By Hilary Mare
THE over 450 member-strong Constructions Industries Federation of Namibia (CIF) has expressed grave concern about the directive of the Government to Namibia’s tender board on September 12 that no new tenders are to be awarded by until the 2016/2017 budget review.
Government will also not release any tenders until the reprioritisation of capital projects has been finalised, and the feasibility studies for capital projects are to be put on hold.
The directive will therefore affect all procurement by Government authorities and state-owned enterprises that would be funded by the Namibian central national budget.
“It is clear that Government is in a difficult position for treasury to have taken the step of instructing authorities to freeze new projects until the top priorities and the sources of financing have been established.
“This directive will have a profound impact on the Namibian construction sector. Unless Government acts swiftly, it can have serious consequences for businesses operating in the industry and for the economy at large. Many companies are being put at risk and many direct and indirect jobs are at stake,” Nico Badenhorst, acting president of the CIF said.
Addressing the critical issues further, Badenhorst lobbied for an unambiguous support given to Namibian contractors.
“It is extremely important that Government acutely focuses its efforts on supporting Namibian contractors. We trust Government will set clear goals and adopt the right strategies, to effectively cushion the impact of this drastic step on Namibian enterprises.
“At times like this, the Namibian family must come first. Any priority projects identified after the budget review must be given to Namibian companies,” he said.
Essentially the CIF intends to continue to engage Government to determine how best to resolve the issue of local contractor competing for job with foreign contractors.
“One thing is clear, much greater regulation of the industry in the interest of maintenance and further sustainable development of Namibian capacity, is vital. We need to have the required legislation to establish a council for the industry as soon as possible”.
“For effective cash flow management it is critical that Government commits itself to a realistic timeframe for paying all outstanding debt as well as the payment of future invoices of current projects. This will provide a degree of confidence which is very important for the stabilisation of our industry,” he added.
The CIF reiterated that all organisations and individuals involved in public procurement must focus on envisioning a very strong local Namibian building and construction industry. It is therefore critical that correct choices are taken by all involved with public procurement and that there will be a strong commitment towards supporting Namibian contractors.
Bärbel Kirchner, consulting general manager of the CIF says: “The announcement that Government has put all new tenders award on hold is quite a shock. However, from a different perspective, we should try and recognise the current financial situation as an opportunity to seriously reflect how Namibia will focus on the development of a sustainable local Namibian construction sector.
“We need to introduce some major changes for the lasting positive impact on our industry. It is not only important that Namibian contractors are able to survive under current circumstances. Instead, once we have steered through current difficult times, we would like to see our local industry thrive in the interest of Namibia, our population at large.”
The CIF informed that the federation will also conduct relevant research amongst its members as well as enterprises that are not members of the organisation. It will also liaise with authorities at all levels of Government to obtain relevant information regarding priorities, with a view of adopting the right strategies of supporting Namibian contractors.
The membership of the CIF ranges from companies that range from an annual turnover of over N$200 million to SMEs with an annual turnover of less than N$1 million.
Together they play a big role in Namibia’s economy, both in terms of employment but also in terms of their tax contribution. Over 50 percent of the membership is SMEs.
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