An Epukiro councillor, Vejama Kanguatjivi, said he was aggrieved by a massive project, worth about N$66 million, which was awarded to Chinese contractors.
The project, which commenced earlier this year, entails the renovation of a hostel for the Epukiro Junior Secondary School.
Kanguatjivi said the project is one of the biggest in his constituency and noted he was heartbroken when the tender was commissioned, as a number of Chinese contractors were already waiting to take up construction.
He made these remarks yesterday during a Construction Industries Federation of Namibia (CIF) presentation to members of Parliament on the state of the local construction sector and proposed solutions.
“We had a fight with these contractors for about six months before reaching an agreement, as they paid employees lower wages at first,” he stated.
Bärbel Kirchner, general manager of CIF said about 36 respondents from a survey of the construction sector said should there be no income in the near future, they would have to downsize their business to a minimum (58.33%), keep their business dormant (11.11%), or close down their business altogether (11.11%).
Others would try and endeavour to keep business going with minimal staff and if circumstances demand, become dormant or close down.
“The businesses in the construction sector have already struggled to survive since 2016. Many businesses in the sector have already closed due to the recessionary environment. The majority of employers in the sector have no reserves left to continue operating. Any previous profits have already been spent to keep operations going. In addition, personal finance, loans, and overdrafts were used, with the hope that demand for construction and building work would pick up,” explained Kirchner.
She emphasised that the establishment of the envisaged construction council is to promote and develop the construction industry and to protect the public against unscrupulous contractors, among others.
According to Kirchner, there is also a need for procurement preferences for local contractors.
“Allow local contractors to work on a level playing field when competing with foreign contractors. Allow small contractors to work on a level playing field with large size contractors of any origin and also take into account criteria such as contract size, location, material sourcing, ownership, youth, women, previously disadvantaged persons, experience and access to finance,” she said.
Furthermore, Kirchner said some of the large projects financed through the African Development Bank (AFDB) require bid bonds in excess of N$4 million, which mostly restrict local contractors from taking part.
“This is a major restriction for local companies and only appeals to foreign firms that often employ their own citizens. By exempting the demand irrevocable or bank guarantees on these projects, more local firms can participate in some of the projects,” said Kirchner.
She continued that there was urgency in the establishment of a Namibian planning and construction council because of the exclusion of local contractors.
According to Kirchner, small and medium enterprises (SMEs) are excluded from projects, as they are competing with bigger contractors and bigger foreign contractors.