A roundtable discussion was held within the framework of the project “Forum of Entrepreneurs Dialogue” dedicated to discussing the draft Law of the Republic of Uzbekistan “On introducing amendments and addenda to the Law of the Republic of Uzbekistan “On public procurement”.

The event was organized by the Executive Committee of the Political Council of UzLiDeP together with the Center for Supporting Entrepreneurship and Farming of the Republic of Uzbekistan. Members of the UzLiDeP faction in the Legislative Chamber of the Oliy Majlis, representatives of a number of ministries and agencies, party activists and businessmen attended the event.

The main issue of discussion became the equalization of opportunities and conditions of domestic producers and foreign suppliers when participating in tenders.

As it was noted during the roundtable discussion, the draft Law was developed on the basis of the resolution of the President of September 28, 2018 “On measures for implementing the Law of the Republic of Uzbekistan “On public procurement”.

Its development was also facilitated by the resolution of the President “On measures for further development and increase of the export potential of the electrical industry” of January 4 this year. This document contains specific tasks on improving the procedure for implementing public procurement, involving the introduction of a price preference mechanism of up to 20 percent for domestic producers in tenders, competitive selections held within the framework of public procurement of goods (works, services).

Participants of the event emphasized that since the Law “On public procurement” entered into force in order to prevent discrimination of participants in procurement procedures, the provision of benefits or preferences to one participant to the detriment of others does not apply. This created equal conditions for domestic enterprises.

However, the lack of preferences for domestic enterprises creates unequal conditions with foreign companies when bidding. So, when announcing tender and competitive bidding at the expense of public funds, privileges on customs and tax payments are not applied, which leads to unequal pricing conditions for participants, due to the provided export preferences of foreign suppliers in their countries. Expenses of a foreign supplier on the payment of indicated taxes in the territory of Uzbekistan are compensated by the governments of these countries through the use of preferential instruments such as zero VAT rate, soft loans, subsidized logistics costs for exports, etc.

As a result, participants of the event noted, the price offers of domestic and foreign manufacturers are compared under obviously unequal conditions, which entails a loss of domestic producers due to unattractive price indicators.

It has been criticized that the lack of preferences for local producers entails the automatic deprivation of preferences when they participate in international tender trading at the expense of international financial institutions. For example, in accordance with World Bank procurement rules, preferences to domestic suppliers (contractors) should be regulated by the national legislation or by-laws. Otherwise, these preferences cannot be approved by the bank.

At the roundtable discussion, the experience of foreign countries was considered, on the basis of which it was proposed to consider issues of establishment of benefits and preferences for national producers of Uzbekistan, which would contribute to their further growth and development.

The expressed opinions and proposals on the draft Law are aimed at a significant reduction in imports of goods into the country, ensuring full utilization of production capacities of domestic enterprises, attracting investments (including foreign ones) in the sphere of organizing the production of finished products, and not in the sphere of its import, creating thousands new jobs.

Following the roundtable discussion, all expressed opinions and proposals will be summarized and presented to the faction of the party for consideration.

UzLiDeP Press Service