services. 

    By Dawit Endeshaw

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