Government should support local contractors – CIF
The over 450 member-strong Constructions Industries Federation of Namibia (CIF) expressed great concern about the directive of the government to the tender board last week that no new tenders are to be awarded by government authorities until the 2016/2017 budget review and until the re-prioritisation of capital projects has been finalised, and that feasibility studies for capital projects are to be put on hold.
The directive apparently will affect all procurement by government authorities and state-owned enterprises that would be funded by the central national budget.
The CIF recognises that the government is facing budgetary constraints for a number of reasons. These are further aggravated by unforeseeable changes of macro-economic conditions and climatic conditions that increase the burden on government funds.
Mr Nico Badenhorst, acting president of the CIF said, “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 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,” he said. The CIF emphasised that there must be an unambiguous support given to local contractors.
Badenhorst said, “It is extremely important that government acutely focuses its efforts on supporting contractors. We trust government will set clear goals and adopt the right strategies, to effectively cushion the impact of this drastic step on 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 added.
Namibian contractors have ample capacity to develop the much needed infrastructure in Namibia. Local contractors should not have to continue to compete with foreign contractors under current circumstances.
The federation intends to continue to engage Government to determine how best to resolve that. The CIF efforts will also include pushing for the establishment of a Namibia Construction Council for the industry.
Badenhorst said, “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”.
In addition, it is critically important that the question of payment is being addressed. It is of immediate concern to local contractors operating in the construction sector. Overdue payments can have significant impact on the cash flow in the industry. The federation 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. Meanwhile, Bärbel Kirchner, consulting general manager of the CIF said: “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”.