Integrated Annual Report 2023
ҚАЗ
РУС
ENG

Procurement practices

Our approach

GRI 3-3

Kazakhtelecom takes a responsible approach to interaction with suppliers. The Company seeks to cooperate only with honest, reliable and transparent partners.

The Company supports the national policy on development of domestic producers of goods, works and services under the conditions of innovative development of the national economy.

Key priorities of Kazakhtelecom JSC’s procurement activities:

  • transparency and openness of procurement;
  • competition in carrying out procurement procedures;
  • support and development of local suppliers.

Samruk-Kazyna SWF’s Procurement Procedure as adopted in the new wording in April 2023 regulates the Kazakhtelecom’s procurement activities. As a result of the introduced changes, the functionality on competitive methods of procurement was finalised, preferences for small and medium-sized businesses were provided, and items on support of domestic producers were added.

The Fund’s e-procurement information system is a tool for managing procurement processes. The Fund’s e-procurement information system is a single portal where the full cycle is performed: from planning the need for goods, works and services, procurement, conclusion and execution of contracts to delivery of goods to the warehouse.

More details can be found on the portal zakup.sk.kz.

Since 1 April 2022, the Fund has in force the Procurement Procedure approved in a new version by the Board of Directors of Samruk-Kazyna JSC on 3 March 2022.

In accordance with the requirements of the Law of the Republic of Kazakhstan On Procurement of Certain Entities of the Quasi-State Sector, the Ministry of Finance of the Republic of Kazakhstan agreed the new version of the Procurement Procedure (hereinafter - the Procurement Procedure). During the development of the draft Procurement Procedure, the Fund held discussions and consultations with both the authorities and the business community, including: the Ministry of Finance of the Republic of Kazakhstan, the Agency for Protection and Development of Competition of the Republic of Kazakhstan, the National Chamber of Entrepreneurs of the Republic of Kazakhstan Atameken. Based on the results of discussions, the document took into account the main comments of government authorities and constructive proposals of the business community.

The new edition of the Procurement Procedure contains description of all procurement procedures without reference norms to other documents and is a document of direct action. In addition, the grounds for single-source procurement have been significantly reduced, transparency of the procurement category management process and preliminary qualification selection has been increased with the involvement of the National Chamber of Entrepreneurs of the Republic of Kazakhstan Atameken, public associations and unions in these processes, new measures to support domestic producers and SMEs have been introduced.

To improve the procurement process, the Samruk-Kazyna Fund takes an active part in the process of reforming the procurement of all regulated entities on a national scale together with the relevant state bodies and the business community.

Improvement of procurement system

The Company carries out procurement procedures by the following methods of procurement: open tender, request for quotations, single source, special procedure.

In May 2023, the Company introduced an automated system for submission of applications (Procurement Monitoring of Kazakhtelecom JSC). The Company  launched a new type of procurement on the portal of the Information System of Electronic Procurement through e-shop, which facilitates procurement procedures. As part of the process of digitalisation, analytics on procurement activities from the procurement portal was integrated into Qlik Sense.

Kazakhtelecom strives to select suppliers whose activities comply with the Company’s requirements in the environmental protection, industrial safety and respect for human rights.

In 2024, Kazakhtelecom plans to improve the procurement management system and assess its suppliers according to ESG criteria. Among other things, we will develop the Supplier Code of Conduct taking into account ESG criteria.

Procurement results in 2023

1,570
suppliers
in 2023

Main types of goods/services:

  • telecommunication equipment;
  • maintenance of telecommunication equipment;
  • SOIM services and other types of telecommunication services.

Share of spending on  local suppliers

GRI 2-6, GRI 204-1

Kazakhtelecom attaches special importance to co-operation with  local suppliers, preferring to procure goods and services from them. In its activity, the Company follows the state policy aimed at development of  local content in the conditions of innovative development of the national economy.

To increase the share of  local suppliers in the Company’s procurement, a  local project office for import substitution is functioning on the basis of the Telecom Komplekt Directorate, aimed at working with the instructions of authorised state bodies on procurement and import substitution issues, as well as interaction with the Central Project Office of Samruk-Kazyna SWF JSC. In addition, annually the Fund’s Authorised Body for Procurement determines performance targets for increasing the share of  local goods, works and services in procurement.

 
99.46%
share of procurement from  local suppliers in 2023
KZT
92,57
billion
budget for procurement from  local suppliers in 2023

The category mechanism of procurement management introduced in the Samruk-Kazyna Fund and managed entities (including Kazakhtelecom) also provides point support for domestic producers.

Read more at zakup.sk.kz.

GRI 2-6, GRI 204-1
Expenditure on  local suppliers, 2022–2023

The geographical definition of “local” and the main place of Kazakhtelecoms operations implies the country of the Company’s presence - the Republic of Kazakhstan.

Key requirements for suppliers

Kazakhtelecom JSC’s requirements to suppliers are documented in the SWF Samruk-Kazyna JSC Procurement Procedure, as well as published on the portal of the Fund’s Electronic Procurement Information System.

Feedback from suppliers

The Company utilises various tools for supplier feedback, including: formal correspondence via paper/email letter; communication via the Company’s official Facebook page; a technical support service on the procurement portal; and a direct  line to collect complaints and petitions on procurement issues.

The Company holds annual offline/online conferences with current and potential suppliers. In 2023, we held 3 conferences with suppliers (1 offline, 2 online) attended by more than 100 suppliers. Kazakhtelecom systematises all proposals and recommendations received during such conferences for further improvement of the procurement system management. For example, the suppliers’ initiatives that were put forward at one of the conferences in 2022 became the basis for creation of a new separate unit within the Company’s procurement division to supervise off-take contracts, category procurement and service models.

Technical support of procurement portal:

Direct  line to collect complaints and petitions on procurement issues:


80
letters/requests/proposals
received in 2023 from potential and existing suppliers

The main issues related to:

  • participation in a tender;
  • pre-qualification (the process of assessing potential suppliers for compliance with qualification requirements for the goods, works, services to be procured).

The Company publishes its answers to these and other questions on the official Facebook page.