According to the head of the Board of "Atameken", 70% of local content in the procurement of quasi-public sector consists mainly of services, rather than goods

At the National Chamber of Entrepreneurs of Kazakhstan "Atameken" was held a regular meeting of the Council on combating corruption and the shadow economy chaired by Kairbek Suleimenov. It was attended by representatives of the General Prosecutor’ of Kazakhstan, the National Anti-Corruption Bureau of the Ministry of Civil Service Affairs of Kazakhstan, national companies and businesses, MPs.

Ablay Myrzakhmetov, speaking at the meeting noted that in Kazakhstan there are three procurement areas, their total amount is about 9 trillion tenge, which is more than the budget of the entire country. "The first area - state procurements, national and local, which make up a little more than 2 trillion tenge. That's all that buy central executive bodies and local executive authorities. More than 3 trillion tenge falls on purchases of the quasi-public sector in the first place, it is the national company "Samruk-Kazyna", of which 8 companies - 93% of all procurements. With these companies, we have recently signed an agreement. Another 3 trillion tenge - is the procurement of the largest subsoil users. This area should also not fall out. We will devote one of the Council's meetings to it, there is also a lot of questions", - he said.

The Chairman of the Board of NCE noted the importance of the presence of law enforcement bodies in the cases to insure rule of law in procurement. "They understand their role, task, to show the inevitability of punishment. I think this should be a main message. Such is the will of the Head of State, the requirement of the public, including businesses. Officials must understand the inevitability of punishment. All proposals were heard today about how to prevent corruption-related crimes. The public and, including NCE, should monitor all these processes", - he said.

Myrzakhmetov called the three phases of the procurement process, where the public should be on alert. "The first is a technical specification. Every year our central office receives over 300 complaints regarding procurement. According to businessmen, technical specification of all tender documents are adjusted to particular suppliers. We have repeatedly raised this issue, there is progress. The new law "On state procurements" now agrees that 10 days before a procurement a technical specification will be made public and the public will have the opportunity to give their comments prior to the tender ", - he said.

Ablay Myrzakhmetov cited the example of a situation when Kentau Transformer Plant did not win the tender for 80 million USD due to the fact that the technical specification was adjusted for a foreign company to win. "In fact, it could be an annual order for the plant. And now because of the difficult situation 300 staff of 1,000 people might lose jobs. There are many facts", - said Myrzakhmetov.

The head of the Board of "Atameken" referred to the fact that with all the voiced criticism towards "Samruk-Kazyna" during the meeting, the Chamber and Fund  have certain agreements. He noted that the management of "Samruk-Kazyna Contract" always responds to the calls of NCE RK, however, as it turned out, they have no effective mechanisms to influence on the procurements of national companies, so their requirements are not fulfilled.

"Second is the very procedure of procurement. We refused to participate in the Commission and stand as independent observers", - he continued.

The third stage, during which there might be also violations, according to Myrzakhmetov - it is postmonitoring. "After the tender was held. Previously, there have been cases when, for example, in one of the national companies, an applicant  was 5 minutes late as a security guard wouldn’t let him in, and due to this circumstances he was eliminated from the tender. The explanation is - he didn’t make it before the opening of the envelope. That is, there are many ways to get rid of applicants", - said Ablay Myrzakhmetov.

The Chairman of the Board of the Chamber also announced that at the next annual meeting of NCE with participation of the Prime Minister, the issue of procurements will be one of the major and he promised to present all the sounded proposals today for consideration for the adoption of concrete measures.

"Separately, I would like to say that there are questions to business. We now addressed to the associations, asking them to create a pool of independent technical experts who will monitor technical specification during procurement. Plus there are observers who follow the procedural violations", - he said.

Myrzakhmetov stressed that corruption - is a matter of both sides. "Business must also comply with anti-corruption standards. This work is carried out. At the Congress, we will consider the issue of the Anti-Corruption Business Charter. We hope Congress will support it, because business must also make commitments, it is a two-way process", - he said.

The Chairman of the Board of NCE said that the Chamber is concerned about the issue of the share of local content in the procurement of quasi-public sector, as in the present circumstances the compression of demand greatly affected the domestic business. According to him, local companies make up just over 60% of 9 trillion tenge in procurement, among “Samruk-Kazyna” procurements - more than 70%. However, goods constitute a very small proportion of these 70%, in general, these are services. "We have to understand in detail and to increase the share of domestic producers it. With eight companies, we have done this kind of work. Frankly to say, "Samruk-Kazyna Contract" had the will, but the leadership of the companies didn’t really welcome it. We were able to sign the agreement with some difficulty under the pressure. Now we are working on transparency of all procurements. On our part, we have a list of more than 4 thousand domestic producers, we work on them with commissions and national companies", - he said.

In this regard, on behalf of the First Deputy Prime Minister Bakhytzhan Sagintayev in all regions together with the Chambers and akimats were created working commissions.

"Our monitoring has shown that the procurement of furniture in the national companies of "Samruk-Kazyna" in the amount of 70 billion only 3% accounts on Kazakh producers. And we have nearly 300 furniture companies, which could participate. That is, the field for the growth of local content is huge", - he stressed.

Myrzakhmetov highlighted five areas where the work is carried out actively: Almaty, East Kazakhstan, Aktobe, Kostanay and Pavlodar. "I would ask Akimat to be more actively involved in this work. At the Congress we brief the Prime Minister on the situation and ask to take disciplinary action. Kyzylorda did not hold a single meeting, although the tenders are held since the end of April ", - he said.

"We believe that it is necessary to reduce the share of quasi-public sector. It should be a maximum transmit it to the market, then the temptation is smaller. With all due respect to government managers, private owners do better. The government should as much as possible through the announced privatization program move away from non-core sectors and leave only what the state needs ", - concluded the head of the Board of NCE.