THE move by Finance Minister, Calle Schlettwein to halt the awarding of multi-million dollar tenders for rail and road projects to foreign companies at the expense of local contractors is a bold move that deserves credit.
For years, big construction projects taking place in Namibia have eluded local contractors, who end up playing minor supporting roles to the larger foreign contractors, mainly from China and South Africa. This has resulted in the stiffling of growth of local contractors and also in billions of dollars leaving the country.
A few weeks ago, Confidente revealed that local contractors had taken issue with government after pre-qualification requirements for major road and rail contracts, funded jointly by the African Development Bank (AfDB) and the Namibian government, technically excluded all Namibian contractors due to the prohibitive conditions.
The projects are for the construction of trunk road 9/1 from Windhoek to Hosea Kutako International Airport to dual-carriage freeway standards and for the upgrade of the railway line between Walvis Bay and Kranzberg railway. They required that bidders must have an average construction turnover of approximately N$631 million (US$42.5 million) calculated as total certified payments received for contracts in progress or completed within the last five years.
This requirement set by the AfDB automatically disqualified local contractors. This week minister Schlettwein revealed that he had intervened and asked the AfDB to reconsider the conditions as they placed Namibian companies at a disadvantage.
Although the AfDB, like any other funding agency, has its conditions for disbursing funds, it cannot ignore it’s responsibility to support capacity building in the member states it provides project financing to. It is our sincere belief that the AfDB will listen to the concerns raised by the Namibian contractors (through the government) and open the door for them to get involved.
As minister Schlettwein stated, the procurement conditions are not cast in stone and can be reviewed on a case by case basis.
Namibia has reputable construction companies, with all the necessary qualifications and resources to successfully handle large projects. It’s time that they are given a chance. The country cannot also continue to bleed billions of dollars at the hands of foreign contractors. We want to see Namibian taxpayers’ money being used to boost the local economy.
It is a fact that due to government’s reduced spending on capital projects, the local construction industry is on its knees, with several companies retrenching staff and facing closure.
In the same vein, it’s vital for government to closely scrutinise foreign funding for projects, especially from China, which also come with unfavourable conditions for Namibian contractors. Chinese loans often result in the engagement of mostly Chinese contractors and also the lion’s share of any procurement actitivity is from Chinese companies.
As Namibians, time has come for us to take seriously the matter of boosting our own local capacity to take on large projects. We cannot continue to rely on foreign contractors, nearly 30 years after independence. Industry must continue to lobby government to give priority to local firms.
By doing so, not only will we ensure the creation of the much-needed employment, but also create opportunity for Namibian resources to be invested locally thereby boosting economic growth.
Confidente. Lifting the Lid. Copyright © 2015