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Construction firms for domestic preference in int’l tenders

Published : Wednesday, 20 January, 2021 at 12:00 AM  Count : 367

Local construction industrialists want restoration of domestic preference in international tender through an extension of Bangladesh's graduation period to a developing nation by another two years.
Once local firms used to enjoy some facilities in development projects financed by foreign lending agencies but it was withdrawn as Bangladesh was supposed to be developing nation by 2024.
The WTO is likely to extend Bangladesh's gradation period to developing nation by 2026 due to the coronavirus pandemic globally.
Domestic preference is a method in tenders participated by both foreign and local construction firms.
Locals firms used to get 7.5 percent domestic preferences in price quote as they need to compete with big foreign firms who do have heavy financial capacity and other strengths.      Under the World Trade organization (WTO) rules Least Developed Country (LDC) members are supposed to get domestic preference in development projects' tenders funded by foreign multinational lending agencies.
Under such domestic preference around 40 local construction firms got big scale jobs and they developed their expertise in constructing big projects.
But currently local firms are not in a position to compete with foreign firms, said SM Khorshed Alam, President, Bangladesh Association of Construction Industry (BACI) while talking to the Daily Observer.
He said, "We are losing our jobs in the recent time as in strict terms and conditions and in absence of domestic preference local firms are not getting projects as they cannot compete with big foreign firms."
He categorically said Chinese firms are in good position of bagging projects as they do have good financial strengths.
In some cases local may not be capable of completng the projects with low price quotations, Khorshed said.
The BACI President said in this uneven competition the government can persuade the WTO into extending domestic preference by another two years.
Along with pricing local construction industry is also facing several other problems in importing duty-free equipment what foreign firms do and they use those equipment in various other projects.
On the other hand, local firms are importing equipment by paying duty which is also a big threat to survive in this sector.
He said there should be a level playing field for all the participants - either the foreigners should pay duty or the locals should be exempted from paying duty.
According to sector insiders the government is also devising few policies which are not favorable to local firms.
In some projects' tenders the government set condition for local firms that they must have Tk15billion to Tk20 billion before they take part in the tender process.
The Dhaka-Sylhet Four Lane Highway project is one of the examples where local firms cannot participate in the tenders as they don't have that fat amount of money, said an insider.






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