Sunday, August 14, 2022

City Chamber calls on regulators to examine contract bundling practices in oil & gas sector

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The Georgetown Chamber of Commerce & Industry (GCCI) is calling on Guyana’s Local Content Secretariat to delve into “contract bundling” practices being executed by a number of companies in the oil and gas industry, making it clear that it will not support such practices.

In a press statement today, the Chamber cited the recurrent practice as “the consolidation of the procurement of various goods and services under one contract,” adding that it is robbing many local businesses of the opportunity to equally participate in the growing industry. According to the private sector representation body, expressions of interest (EOI) and requests for information (RFI) are being advertised by companies, all falling under one contract.

Companies may employ the contract bundling mechanism to be efficient and cost effective. But in the Chamber’s view, micro, small and medium-sized enterprises (MSMEs) are unable to compete for these contracts since the practice sets an artificial barrier that hinders their ability to secure business.

Recently, the Chamber’s President, Timothy Tucker, who has been continuously advocating for the unbundling of contracts publicly voiced his concerns about the practice. In asserting that this practice places locals at a disadvantage, the Chamber and its President believe that the practice runs counter to the spirit and intent of Guyana’s local content law. When Tucker previously spoke with OilNOW he noted that the local content law sets out 40 areas in separate line items, for which companies must set aside contracts for Guyanese companies and Guyanese nationals.

The Chamber’s statement also alluded to Tucker’s previous comments on the practice’s disregard for the law and sought to make a direct call on the government saying “The Chamber calls on the Local Content Secretariat of the Ministry of Natural Resources to examine this practice and its harmful effects on the full utilisation of the Local Content Act and, by extension, private sector development in Guyana.”

In the past weeks, the GCCI has been very vocal regarding violations of Guyana’s Local Content legislation, the last being a call against ‘rent-a-citizen tactics” being used companies in the oil and gas industry whereby they operate under the guise of local participation.

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