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Monday, 3 July 2017

Government to issue amendments to laws to regulate public spending

Attention government suppliers and contractors. Finance Ministry looking to overhaul tendering process. The government will be introducing a slew of amendments to the Auctions and Tenders Act, where amendments aim to decentralize tendering procedures and unshackle government bodies to be able to quickly select winning bids on projects, El Garhy said according to Al Shorouk. These include facilitating procedures that allow government bodies to purchase key strategic goods directly from commodities and other exchanges. The new changes will also ease restrictions on government bodies to make direct order purchases, El Garhy added. Furthermore, the amendments will promote two-stage tenders in order to give the government a breadth of options when choosing contractors and suppliers. The law will also allow government bodies to lease assets instead buying them outright when it is economically feasible.

The government will also be limiting its spending on projects by placing restrictions on the amount bodies can payout in a tender, a move which also has the added benefit of spurring contractors to reach out to the banking sector for funding.

The amendments will also serve to benefit the private sector in a number of ways, said El Garhy. The law will reduce the security deposit amount required by contractors to at least 1.5% of the tender amount, and will include provisions for the swift return of the deposits following completion of a project. The law will also look out for SMEs, mandating that agencies ensure that 10% of bids of under EGP 1 mn go to SMEs, he added.

Greater oversight on the unpopular “private funds” — state discretionary funds which have gained a reputation as slush funds — will also be among the new amendments to the law, said El Garhy.

The Finance Ministry plans to introduce the amendments to the House of Representatives as soon as possible as part of a package of legislative reforms which include the amended Companies Act, which the Ismail cabinet had signed off on last month, El Garhy said in a statement over the Eid break. Most important of these will be

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