Govt’s delay in price adjustment leaves local firms in trouble


Govt’s delay in price adjustment leaves local firms in trouble

More than 90 per cent construction companies are facing trouble in implementing public sector projects due to the government’s dilly-dallying in adjustment of the skyrocketing prices of construction materials for the last two years.

A small percentage of the construction companies could complete their projects while most of them failed to do so in the face of fund shortage.

Engineer Shafiqul Alam Bhuiyan, President of Bangladesh Association of Construction Industry (BACI), said the government’s dual policy would erode the local companies’ strength and the foreigners would take the lead.

He said due to the discrimination foreigners are getting preference and the locals are not getting the minimum help like price adjustment that can spur the industry.

Project Builders Limited Managing Director Engineer Aminul Islam said the last caretaker government though initially had shown their interest in solving the price adjustment problem, they ultimately did nothing to this effect.

He said if the local contractors are supported, it would accelerate implementation of the ADP projects.

In that case, the local companies will gain strength and the quality of work will also increase, he added.

According to statistics, more than 10,000 contractors are currently engaged in infrastructure development in the country.

He said despite an 8 per cent growth in the construction sector, the ADP implementation still suffers every year.

Foreign-aided projects under the ADP are implemented by both local and foreign companies.

At present, more than 30 foreign firms are working in Bangladesh to implement such projects, a source with the Public Works Department said, adding that they are eating up a good portion of the local companies’ pie.

According to another source with the government’s Public Procurement Regulation (PPR) Department, the competition between the local and foreign firms is becoming uneven, as the government charges zero duty on import of civil engineering equipment and also allows them to take it back on completion of projects.

But the government charges a higher duty on import of civil engineering equipment by the local firms and most of the equipment remains idle after completion of a project.

BACI president Shafiqul Alam said local companies are capable of implementing the projects which are currently awarded to the foreign companies.

“Local companies can participate in the international bidding for big projects, if the government relaxes rules under the PPR guidelines”, he said.

The government can relax the rules in the areas of deposit, bank guarantee, turnover and working capital for the local companies.

A project director under the Planning Commission said the local contractors should be supported by the government to make them capable of handling the development projects.

He said the quality of work of the local companies is better than some foreign companies and if the locals are supported by the government, the foreign companies are no more required.

The Financial Express, 17 August 2012

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