The Confederation of Zimbabwe Industries (CZI) says the government should put in place affirmative action measures to ensure indigenous-owned construction companies benefit from tenders.
According to a report submitted to the Parliamentary Portfolio Committee on Budget and Finance last month, CZI said the majority of local contractors were inadequately equipped to effectively compete with established traditional and foreign contractors.
“Major projects have been awarded to foreign companies,” reads part of the report.
“The local industry is competing with foreign industries that have access to finance, while the available finance in Zimbabwe is charged high interest rates of up to 15%.
“An influx of foreign firms which are now highly active within the industry, some of which have been legally localised, poses a great threat to the well-being of indigenous contractors who lack access to cheap finance and materials for recapitalisation and project execution.
“Some banks in the country have turned to become developers of land and bridges which is negatively impacting on the industry.”
The report said the government should put a limit on available tenders.
“Poor performance and disappointments from the local industry arise mainly from the obsolete and antiquated machinery the companies possess.
“Another way of moving the industry forward is subcontracting the local industry with foreign companies in conducting construction projects,” the report said.
“The foreign company will be doing the major tasks while the local company does the minor tasks, which it can handle”.
The industry body said there was need for the government to focus on completing unfinished projects.
“If left to deteriorate, these projects will become too costly to renovate, eg in the case of Equatorial Guinea where they ignored their infrastructure for years and by the time they wanted to renovate it, the cost of renovating was much higher that building new projects,” CZI said.