HomeNewsZim contractors want a SA deal

Zim contractors want a SA deal

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Zimbabwe’s contractors are in talks with South Africa’s Master Builders to agree a joint venture on key investment projects in the country in a bid to cordon off international companies, for fear they could financial elbow them out of the local tenders and contracts market.
Construction Industry Federation of Zimbabwe (Cifoz)’s proposal is for local contracting companies to have 51% preference in all tenders and contracts, to wad off threats the local construction industry.
The association of South Africa’s construction companies, which views Zimbabwe’s pipeline construction projects as a strong business case, says it is prepared to take up the initiative, but would need more time to assess non-business risk.
The two started talking in May during a business networking meeting in Johannesburg and will be meeting again in Harare next month or in September.
The second meeting aims to give the Master Builders a chance to assess the projects and other investment opportunities on the ground as well as obtaining assurances from the host government, which will be represented by relevant ministries.
“The president (of Cifoz) advised the South African counterparts that there are investment opportunities in Zimbabwe and the construction industry is not waiting for the government to take the initiative hence they are seeking joint ventures,” Master Builders said in a report on the May meeting.”
“Cifoz as an organisation is willing to share ideas and work together with the South Africans before the international companies come in as they have taken over the projects in other countries such as Botswana. The president (of Cifoz) expressed that investors are welcome in Zimbabwe and the organisation is seeking to harmonise relationships and are keen to formulate joint ventures.”
“The delegates were assured that Zimbabwe has skilled workforce with a desire to produce, there are no disturbances such as strikes from the workforce in Zimbabwe.” The initiative is likely to culminate in a deal, based on a number of factors. The bilateral investment promotion and protection agreement (Bippa) that Zimbabwe signed with its largest trading and investment partner in Africa in November last year provides enough guarantees.
Cifoz yesterday revealed the local construction industry, currently operating below 15% of potential capacity, did not get even a single tender in the first half of the year, extending a depression of over 10 years.
At its peak, the industry contributed 8,5% to Gross Domestic Product (GDP), but this has sunk to below 2% due to the slump in contracts, now taking a toll on its stock of plant and equipment.
“We have no access to new work and affordable finance as the construction industry. We have been dormant for the past 10 years,” Daniel Garwe, Cifoz president, said. “If government has no funds you don’t expect the construction industry to be vibrant.”
He added that Cifoz was considering the joint venture initiative to build its capacity to win a sizeable proportion of tenders from Zimbabwe’s pipeline projects and foil government’s plan to contract international companies on grounds of capital.
The body has approached government with a proposal to have local contracting companies being given a 51% preference in all government tenders and contracts, that way nursing the industry back to business.
Government spending on infrastructure through the Public Sector Investment Fund and the Infrastructure Development Bank of Zimbabwe fell precipitously during this decade, forcing it to abandon a number of construction projects in 2008.
These include the road dualisations, airport expansions and power projects. Fiscal authorities’ failure to commit enough resources to the construction industry in the last 18 months has aggravated the situation.
Last week, government announced it had suspended all public investment projects to cut expenditure after donors defaulted in the pledges for budgetary support.
“The fiscal policy was a ritual as it did not mention anything for us,” Garwe said. “There is need for the country to rehabilitate national assets as a priority area. The country has no culture of maintenance and has water bodies which are highly deplorable.”
In 2008, government approved the awarding of a contract to dualise and upgrade Joshua Mqabuko Nkomo Expressway, formerly Airport Road, to Augur Investments, a Ukrainian Company believed to be incorporated in Estonia.

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