Geingob urged to cancel construction projects

The Construction Industries Federation (CIF) and the Metal and Allied Namibian Workers Union (Manwu) have urged Pres. Hage Geingob to cancel and re-advertise all projects currently excluding local contractors.

Local contractors are mainly excluded due to steep financial prequalification or qualification requirements.

These projects are not in the interest of the Namibian construction sector, as they undermine the optimal performance of the industry, the CIF and Manwu maintain.

Projects referred to include those by NamPower, NamWater, the Roads Authority (RA), the ministry of education, arts and culture, as well as the Namibia Financial Institutions Supervisory Authority (Namfisa).

“All the developments are extremely disappointing and undermine Namibia’s own contractors,” Bärbel Kirchner, the chief executive officer of the CIF, said in a statement.

She was joined by Justina Jones, secretary-general of Manwu, who said: “Our government and all state organs are the biggest employers for the construction industry; and it must be the state’s priority to ensure that local contractors, especially those with equal capacity as foreigner contractors, are exempted from tender requirements and are awarded the mega projects.”



‘No understanding’



Namibian contractors and professionals in the construction sector are in “desperate need for work”, Kirchner said.

“There seems to be no understanding, and no deliberate attempt to optimally support our local industry. This not only includes majority Namibian-owned SMEs, but also majority Namibian-owned mid-size contractors and majority Namibian-owned large size contractors.

“On the contrary, it appears that our own contractors, in particular the large-size contractors are deliberately undermined. This can bring about the insolvency and eventually bankruptcy of our established and well capacitated contractors,” she added.

Jones said many of Namibia’s large-size contractors have invested in plants and machinery and have financial obligations which demand a related turnover.

“If indeed these businesses were to close down, Namibia will lose the backbone of its building and construction sector; and Namibia will become increasingly dependent on foreign contractors.

“Once the latter have succeeded in fully capturing the Namibian market, it is very likely that there will be an eventual change to their business models and their costing and pricing strategy,” Jones warned.



‘Precarious employment'



The private sector is currently leading by example to ensure that the big local contractors are awarded jobs, Jones pointed out.

“However, it is critical that government creates a safe environment for its citizens. Foreign contractors must be sourced as subcontractors by our local contractors, and it should not be the other way around.

“Foreigner contractors are diminishing the construction sector, thus creating precarious employment in the sector. It becomes an industry with no decent jobs and no social protection,” she stressed.

Jones also warned the public not to be misled about the issue of middle agents or tenderpreneurs.

“We all know that tenderpreneurs very likely are a project of corrupt officials who are in bed with foreigner contractors. Tenderpreneurs are the ones who are messing up and it seems there is no one who is ready to hold them accountable,” she said.



Unfinished projects



Both Manwu and the CIF have been calling for the establishment of the National Construction Council (NCC) so that the sector is properly regulated.

Jones and Kirchner referred to the many uncompleted projects procured by government, saying poor workmanship and non-completion was essentially the result of the limited knowledge of and a poor selection of contractors.

The presence of the proposed NCC could address these issues.

“It is annoying that these [unfinished] developments are then used by many as justification for the involvement of foreign contractors. This undermines our own industry and creates a perception that all Namibian contractors are not able to meet requirements.

“We believe that this perception is sadly as a result of what can be regarded as inaction by our government to effectively address the matter,” Kirchner said.

The CIF and Manwu believe that the exclusion of local contractors is not in the interest of maintaining and further developing the Namibian construction sector, and that it is also not aligned with Namibia’s efforts to address poverty and reduced unemployment.

Additionally, they maintain that the involvement of foreign contractors undermine Namibia's endeavours to maximise revenue collection and hindered the circulation of funds within the Namibian economy.



Criteria



Following the requested cancellations of projects, the financial and technical criteria must be reviewed for each of the respective projects. The projects should then be re-advertised, into smaller lots and with more with realistic technical criteria, the CIF and Manwu said.

In addition to its procurement implications, this issue also raised questions about the process of seeking and negotiating grants and loans, potentially intersecting with Namibia's foreign policy and its various bilateral and multilateral relationships.

The CIF and Manwu therefore appealed to Geingob to address the matter with the respective government entities and stakeholders involved.

CIF and Manwu urged that if finances are sought externally, these loans or grants are negotiated on terms that support the development and further capacitation of Namibian businesses.

“If that is not the case, any related development is not sustainable,” they said.

“We believe that government has a major role to play in creating sustainable businesses, in particular in our construction sector,” according to Jones.

“Government has a role to play in creating decent work in the construction sector, in as much as creating the appropriate policy environment that would allow for consistency, continuity and stability of work in our sector,” she added.



Wide appeal



While the CIF’s and Manwu’s main appeal was to Geingob, they also sent letters to the following ministers: Iipumbu Shiimi (finance and public enterprises), John Mutorwa (works and transport), Tom Alweendo (mines and energy), Anna Nghipondoka (education, arts and culture), as well as Prime Minister Saara Kuugongelwa-Amadhila.

Also on the CIF’s and Manwu’s mailing list were other cabinet ministers and executive directors of the respective line ministries and chief executive officers of state-owned enterprises.

They also copied in the local and regional representatives of the Kreditanstalt für Wiederaufbau (KfW) and the African Development Bank (AfdB), respectively, as well as Akinwumi Adesina, the president of the AfDB, and Stefan Wintels, the chief executive officer of the KfW, as financiers of some of the projects.