The Construction Industries Federation of Namibia (CIF) has lobbied the African Development Bank (AfDB) for the inclusion of local contractors in the upgrade of the railway line between Kranzberg and Tsumeb.
The CIF’s push comes after Namibian contractors were allegedly overlooked in the 2018 project to upgrade the railway line between Walvis Bay and Karibib, which was financed by the AfDB and awarded to China Gezhouba Group Corporation.
Representatives of the AfDB were in Namibia to prepare for the prospective public tender.
“It was not possible for local Namibian contractors to meet the turnover and cash flow requirements, despite having the right technical skills. Also, the requirements were not necessarily project-specific. The industry was indeed very disappointed as it would have been an opportunity to partially revive the construction sector. Currently, the industry finds itself very much in the same position as in 2018,” CIF Chief Executive Officer Bärbel Kirchner said.
She said it was critical that local majority Namibian-owned businesses get the maximum share of the increasingly less available opportunities but also that appropriate opportunities are created that will enhance the government’s revenue base.
“It is important that tender requirements are such that they can meet both the AfDB policy and legal requirements as well as that they are also aligned with the reality of the Namibian economy and construction sector. This could mean that the rehabilitation of railway line project between Kranzberg and Tsumeb will be divided into smaller lots. This would then allow majority Namibian-owned contractors to meet the financial prequalification requirements,” Kirchner said.
“Taking into consideration that the management of the project might become more demanding, the size of the lots should at least be small enough that two majority Namibian-owned contractors can tender together as a local joint venture.”
She said the ability of foreign contractors to access cheaper finance makes it difficult for local companies to compete on price. However, Kirchner notes that irrespective of price, the appointment of foreign contractors still has macro-economic implications as well as critical social and political implications, considering the current country-wide unemployment, poverty and inequality in the country.
“It needs to be borne in mind that the youth unemployment in Namibia is exceptionally high – above 40% – which can leave the greater part of Namibia’s people completely vulnerable. This needs to be persistently and adequately addressed. It is critically important that every opportunity is sought to create employment and fair jobs. Construction is one of the sectors that allow for swift engagement with immediate impact,” the CIF CEO said.
According to CIF data, the country’s construction sector has gone through recessions since 2016, which has led to many closures and bankruptcies of construction businesses, reducing its contribution to GDP from 7.2% in 2015 to 2% currently.
