Contractors Struggle With Growing Sector

NAMIBIA’S construction industry is expanding at 9% annually, opening the sluice gates for bogus as well as foreign contractors.

According to the Construction Industry Federation (CIF) information sharing meeting held at Swakopmund on Friday, this growth was due to the aggressive drive in public spending on large scale projects to speed up infrastructure development and public services.

The federation has over 400 members, of which 194 are SMEs.

CIF general manager Baumlrbel Kirchner said Namibia wants to position itself as a national and regional economic hub, hence the development of infrastructural projects at harbours, roads, railways and airports.

“And then there is the demand for public services, housing and business infrastructure. The construction industry can be seen as a catalyst to economic development,” Kirchner said.

But there’s a downside, according to Horst Fritze, former CIF executive member and a major player in the construction industry at the coast. He says the industry is not ready for this rapid growth, especially in the context of the impact it has on available skilled labour and quality services and products.

“There is suddenly a very high demand for workers, products and services which is very hard for the local industry to keep up with. In fact, the industry is not ready,” Fritze told The Namibian.

Speaking at the event, CIF president Karl-Heinz Schulz said Namibian companies have been disaantaged in the past due to too many tenders going to foreign companies.

“This has been partially addressed by government with public procurement now reflecting a greater involvement of local companies,” he said.

Arrangements now are that SMEs are entitled to be awarded smaller projects worth up to N$20 million wholly-owned Namibian companies are assured of projects between N$20 million and N$60 million while foreign entities working with Namibian shareholders may tender for large-scale projects, exceeding N$60 million.

According to Schulz the establishment of a national construction council is necessary to ensure better regulation of the sector, and that the capacities of companies are matched with the size of projects.

“This will prevent companies from getting into financial difficulties or failing to deliver, and it will also help us to address the question of ‘tenderpreneurism’ more effectively the question of foreign involvement and the need to develop local skills and capacities,” he said.

To legalise the functionality of such a council and its regulation of the industry, a Public Procurement Act, which will ensure that government entities operate on the same principles, and that state-owned enterprises also fall under the same umbrella, is in the pipeline.

“Uniformity in public procurement by all authorities can contribute to reducing loopholes that exist currently. Smaller public expenditure should be exempt from tender board scrutiny. We also need to see a greater disclosure of interests – not only of members and alternate members of the tender board, but also by civil servants that are involved in public procurement in all government authorities,” Schulz said. “We also need to see that there are consequences for any corrupt practices in our industry.”

Source : The Namibian