Response to International and Local Bids
Several stakeholders in the Pakistan construction industry have expressed concern about the apparent poor response to recent international and local bids. The objectives of the study were to evaluate the level of response to recent international and local tenders and to assess the level of interest of international firms to bid on projects in Pakistan. The response to recent invitations to bid on projects across Pakistan has been poor from both international and local firms. Although, tendering was open to both international and local contractors, most firms that submitted bids have been local. Generally, the same set of four or so contractors repeatedly bid for projects across the country, and the lowest bidder always won the contract. There was apparently minimum weight-age given to an evaluation of the technical capability of the lowest bidder. The lack of response in bids and the high prices being quoted can be considered as indicators of supply and demand gaps. There seem to be abundant opportunities for work, and limitations in the contractor ' s capacity to do work are being tested by the current market situation, where there is ample work and the contractors are in a position to choose the works which interest them. In such circumstances, the short-term implications are clear-contractors will demand high premiums for less attractive work and response to bids for work in difficult remote areas with higher risks shall remain especially poor. In a market driven economy, it will take some time until the supply demand situation achieves stability, while for the short term, the clients will be faced with accepting higher bid rates in order to deliver upon their development goals and also accept the risk that the limited pool of contractors may not be able to deliver.