Domestic pipe manufacturers will be given priority when Sonatrach issues procurement tenders for future pipeline construction projects. In his
lengthy press conference at the end of December, Energy Minister Youcef Yousfi confirmed that he had instructed Sonatrach to ensure that this happened. The
renewed emphasis on this appears to be related to the financial difficulties
being
suffered by ArcelorMittal's Annaba-based subsidiary TSS El Hadjar.
In principle, domestic producers and service providers have a competitive
advantage built into public tender legislation. They are entitled to win with
bids
that are more expensive than those of international competitors. However,
Sonatrach
has recently been subjected to high level criticism of its failure to issue
pipeline manufacturing contracts to a key local provider.
On 28th December, the powerful general secretary of the Union Générale des Travailleurs Algériens (UGTA) Abdelmadjid Sidi Saïd wrote a public letter to Yousfi about the difficulties faced by TSS El Hadjar in
obtaining pipeline sales contracts from Sonatrach.
In his response, the minister refused to accept Saïd's view that the company had
been subject to “exclusion” from such contracts. He said he preferred to approach the problem from a
technical and qualitative point of view. “We are ready to work with the national companies on condition that they respect
qualitative standards and manufacture all diameters of pipe that are needed,” he said. In addition, Yousfi said that energy companies had been issued with
guidelines to use locally manufactured pipes, but that these guidelines also
set
standards on quality and diameter.
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© 2012 Menas Associates