Public procurement in the Pacific Islands faces many challenges, especially remoteness and small markets. As extremely small economies – the combined regional procurement spending is only $1.1 billion a year – they deal with limited capacity of the local contracting industry, as well as difficulties in attracting foreign suppliers and contractors.
This translates into limited capacity of the local contracting industry and difficulties in attracting foreign suppliers and contractors. Potential foreign companies are not particularly mindful about opportunities put forward by Pacific Island Countries (PICs) and perceive high fixed costs as a barrier. While these challenges are structural and cannot be completely overcome, they can be mitigated with actions that smartly promote business opportunities in the PICs.
With this in mind, a team of procurement specialists from Sydney Office and HQ and Asian Development Bank (ADB) joined forces with the Australian Government Trade Commission (Austrade) and the New Zealand Trade and Enterprise (NZTE) to promote business opportunities seminars for Australian and New Zealand companies in Perth, Melbourne, Sydney, Brisbane Auckland and Wellington during the period October 12-23, 2015. The objective of the events was to inform the companies about business opportunities and how to secure the contracts funded by Multilateral Development Banks and Aid Agencies with a focus on the PICs.
Over 250 representatives of consulting firms, suppliers and contractors attended the seminars. Industries represented included: infrastructure, disaster management, education, environment, water, and waste water management. The event format included presentations, followed by thematic groups or one-one discussions, where participants had an opportunity to get more specific information and share experiences.
Both Austrade and NZTE indicated that they host such events because there is regular demand from the business community, even from remote parts of Australia and New Zealand. Indeed, it was interesting to note the reception in Perth, which hosted this type of event more than 5 years ago. It was also useful to observe that although participants are typically from the consulting industry (usually SMEs), a significant number of large civil works contractors showed interested in infrastructure investments in Fiji and Papua New Guinea.
Companies take into account several factors before deciding to explore business opportunities, and having detailed information about such opportunities, particularly about medium-term investments plans, is a necessary first step. The coordination between the World Bank and ADB, which have significant investments in the sub region, allows companies to perceive the PICs as meaningful niche markets. The knowledge brought in by trade officials from Australia and New Zealand helps the companies better appraise these worthwhile opportunities.
The Pacific procurement Hub Team is confident that this initiative has a positive impact towards developing effective ways to boost implementation pace in PICs.