Procurement procedures must benefit locals in oil and gas sector

Procurement procedures must benefit locals in oil and gas sector – Energy specialist

Sep 07, 2017 News

In order to ensure that Guyanese contractors and entrepreneurs benefit from the procurement of works and services that will flow from the emerging oil and gas sector in Guyana, it is recommended that procurement procedures must

Anthony Paul

be instituted in this regard.
This recommendation came yesterday from the Principal Consultant of the Energy and Strategy Association of Caribbean Energy Specialists Ltd., Anthony Paul. The expert, a Trinidadian, was at the time making a presentation on Guyana’s Draft Local Content Policy Framework to a gathering of stakeholders yesterday at the Marriott Hotel.
With the new industry gradually coming on stream, it is expected that there will be procurement opportunities for goods and services to support sector operations.
According to Paul, Guyana needs to ensure that the procurement procedures enable its locals to participate in the procurement process. Giving a practical example, Paul said that the process can be manipulated to suit particular contractors.
“Similarly with services and equipment, I can say I need a table and there is a guy up the street who is making tables, but I want my friend to give me that table, so I say I need tables, chairs and doors. The guy up the street does not make chairs, so he is disqualified. So you have to make sure that the procurement procedures enable the locals to participate.”
He said that what needs to occur is that there are proper procurement regulations.
“You cannot close all loopholes. That is the essence of this policy, trying to get the pieces in place to ensure you get what you want. The policy is saying that to get there, let us have some groundwork, let us have some policies to work with. What the policy is saying is first, give preference to Guyanese.”
Despite there being the need for proper procurement measures, Paul said that this is still not enough. He said that there must be ways that Guyanese can expand their competencies so that the calibre of persons and services offered can be enhanced.
Further, he said that one of the challenges countries like Guyana and Trinidad and Tobago face is that the legislature inherited would have been conditioned to place on the law books in the 1960s and 1970s, laws providing that for local goods and services to be used, the cost and quality should be the same as being imported.
In addition, he said that locals never having worked in the industry will never have the competencies of the competitors. “So what needs to change is not that you will use what you have, that you will build what you have to become competitive.”
Giving another practical example, Paul said that if a service is for 20 years, and the first contract is up at five years, the local contractor that is incompetent will not get the contract. “Five years later, he has not practiced, still is not competent. So one, we have to make sure that what you have is improved in quality, and two, we ensure that what we have can be expanded.”
He explained that there are things that Guyanese cannot do and there is need to build capacity, train people and improve the quality of certification of people.
Meanwhile, Minister of Natural Resources, Raphael Trotman delivering brief remarks at the event explained that following the first announcement of oil being found in 2015, the government worked with the United Nations Development Programme (UNDP) to have Paul come to Guyana.
Trotman said that Paul would have given the Guyana government an assessment that was concluded in December 2016. He said that with that document, government sought to put a framework in place as well as the various parts of what the petroleum sector should look like and how it should be developed.
Trotman explained that earlier in the year the policy was sent out. He reminded that it is only a draft and that comments and critiques are being sought. “It was never meant to be a final draft or final document, it was meant to be a working draft which Mr. Paul had developed with his expertise in Trinidad and Tobago, his experiences elsewhere, and his advice to us as to how he believes this should be shaped.”
The Minister said that one of the critiques of the policy is that it lacks specificity as it relates to corruption. However, he said that the local content policy is interested in getting people into business rather than to be addressing issues of corruption.
“We have the Integrity Commission Laws for that. We have the EITI procedure which we are bringing into place. We have all the laws which will take of that. So I wish to underscore that we have until now is a working draft and over the next few weeks we will be going throughout Guyana, meeting with the Chambers of Commerce and meeting with other entities for views and opinions on how we can have what is truly a national policy for local content.”
Trotman said that his government is hoping that the local content policy can become a national model for other industries and not just the petroleum sector.