(3 minutes read)
The Construction Industries Federation of Namibia (CIF) demands 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 initiative 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.
The Construction Industries Federation of Namibia (CIF) demands 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 initiative 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.
It was tough for local Namibian contractors to meet the turnover and cash flow requirements laid down by AfDB, despite having the right technical skills. Moreover, the requirements were not necessarily project-specific. The Namibian industry was indeed very disappointed as this would have been an opportunity to partially revive the local construction sector, stated CIF Chief Executive Officer Bärbel Kirchner.
Representatives from the AfDB were recently in Namibia to prepare for the prospective public tender. 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 new railway line project will be divided into smaller lots and then would allow the majority of Namibian-owned contractors to meet the financial prequalification requirements.
The ability of foreign contractors to access cheaper finance makes it difficult for local companies to compete on price. Irrespective of price, the appointment of foreign contractors still has macroeconomic implications as well as critical social and political implications, considering the current country-wide unemployment, poverty, and inequality in the country.
Read Also:
https://trendsnafrica.com/namibias-debt-to-gdp-ratio-rises-above-the-sadc-benchmark/
https://trendsnafrica.com/namibia-to-develop-green-industrial-economic-zone/
https://trendsnafrica.com/namibia-demands-more-csr-investment-from-miners/
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.
