System of government procurement in Kazakhstan

July 30, 2014

The system of government procurement in Kazakhstan is to be described as follows:

  • the state organizations carry out government procurement under the Law of the Republic of Kazakhstan „on government procurements”. The state control of carrying out of government procurements on their compliance to the Law, provides their legitimacy and transparency.

  • national holdings and companies, subsoil users, subjects of natural monopolies (further – companies of quasi-public sector) carry out their procurement under their own rules on procurement. Because the law on government procurement does not extend to their procurement, disadvantages of this system are as follows:

–   unequal conditions of access to participation in procurements:  often the affiliates of the companies of quasi-public sector and dominant companies participate in  procurements without any competition;  some rules, provide some exceptions and variations in order tocarry out of procurement without tender;

–   complexity of application: there are different rules on procurement of companies of quasi-public sector (separate for each national holding), which significantly differ from each other;

–   lack of state control: national holdings perform supervising of their own procurement.

For the purpose of unification of all procurement processes in the country and exception of different approaches, the Kazakhstani Agency on protection of the competition is currently engaged in drafting of the Law on procurement for the companies of quasi-public sector.

Considering that within the competence of national holdings and companies is a significant part of the state budget funds we find such approach of unification of procurement procedures quite reasonable and up to date.

Gaukhar Abdigaliyeva