An evaluation of the public procurement systems and how they impact on the competitive of state-owned entrprises in the post - deregulation era : the case of TEL-ONE (PVT) LTD 2009 - 2012

Abstract

This study sought to evaluate the public procurement systems and how they impact on the competitiveness of commercialized state-owned enterprises (SOEs) with a specific focus on TelOne (Pvt) Ltd. The objectives of the study were to highlight the nature of the public procurement systems and to evaluate their effectiveness in supporting TelOne’s competitiveness in the face of deregulation and competition from privately-owned rivals. The study also intended to determine the challenges within TelOne’s procurement regime as well as to suggest possible reforms that could be adopted so as to enable TelOne to be competitive once more. The research reviewed both theoretical and empirical theories underpinning the role of SOEs, deregulation and public procurement. The rationale and principles governing public procurement systems were also reviewed.

The scope of the study covered the entire organization in the period from January 2009 to July 2012. The targeted population was restricted to TelOne’s 667 members composed of professional or skilled workers, supervisors, managers and departmental heads. The population was first split into four hierarchical strata, after which systematic sampling was applied to each stratum. A sample of 70 was drawn. The main data collection instrument, the self-administered questionnaire, was distributed by hand, fax and e-mail and a response rate of just above 75% was achieved.

The study found out that TelOne’s procurement regime is governed by stricter and rigid legislation and procedures compared to its privately-owned rivals. It is also highly centralized, with an underpinning philosophy of competitive bidding, which encourages arms-length relationships with suppliers. The system has many challenges that include rigid procedures, bureaucracy, too many decision makers and shortages. Given the competitive environment in which TelOne is operating in, the study concluded that the procurement system is not supportive to organization’s competitiveness. The study recommends that the board and management should lobby the government to exempt TelOne from the ambit of the Public Procurement system or alternatively to amend the regulations to suit the competitive environment in the telecommunications sector.