Politics • 23 September, 2019

Centralization of public procurement to allow to effectively regulate local content — Ministry of Finance

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Sep. 23 at the Government session chaired by the Prime Minister Askar Mamin, the issue of increasing local content in public procurement was considered. The First Deputy Prime Minister – Minister of Finance Alikhan Smailov reported on measures taken to support domestic producers in public procurement.

 

According to Smailov, from Jan. 1, 2019, Article 14 of the Law “On Public Procurement” gave the Government of Kazakhstan the right to establish exemptions from the national regime, including for the purpose of supporting domestic producers.

“For these purposes, an exemption from the national regime for a period of 2 years was established for 3 commodity items: motor vehicles, transformers, cable products,” said the deputy prime minister.

In July 2019, a format-logical control was established on the web portal, which does not allow customers and suppliers to sign acts without entering certificates of origin of goods, including ST-KZ Certificates. As Smailov noted, this will help to determine an objective picture of the local content in public procurement and facilitate monitoring.

At the same time, from July 1, 2019, state purchases of furniture and light industry goods are carried out only among domestic producers, through preliminary qualification selection, where the main criterion for choosing a supplier is the presence of an Industrial certificate.

“The portal does not allow customers to make public purchases of such goods in other ways, in addition, it automatically requires the Industrial certificate and the ST-KZ certificate from suppliers,” Smailov noted.

In addition, model agreements on public procurement of construction works have been developed, within the framework of which from July 1, 2019, only construction materials included in the Register of Domestic Producers are used in public procurement of construction works.

Also, from Sep. 1, 2019, public procurement of construction works is also carried out exclusively through prequalification of bidders, in this case, the criterion is an indicator of financial stability.

“Given that this indicator is formed according to the information of state revenue authorities and only for Kazakhstan taxpayers, this norm will also support domestic business,” the deputy prime minister assured.

Starting Jan. 1, 2020, government procurements provide for similar support measures for the services of creating and developing informatization facilities, as well as software and products for the electronics industry. The main criterion for entering the preliminary qualification selection is the presence in the Register of trusted products, which includes only domestic developers.

“As part of the execution of the order of the Head of State, since 2020 in the Pilot mode, centralization of public procurement has been introduced, which provides for the transfer of all public procurement to single organizers at the appropriate levels. After testing and editing inaccuracies, this model will be distributed throughout the republic. The number of organizers will significantly decrease. Administration is simplified, this will allow to effectively regulate local content in public procurement,” Smailov summarized.

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