Construction sector enamoured by finance minister’s directive on local procurement for public works
“This afternoon I issued an economy-wide Procurement Directive on the Reservation of procurement of goods, services and works to local suppliers in terms of Section 73 of the Public Procurement Act” said the Minister of Finance, Hon Calle Schlettwein on Thursday when talking about the government’s debt management strategy, and the need for local authorities and government ministries to use Namibian suppliers before anything else.
“The measure directs public entities to source specific categories of goods, services and works produced or manufactured locally and to the extent such goods, services and works are available locally, before procuring these from somewhere else,” the minister continued.
Reacting to this directive, the Construction Industries Federation of Namibia (CIF) on Friday welcomed the announcement, saying the construction sector remains in a very tight corner, emphasising that local contractors need to be preferred suppliers when it comes to public works.
The CIF’s Consulting General Manager, Bärbel Kircher, commented “to secure the survival of the construction industry and the necessary spillover effect to other sectors, and to maintain the Namibian construction capacity, the CIF consistently emphasises that Namibian companies need to be adequately safe-guarded and that measures are taken and programmes are implemented immediately, to protect the local industry.”
In this regard, the federation has engaged the government on several occasions over the past two years. “Part of the CIF’s discussion included that the government would issue and implement well-defined local procurement directives. So we are elated about this step taken – it is in the right direction. Our industry needs work to ensure their survival. So it is critical that tenders are advertised and that awards are done, so that contractors can commence with work immediately,” she stated.
The federation said it is keen that opportunities for further regulation under the New Procurement Act of 31 December 2015, will soon be realised, and that procurement preferences or similar initiatives such as set-asides will be regulated to protect the local construction sector.
Alluding to the financial difficulties of many of their member, the federation suggested that public procurement policies must be scrutinized, to avoid disqualification of local contractors based on financial requirements such as turnover or cash flow. “Alternatively, the projects needs to be reasonably sized so that our contractors not only meet the technical requirements but also the financial requirements. In current economic times, it is unacceptable that prequalification requirements are so high or tender specifications are of such a nature that it excludes local contractors,” according to Kirchner.
The federation reiterated that local contractors have sufficient capacity to develop the much-needed infrastructure and that local contractors should not by any means have to compete with foreign contractors under current circumstances. “It is also very important that stern measures be introduced to prevent tenderpreneurs, to prevent poor quality of work and uncompleted projects.”
“Industry protection and regulation can be achieved with the establishment of a Namibian Construction Council. Hence it is of extreme importance that a National Construction Council is established as soon as possible through an Act of Parliament. This would ensure that every business operating in the industry would be registered and graded according to the capacity of the company in relation to the size of the projects it can handle and be awarded contracts accordingly.”