Amid growing concerns over the bundling of contracts within the Petroleum Sector, the Ministry of Natural Resources and the Private Sector Commission (PSC) have agreed to push for the unbundling of contracts in the interest of micro, small and medium-sized enterprises (MSMEs).
“…both sides [have] agreed to continue pushing for the unbundling of contracts and examine a thirty (30) day payment period for small and medium-sized businesses,” the Natural Resources Ministry and the Private Sector Commission said in a joint statement on Wednesday.
The joint statement was issued one day after Chairman of PSC, Paul Cheong met with the Minister of Natural Resources, Vickram Bharrat and representatives of the Local Content Secretariat to discuss issues relating to Local Content. The meeting was held in the Ministry’s boardroom.
Principal among the issues discussed were the unbundling of contracts to allow greater participation by Guyanese businesses and the lengthy time it takes for companies to receive payments.
The meeting took place days after the Georgetown Chamber of Commerce & Industry (GCCI) registered its disapproval over the bundling of contracts within the Petroleum Sector.
It said contract bundling, which is the consolidation of the procurement of various goods and services under one contract, has seemingly become a practice of companies within the Petroleum Sector.
“Contracts are being solicited for expression of interest (EOI) and requests for information (RFI) under one umbrella by various players in the industry. The sum-effect of this practice is that micro, small and medium-sized enterprises (MSMEs) are unable to compete in the space since the ‘bundling’ practice will set an artificial barrier to their participation,” GCCI explained.
Some in the business community believe contract bundling works against the spirit and intent of Guyana’s Local Content Act, and is defeating the objectives of the Act as it relates to private sector development.
It was in that statement, that it called on the Local Content Secretariat of the Ministry of Natural Resources to examine this practice.
However, ExxonMobil Guyana President, Mr Alistair Routledge, in a recent interview with another online news agency, submitted that contract bundling can be very useful.
““Yes, some people have criticised bundling, but it actually serves a very useful function in cascading opportunities through the supply chain whether it’s in running offices, whether it’s providing logistic services or whatever it may be, it is normal practice around the world to have this normal structure in any industry,” Mr Routledge reasoned.
But GCCI and PSC do not agree with Mr Routledge’s line of reasoning, and therefore want contracts not to be bundled.
Aside from the issue of bundling, the Natural Resources Ministry and the PSC also discussed the need for continuous awareness of Local Content issues and greater participation by members of the business community.
It was agreed that the PSC and MNR will convene a one-day forum in September 2022, to discuss Local Content issues. Additionally, both parties agreed to collaborate on conducting outreaches across the country aimed at sensitising Guyanese about the local content legislation and opportunities therein.
“As part of efforts to strengthen the Local Content programme and enable more opportunities for Guyanese businesses, Minister Bharrat invited the PSC to be part of an ongoing process that the Ministry is leading to examine the current schedule in the Local Content legislation and propose changes that can be examined,” a section of the statement read.
The PSC, through its Local Content Advisory Group, has been engaging the Local Content Secretariat on a monthly basis to share information and discuss local content issues.
The meeting was also attended by Chairman of PSC’s Local Content Advisory Group (LCAG), Mr. Shyam Nokta; LCAG Member, Mr. Joel Bhagwandin; Executive Director of the Georgetown Chamber of Commerce and Industry (GCCI), Mr. Richard Rambarran and Executive Director of the PSC, Mr. Ian Chung.
The Ministry’s team included Director of Local Content Secretariat, Mr. Martin Pertab, Senior Petroleum Coordinator, Mr. Bobby Gossai, Head of Compliance, Mr. Mark December and Legal Officer, Mr. Michael Munroe.