LOCAL CONTRACTORS HIT BY ‘DEFAULTING’ PAYMENTS

Fri, 09 Feb 2018 09:18:20 +0000

By BENNIE MUNDANDO

INDIGENOUS construction companies in Zambia are on a downward spiral following the decision to halt procurement of new projects thereby pushing the plight of Zambian engineers into jeopardy, an engineer has noted. 

Green Lake Zambia proprietor Kumbukilani Phiri, an engineer trained in China, told the Daily Nation yesterday that as a result of the vacuum left by local companies, many engineers had been left without jobs to build their capacity as foreign companies had the tendency of coming into the country with their own engineers.

“The non-participation of Zambian companies in the industry is creating a vacuum as many Zambian engineers are being left with no jobs to build their capacity as most foreign companies have a tendency to bring their own engineers and skilled labour and only employ locals for mostly non-skilled jobs as helpers.

If this trend continues, Zambia will continue depending on foreigners in key industries for many years to come,” Mr. Phiri said.

He observed that over the past two years, Government had been defaulting to pay contractors on their Interim Payment Certificates (IPCs), a development which had compounded the problem even further.

“For indigenous Zambian construction companies, the construction industry in Zambia has been declining. Last year President Lungu declared that the government should not procure anymore projects until all ongoing projects are completed.

“Over the past two years the government has defaulted in paying contractors on their interim payment certificates (IPCs). Some contractors IPCs have been outstanding for over two years instead of 28 days after certification as stipulated in most contracts,” he said.

He said high interest rates from financial lending institutions had made it almost impossible for local companies to borrow money to actualise their projects thereby leaving the sector to foreign companies which had the financial muscle and backing from their countries of origin.

“As the industry has been declining for Zambian companies, it has however been developing for foreign companies. Most big contracts are being financed through concession loans and the trend has been that the tenders are not advertised in Zambia to allow for Zambian companies to participate. The tenders are advertised in the lending country with mostly parastatals from the lending country taking part,” he said.