Businesses wary of doing business with parastatals: Praz
THE Public Procurement Authority of Zimbabwe (Praz) has said local businesses are reluctant to do business with the public sector because of its reputation as bad debtors, leaving the firms to deal with middlemen who factored in huge markups, piling pressure on the fiscus.
“There has been growing concern that established firms in various sectors are shying away from directly doing business with the public sector,” Praz chief executive Nyasha Chizu said in a letter dated May 19, 2020 to business organisations.
“The situation has profound effects on the public sector capability to provide quality and cost-effective goods and services.
He said Praz had instituted additional obligations to ensure that public entities honour contracts and ensure that procurement was effected in a transparent, fair, honest and cost-effective way.
Public procurement contracts would also be competitive and provide fair and equitable treatment of all bidders, leading to procurement contracts that represent good value for money.
“The public sector is first exposed to high input costs that are offered by middlemen,” Chizu said.
“The net-effect of an inefficient procurement system impacted directly on your membership that also consumes the utilities and other services.”
He asked organisations to get their members to register as suppliers.
“The authority is further inviting your institution to engage to achieve the implementation of Section 4(1)(e) of the Act for securing implementation of social, environmental and economic policies through public procurement; and Section 29 of the Act for application of domestic preference,” Chizu said.
Public sector entities have a history of not honouring contracts due to either poor funding from Treasury or mismanagement of allocated funds.
The letter was directed to the Zimbabwe National Chamber of Commerce, Confederation of Zimbabwe Industries, Retail Association of Zimbabwe, Grain Millers Association of Zimbabwe, and Engineering Council of Zimbabwe among others.