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Foreign firms dominate in construction

The recommendation is part of measures the sector wants government to institute to grow the industry, which is on the increase since the use of multi-currencies in 2009.

According to a paper presented to government, the industry is of the view that locals are getting a raw deal as they are inadequately equipped to compete with foreign companies.

“This is as a consequence of hyperinflation experienced before the introduction of the multi-currency system when obsolete and depreciated capital equipment could not be replaced,” the industry said.

The sector said the prevailing high interest rates had made local bids uncompetitive compared to foreigners who have access to cheap finance, equipment and materials from their countries of origin.

There is no government incentives that exist for the construction industry to reduce the cost of importing capital equipment such as those offered to the agriculture and tourism sectors, the industry said. “On average, contractors are made to pay a US$250 non-refundable bid bond by SPB each time they go to tender, an exorbitant amount in the present economic environment,” the sector said.

The Procurement Regulations of 2002 granted a 10% preference to locally-based contractors over external ones.

It also said a 10% preference may be given to previously economically disadvantaged contractors.

“If it was being enforced we wouldn’t be worried about the foreigners,” said Daniel Garwe, immediate past president of Construction Industry Federation of Zimbabwe (Cifoz).

Cifoz said while government efforts towards empowerment were visible within other sectors of the economy such as agriculture, mining and tourism, none was evident in the construction industry.

“Indigenous contractors are competing against Chinese companies, some of whom are now legally local companies yet continue to enjoy the benefits of cheap finance, capital equipment and materials from their countries of origin,” it said.

“Chinese companies are particularly notorious for flouting local and international labour practices by, among other things, ill-treating, underpaying and overworking employees.”

The federation said Group 5 from South Africa was appointed main contractor for the construction of the Beitbridge-Bulawayo highway without going to tender while major mining firms were known to prefer South African companies to build their infrastructure.

“Preferential treatment of foreign firms and organised cartels largely by mining companies and other large corporate bodies is also contributing to loss of employment by local contractors and consultants,” Cifoz said.

George Mlilo, the permanent secretary in the Ministry of Public Works insisted they have been engaging locals except in cases where there were government to government agreements.

“We don’t have a situation where foreigners are competing with locals on all our programmes,” he said.

He said there were eight government to government programmes that locals cannot participate in and they include the Defence College being built by the Chinese.

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