Contractors’ urgent appeal – establish Construction Council, get rid of tenderpreneurs!
Recent media reports of abandoned government building projects have prompted the Construction Industries Federation (CIF) of Namibia to restate the urgency with which it believes the industry must be regulated.
The federation’s president, Nico Badenhorst, clarified the issue: “If we want to improve the quality of construction work, our industry must be regulated. Currently, anyone can operate a business in this sector without any qualification and experience, and anyone, without any sort of building and construction capacity, can bid for government tenders.”
CIF General Manager, Bärbel Kirchner reminded stakeholders that the drive to have the construction industry regulated started already in 2006 but to date without any success. Regulating the industry will ensure “that every contractor operating in the construction sector would be vetted and registered with the council. Registered businesses then would be categorised based on criteria determined by the council, for example technical and financial capacity. This would ensure that the size of the contractor would be aligned with the size of project, which not only will increase the probability of quality workmanship but also the effective completion of projects.”
Ms Kirchner made it clear that the advantages of a regulated industry have been explained on many occasions to senior lawmakers.
After the first tentative attempts in 2006 to raise the issue of regulation, it took until 2010 before a relevant bill was tabled in parliament. This was however rejected for political reasons since regulation was interpreted as a means to protect the industry from fair competition.
The role of the agent of regulation, the envisaged Construction Council, had in the meantime also been modified. In subsequent discussions between stakeholders, one of the major roles of the proposed construction council is viewed as the effective co-ordination of technical training and capacity building in the industry, so that SME’s and emerging contractors can also participate in large projects.
“The regulation of the construction sector through a construction council is so important that the government had committed itself at the Investment Summit, organised by the High Level Panel of the Economy in 2019, that the National Construction Council would be legislated by 31 March 2020,” stated Kirchner adding that the bill was submitted to Cabinet only in March this year.
According to Kirchner, a Construction Council will also address the issue of so-called tenderpreneurs or connected persons who act as exploitative brokers of government building projects.
“These middlepersons rarely add value as most of the time they do not have a construction business or capacity per se. Instead, once the contract has been awarded, it is often sold to other contractors, many of which are foreign contractors. This limits the value a building or civil project can add to the local economy during the construction phase.”
On the urgent need for a regulator, Badenhorst continued: “The very first step to revive our sector is to have a construction council in place. It will practically address all problems and obstacles we are currently facing in our sector – displacement of Namibian-owned contractors, exclusion of contractors due to unrealistically high financial criteria on major – often loan or donor-funded – projects as well as the question of tenderpreneurs. Over the years our industry has suffered due to lack of regulation. Government development budgets could have been used to optimally engage the local industry. If we do not act now, soon all local capacity will be lost.”