Press Release
Dhaka, 25 February 2025: Transparency International Bangladesh (TIB) has stated that the public procurement market has been institutionally captured by a tripartite nexus of bureaucracy, contractors, and political forces. At a press conference to launch its research report titled, "E-Procurement in Bangladesh: Market Concentration, Collusion, and Political Influence," the organisation noted that a syndicate of influential contractors is undermining fair competition through unethical practices, exploiting legal loopholes. TIB also observed that while top contracts may change hands with shifts in leadership at the ministry or government agency level, overall market control persists. Based on this research, TIB has put forward a six-point set of recommendations to ensure good governance in public procurement.
Overall Picture
An analysis of data from 666,474 procurement activities across 66 ministries and divisions between 2012 and 2024 reveals that since its launch in 2011, Bangladesh has spent BDT 5,96,921 crore through the e-GP platform. The highest recorded contract value within this system is BDT 881 crore. All contracts exceeding this value are processed outside the platform. In the top 10 ministries, the top 5% of contractors secured 61.31% of the total contract value, whereas the bottom 10% of contractors held a market share of less than 1% across all ministries.
Market Concentration
In most ministries, the top 5% of contractors have increased their market share over the decade. In the Ministry of Housing and Public Works, the top 5% of contractors secured 74.96% of the total contract value. The market capture by top contractors in this ministry saw an increase of 15%, one of the highest observed. Similarly, a 10% increase was noted in the Roads and Highways Division and the Ministry of Education.
Ministry-Specific Analysis (Who Controls What?)
Roads and Highways Division: Just 11% of contractors (384) secured 93.55% of the total contract value. A mere 35 contractors captured 72.9% of the market.
Ministry of Water Resources: 9% of contractors (336) secured 91.5% of the total contract value. Only 38 contractors captured 30.9% of the market.
Ministry of Housing and Public Works: 7.45% of contractors (607) secured 71% of the total contract value. 81 contractors captured 32.32% of the market.
Local Government Division: 9.74% of contractors (2865) secured 62.88% of the total contract value. 294 contractors captured 27.7% of the market.
Collusive Networks
The primary reason behind this market concentration is the control of large projects by top contractors forming Joint Ventures (JVs). The research identified 9 major contractor networks active in the Roads and Highways Division. In the procurement processes of the Local Government Division and the Ministry of Education, 12 dominant contractor communities were identified. The Ministry of Housing and Public Works has 11 active contractor syndicates. Top contractors have captured a significant portion of the market by forming JVs. The contract value secured by these top contractors through JVs was five times greater than the work they obtained individually.
Political Influence
Changes in political leadership directly influence the dominance of specific top contractors in securing government projects. The dominance of top contractors shifts with changes in political leadership. In Chattogram City Corporation, a complete change in the top 10 contractors was observed following a change of mayor. Similarly, in Cumilla City Corporation, a change of mayor led to a shift in top contractors. Only two contractors managed to secure work during the tenures of both mayors; otherwise, the list of top contractors was completely different in the two terms. A similar pattern was observed in the Ministry of Industries during a change of minister.
TIB's Executive Director (ED), Dr. Iftekharuzzaman, said, "Public procurement is globally one of the most corruption-prone sectors, but in Bangladesh, it has become hostage to unchecked dominance and capture. In a 2018 study, we found that up to 27% of the total procurement budget was wasted due to corruption and irregularities in institutional procurement. The expectation was that the e-GP system would mitigate this loss, foster open competition, reduce corruption, and ensure value for money. Regrettably, while the process has been digitised through e-GP, corruption has not been controlled, nor has open competition been ensured. Instead, the electronic procurement system itself has been manipulated, further institutionalising market capture by the tripartite nexus of bureaucracy, contractors, and political forces. We see that from 2012 to 2024, the top 10 ministries have spent over BDT 5 lakh crores in public procurement, the lion's share of which—61% of contracts—went to the top 5% of contractors. In some ministries, this share exceeded 74%. This means a vast portion of the market is controlled by influential contractors. Secondly, alongside monopolistic control, syndicates of influential contractors have used loopholes in regulations, particularly the provision for Joint Ventures, to obstruct open competition and consolidate their dominance. Furthermore, an analysis of e-GP authority data shows that leadership changes in ministries or government agencies led to a change in who received top contracts, but the overall market control persisted. This is irrefutable proof of the institutionalisation of political control in the procurement sector."
The TIB ED added, "Whether this situation will continue in the post-authoritarian political and bureaucratic context depends on the timely reform of relevant laws, regulations, and the e-GP process. However, achieving tangible benefits will be impossible without a positive transformation in political and bureaucratic culture and practice."
In response to questions from the media, the head of the research team and Director of TIB's Outreach and Communication department, Mohammad Tauhidul Islam, said, "Existing laws related to e-GP are being misused to legitimise irregularities, particularly through Joint Ventures, which have destroyed the environment for open competition. A key objective of introducing e-GP was to increase competition, but we are not seeing that. We believe the practice of market capture, capitalising on legal loopholes, continues, which is why reform of these weak laws is necessary."
TIB's recommendations include: Close monitoring of Joint Venture entities by the BPPA to prevent opportunities for collusive market capture; Enactment of a competition law by the BPPA to break syndicates and limit the scope of Joint Venture activities; Setting a cap on market share for both individual contractors and Joint Ventures to ensure a level playing field; Upholding international best practices by the BPPA and other entities involved in procurement, and playing an active role in creating a competitive market environment instead of a monopolistic one; Amending the Public Procurement Rules to ensure that beneficial ownership information of both individual firms and Joint Ventures is publicly accessible; and expeditiously bringing all contracts that are currently processed outside the e-procurement system under the e-tendering process.
The research findings were presented at the press conference by Mohammad Tauhidul Islam, Director of TIB's Outreach and Communication department. Also present were TIB's Executive Director Dr. Iftekharuzzaman, Advisor-Executive Management Professor Dr. Sumaiya Khair, and research team members Assistant Coordinator Rifat Rahman and K. M. Rafiqul Alam.
Media Contact:
Mohammad Touhidul Islam
Director, Outreach and Communication
Phone: 01713107868
Email: tauhidul@ti-bangladesh.org
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