Contrasting perceptions : a case study of entry barriers to participation in public works contracting by micro enterprises in India and Pakistan

There is growing interest in encouraging private sector involvement in the construction and maintenance of public works in developing countries, and a preference to involve micro-enterprises in this work so as to achieve economic benefits and enhanced local employment for the poor. However, the administrative and procedural requirements of the public sector act as barriers for many small-scale contractors and hence discourage their participation in the procurement process. Whilst most clients and most contractors agree with this proposition in principle, their perception of the nature of the barriers and the practicality of their removal are likely to differ. This paper describes the results of practical research carried out in conjunction with the Karachi Metropolitan Corporation and the Pakistan Public Works Department, and a range of Indian officials from public works departments, coupled with a questionnaire survey and direct interviews with proprietors of micro-enterprises. The study reveals the contrasting perceptions of contractors and clients’ representatives, and concludes that clients are sometimes excessively concerned with eliminating risks that are not particularly serious in the context of a highly competitive environment with relatively large programmes executed through small contracts by large numbers of very small enterprises.