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Domestic producers of goods and services seek for consensus with Chinese investors

On July 16, 2015 under the moderation of the Chairman of the Committee of the oil and gas industry of the Presidium of NCE RK "Atameken" was held a meeting to discuss the problems of domestic oil service companies with the participation of representatives of the Union of service companies of Kazakhstan, Association “KAZENERGY”, JSC “CNPC-Aktobe", LLP "CNPC International in Kazakhstan and "AF" PetroKazakhstan Intl.".

Representatives of member companies of the Union of service companies of Kazakhstan expressed their claims. As it turned out, the domestic enterprises, which provide goods, works and services to foreign investors, experience difficulties in interaction with Chinese companies. In particular, their problems are related to the lack of informational transparency in the procurements of companies: they usually do not publish ads on large volumes of purchases in the local media.

There are many other problems. The complex internal procedure of undergoing accreditation, which does not guarantee the participation of local companies in the planned tenders. The tender documentation is available in Chinese, or in a confusing format that complicates the process of preparation of tender documentation by local companies.

Interests of domestic companies are rudely ignored. Misconduct is observed on the part of investor companies related to dumping (artificially low prices), which automatically excludes domestic companies from participation in tenders. Most of the local companies cannot compete with foreign suppliers, and they are forced to travel to other regions or to optimize costs by cutting staff. According to participants, the situation may lead to acute social tensions.

According to the representative of JSC “CNPC-Aktobe”, local content in goods for the year amounted to more than 30% vs. 5-7% during the past performance.

Representatives of JSC “CNPC-Aktobe” reject the claims in their address: often potential suppliers from among Kazakhstani companies, which lose a tender, immediately declare it illegal. But what’s interesting: before, winning in similar competitions, they have not seen discrepancies of legislation in the tender documentation.

The representative of Chinese Corporation made a number of proposals for improving procurement procedures. In his opinion, it is necessary to introduce a system of protection of subsoil users from unscrupulous suppliers by analogy with the measures taken by "Samruk-Kazyna". It was also proposed to copy the procedure for calculating local content used in the holding "Samruk-Kazyna" to purchase subsoil. According to representatives of the company, this system is more perfect in terms of attracting bone fide Kazakhstani producers.

Chairman of the Committee of oil and gas industry of the Presidium NCE RK Daniyar Abulgazin noted the seriousness of the raised issues. "Do not underestimate the complexity of the situation, because “CNPC-Aktobe” is one of the core enterprises in  the region, which determines the socio-economic situation in the region", - said chairman of the Committee.

Summing up the discussion, Daniyar Abulgazin announced an action plan to address the stated concerns. He proposed at the site of NCE RK to create a joint working group with the inclusion of representatives of the Chamber, CNPC and the Union of service companies. According to the chairman of the Committee, it is necessary to hold a visiting meeting in Aktobe with the participation of interested local authorities. Also, it is recommended to sign a memorandum between CNPC and the National Chamber of Entrepreneurs "Atameken", which will stipulate compulsory participation of NCE observers in tenders during the procurement.


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