Three fifths of Belt and Road contracts go to Chinese firms

Will Green is news editor of Supply Management
19 June 2019

Procurement around Belt and Road Initiative (BRI) projects must be open, transparent and competitive if countries are to benefit from them, according to the World Bank.

In a report assessing the BRI – China’s infrastructure plan to strengthen trade links across Asia, the Middle East, Africa and Europe – the bank said contract awards should go “to the firms best placed to execute a project, regardless of their ownership or nationality”.

The report said studies suggested more than 60% of Chinese-financed BRI schemes are allocated to Chinese companies, and while other countries favoured domestic firms in public procurement to support local employment and investment, the bank questioned whether this was good practice.

“Little is known about the processes for selecting firms,” said the report. “Moving toward international good practices such as open and transparent public procurement would increase the likelihood that BRI projects are allocated to the firms best placed to implement them.”

The report said work to improve procurement practices should involve efforts by BRI host countries and China, along with the use of international agreements such as WTO.

“A basic takeaway is that having better information about the public procurement processes associated with BRI projects would benefit all parties participating,” said the report.

“The absence of comprehensive and comparable data makes it difficult to determine the effect of applied policies and processes on outcomes. Better knowledge of procurement would help in assessing the impacts of BRI projects, both in the construction phase and thereafter, and in evaluating the effectiveness of procurement processes in attaining value for money.”

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