Give preference to local companies: Centre

The Central government has asked the State to ensure Indian companies are not left out of the procurement of goods and services for big-ticket projects.

In a memorandum sent to the State on May 22, the Ministry of Housing and Urban Affairs said the harsh eligibility criteria set by the Centre should not be used to leave out local companies. “It may be ensured that Indian companies are not left out on account of the eligibility criteria in procurement,” the ministry said in its letter address to Chief Secretary Ajoy Mehta.

The Department of Industrial Policy and Promotion (DIPP) at the Centre had, in 2017, issued orders to apply fresh guidelines for procurement of goods and services by the State. The ministry had also directed indigenisation in large projects, including Metro, Mono and multimodal corridors, while imposing standard specification of civil engineering structures.

The 2017 order had said that only local suppliers be considered eligible for the procurement of goods, services or works costing less than ₹50 lakh, with respect to which there was sufficient local capacity and competition. “The ministry had even clarified the necessary specification on rolling stock, signalling system, electrical and electro mechanical Metro rail components along with the eligibility criteria,” a bureaucrat said.

Sources in the government confirmed the ministry is aware of complaints from industry leaders and suppliers on preference being given in awarding of work to joint ventures (JV) with foreign participation.

“There is a feeling among various industry leaders that it is imperative to have a JV with foreign firms to win a contract in Maharashtra. While this is not entirely true, the sentiment does exist and we are keen to correct it by taking some measures” an official from the industries department said. The latest directive from the ministry also recommended that the government give work contracts only after 90% of the land acquisition is complete, and when all necessary environment and forest clearances are taken.

“We are aware of the complaints raised by some local suppliers and industry leaders with the ministry. We assure them that all work orders are being issued as per the policy framework of the DIPP,” the official said.


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