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Suppliers grumble over govt. favouring foreigners for tenders

10 December 2015 02:52 am - 0     - {{hitsCtrl.values.hits}}

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The local suppliers are grumbling that the government is providing preferential treatments to foreign suppliers over locals in its tender processes, Mirror Business learns. 
“Local suppliers have to register with the government by paying Rs.500 per item. Then only they get to make inquiries and are placed on a list. Foreign trading companies are in that without registration,” a local supplier who wished to remain anonymous said.

Further, foreign companies are provided advanced payments to supply goods or services, while locals are asked to provide the government a 30-day credit period.
“The government asks for credit from all local companies. Then they should also do the same with foreign companies. There is no level playing field. But foreign companies won’t supply if they have to do so on credit,” the source added.
Accordingly, foreign companies purchase the materials of the tender by using the advance payment as well as low interest rates globally, while local companies have to finance the tender with 10-12 percent interest rates—which may rise further shortly.
“Since interest rates are high, locals have no margins,” the source added, who also revealed that there is a circular which says that local suppliers should be provided a 20-25 percent margin, which is not being practiced by the government.
“If they implement as per the circular, there is no problem,” the source said.
The issue has been brought to the attention of Finance Minister Ravi Karunanayake, who said that a solution will be provided soon. (CW)

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