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Construction sector enamoured by finance minister’s directive on local procurement for public works

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.”


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Following reverse listing, public can now acquire shareholding in Paratus Namibia


20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.