Preferential treatment of local goods could increase

Tender: In a bid to substitute import and promote local products, the percentage of price of goods of Bhutanese origin could reach 10 percent as long the tenders are of equivalent quality when procuring goods.

The preferential treatment to goods of Bhutanese origin was five percent. The proposal has been sent to the government.

The issue was discussed in the recent seminar organised by the EU-funded Green Public Procurement (GPP) Bhutan project based in Thimphu.

GPP’s senior project officer  Yeshey Penjore said the project is working with the cottage and small industry department on the issue. Locally produced goods could be specified in public tenders.

The locally produced goods include Bhutanese made furniture, locally made bricks and Bhutan-made plant based cutlery and crockery.

However, a State Trading Corporation Ltd. (STCBL) official during the meeting said local producers are not able to produce in large quantities to meet the demand. He said Bhutanese products are generally expensive and that there was no market for local producers to manufacture in large quantities.

“We have just about 700,000 people. Where do we sell our products if we produce in masses,” he said.

Officials said there are provisions for the use of local materials and domestic suppliers or contractors in public procurement in Bhutan.

An entrepreneur said that the government agencies are not willing to buy locally produced goods that are generally more expensive than the imported ones. For instance, she said a hand-made waste bin costs Nu 200, where as an imported bin cost less than Nu 100.

“Agencies are willing to buy the cheaper bins made of plastic,” she said. “We really can’t find the market,” she said.

The GPP project is proposing the government that pilot tenders activating this provision for local content should be prioritised and framework agreements could become valuable tool for aggregating supply from several suppliers.

In works and services, the public sector already purchases a significant amount from domestic suppliers. However, the tangible goods procured are almost entirely imported.

In a study carried out by the GPP Bhutan, it was found that suppliers were not aware of the provisions found in the PRR 2009 on the preferential treatment and other policy incentives for local products.

MB Subba

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply