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Local contractors cry foul over Chinese dominance

Local construction companies have implored the government to prioritise them when awarding lucrative construction tenders instead of favouring foreign companies who sometimes fail to deliver.

The government has been parcelling out infrastructural development tenders to foreign companies especially Chinese contractors much to the chagrin of local companies.

But a body representing local professional construction companies, the Construction Industry Federation of Zimbabwe (CIFOZ) has opened up on the struggles contractors face in the country and said they should be at the forefront of any government programme.

CIFOZ, which turns 104 this year has in its structures – building constructors, mechanical, technical and civil engineers, electrical contractors, architects, quantity surveyors, suppliers of building materials and real estate agents.

CIFOZ chief executive officer, Martin Chingaira said it was high time the government awarded infrastructural development jobs to locals.

He argued that whatever job came through, foreigners must be in partnership with local contractors as they cannot be observers in their country.

“You must be aware that the infrastructure you are seeing in Zimbabwe was done by Zimbabweans and in economics, construction is a barometer of how an economy runs as contractors are the first people to start the economy and should be recognised in that manner and not as mere builders,” he said.

Chingaira added that the local construction industry was poorly funded as banks did not support them yet foreign companies had access to cheaper funding.

“Challenges with banks in Zimbabwe start with the capital threshold, which automatically tells you a story. No bank in Zimbabwe has a capital share of $300 million and that automatically incapacitates them to fund bigger projects.

“If we talk about civil engineering, we are talking about a minimum or an average price of $US1 700 per kilometre and if you talk about a 100-kilometre road what does that mean? Our banks don’t have that capacity to actually lend us money,” he said.

“If we want to take up Public Private Partnerships or BOT jobs, we don’t have a bank that can give us money for more than 10 to 15 or 25 years.

“The interest rates in banks in Zimbabwe are something that we can’t work while foreign companies come with their cheap funding which we cannot access as Zimbabweans because they require a sovereign guarantee and we cannot be issued with that from our government.”

To stamp its presence to government and other investors, CIFOZ has taken advantage of the upcoming Zimbabwe International Trade Fair to host a construction indaba.

“The construction indaba is going to start at April 23 and the main purpose is we need to be visible, we need to tell the nation, the stakeholders from government, bankers, private sector about us. We are trying to find out if is there something wrong with us. Maybe in our interaction the banking sector and investors can throw something towards our way for the reconstruction of our country,” said Mlungisi Mkhwananzi, chairman of CIFOZ in the southern region.

He added there was a need to come up affordable pricing models so that locals can afford to build.

“Cost is a big issue as we are inundated by individuals and organisations who ask how possible it is that a project for $50 000 ends up becoming $60 000. We have to ask why our cost per square metre of a building is more expensive than South Africa. What is different when the bricks come from here, stone and river sand is from here?” he asked.

The contractors said going forward a construction bill was necessary to regulate both construction and procurement industry.

“A construction bill exists everywhere in the world but not in Zimbabwe. You can’t go to South Africa and do whatever there so our protection is going to come from that legislation. We are not fighting for government work because we know we are going to be on the losing end in terms of the big corporates from China and all over the world but the construction bill is a start,” said Mkhwananzi.

On funding prospects, CIFOZ said pension funds must consider investing in the local construction industry.

“We are in discussion with pension funds such as NASSA and the National Railways of Zimbabwe pension fund. These have money but they are not borrowing to construction but if we had access to that money we could create an interesting structure.

“Local funding is available and will be cheaper than banks as they have some funding from these pension funds but they put a premium when they lend to us. This is why we are saying let’s go straight to the source and have a bankable partnership with our financial sector.”

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