October 29, 2010 / 6:07 AM / 7 years ago

Algerian curbs on foreign contractors now in force

ALGIERS (Reuters) - A series of measures came into force in Algeria on Thursday that will make it harder for international firms to win lucrative construction and engineering contracts in the energy exporting country.

Algeria's President Abdelaziz Bouteflika attends the opening ceremony of the judiciary year at the supreme court in Algiers, October 29, 2008. REUTERS/Louafi Larbi

Algeria has said it will spend $286 billion on modernising the economy over the next five years, and firms including SNC-Lavalin, Siemens and Alstom are likely to bid for public works contracts.

The new rules, which govern how the contracts are awarded, are part of a shift in Algeria towards greater economic nationalism. Officials say they want to give fair opportunities to domestic firms to compete for business.

The measures were published on Thursday in the official gazette, which means they have now entered into force. They do not apply to the energy sector.

Plans to introduce the new measures were originally announced earlier this year. They include the following:

* A new rule requiring any foreign company bidding for a state contract to form a joint venture with an Algerian firm. The tender documents will include a list of potential Algerian joint venture partners.

* A requirement that Algerian firms be considered for a contract even if their bid is up to 25 percent more expensive than one submitted by a foreign firm. The figure was previously 15 percent.

* Another measure states that contracts must first be put out to a national tender — for which only Algerian firms are eligible — and only if that fails or if no local firm is up to the job will foreign firms be invited to bid.

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