The government announced Wednesday the replacement of bank guarantees with notarized declarations to ease access of Mozambican construction companies to public tenders.

 "The presentation of guarantees has been burdening and limiting their debt capacity" and, thus, hindering access to tenders, due to the amounts paid to the bank and insurance, said the Minister of Public Works, João Machatine, at the end of the Council of Ministers meeting.

"We have no way to prevent foreign companies from competing" by having greater financial capacity, "but we can create conditions for ours to become more competitive," he stressed.

The minister detailed that the government will "replace the provisional guarantee with a 'declaration of guarantee' that will be notarized.

In practice, construction companies "stop losing 2% to 5% of the value of the guarantee," the cost associated with its issuance, when tenders require its presentation and "relieve the 'plafond' of access to the bank to present competitive bids," he explained.

To operationalize the measure, the Council of Ministers approved a decree that revises the Regulations for Contracting Public Works, Supplying Goods and Providing Services to the State.

In the body's final communiqué, it is stated that "the decree aims to increase competition and introduce greater participation of Mozambican companies in public procurement processes, reduce transaction costs, and promote savings in public procurement in the country.

Lusa Agency