The Construction Industry Federation (CIF) president, Nico Badenhorst, criticised the new Procurement Bill for failing to have regulation that protects local contractors.
Badenhorst was addressing the finance minister at a Standard Bank business breakfast held in the capital recently.
“Currently, one concern for us is, we have recently seen the new Procurement Act being implemented in outgoing tenders. As seen from the statistics, the construction industry will still be in the negative this year. Our concern regarding the new Procurement Act, especially with town councils is, in the tenders there is no regulation protecting local contractors,” he said.
The CIF president stressed that the current situation is that those offering the lowest prices have been scooping the latest tenders regardless of whether they have the requisite skills and experience or not.
“With the tenders that have come out based on the Procurement Act, we saw that if a contractor complies to all mandates and documents and you have the lowest price you will be awarded the contract because there was no preference given to technical know-how or experience from previous contracts. Basically, it’s solely based on price,” explained Badenhorst.
This puts government resources and quality of projects at risk, he cautioned.
“There again, the quality of investment will always be a problem because it might be that an unexperienced contractor will be appointed and funding resources from the government or councils will be wasted.”
“Our plea is that, when new contacts and tenders are coming up now we look at the regulation regarding the new Procurement Act so that the local industry can be protected,” he said.
Last year the construction industry declined and according to Badenhorst since 2016 to 2017 the decrease was about plus or minus 42%.
This was compounded by budget cuts on capital projects and outstanding invoices which government had owed many companies for services rendered.
“We appreciate the efforts made by the minister on outstanding payments. If it was not for the ministry’s intervention in sourcing for funding, there would have been a lot more casualties in our industry,” said Badenhorst.
Meanwhile, the Standard Bank economic outlook spells bad news for the construction sector which is expected to continue to decline.
In the meantime, Schlettwein has introduced a raft of measures to create normalcy in the economy and for this sick sector, an infrastructure fund will be launched this year via the Development Bank of Namibia to fund current and future priority economic infrastructure.