BENEDICT TEMBO, Lusaka
ON MONDAY, May 23, 2018 Avic International Project Engineering looked like Father Christmas as it gave out contracts to 16 local entrepreneurs.
AVIC has not generally enjoyed favourable perceptions among Zambians because of the nature of its investments in the country.
It has had the lion’s share of all major infrastructural projects with little to show about deepening its impact in Zambia in terms of capacity building and overall linkages in the economic value chain.
Therefore, AVIC’s gesture of subconstructing Zambian contractors is a good sign that the 20 percent subcontracting is getting the legitimacy.
The gesture, demonstrated publicly last week Monday, will encourage other foreign contractors to emulate AVIC and support the policy.
“That Avic has signed 16 subcontracts worth K52m is a very good development for the companies involved and also for the country at large. The onus is now on the subcontractors to rise to the occasion and deliver. The focus should firstly be on performance. Money will be paid anyway,” Association of Building and Civil Engineering Contractors (ABCEC) president Henry Ngulube said.
Mr Ngulube said if Avic is considering engaging any more subcontractors, it should give them more serious portions of work other than just drainages and culverts if there is going to be real capacity building.
“Apart from financial gain, subcontractors need to learn how to build a complete road after being involved in two or three subcontracts. So skills transfer is crucial for desired results,” Mr Ngulube said.
He commended AVIC for respecting the 20 percent subcontracting policy.
“Let those who have been resisting to learn from Avic and begin to subcontract. We are hoping those are real contracts and that the announcement has not merely been made to please the authorities. Therefore, a follow-up should be made to ensure that the subcontractors are really on the ground doing the works,” Mr Ngulube said.
Economist Chibamba Kanyama said Avic’s license to operate in Zambia has carried a heavy political risk and any investment that enjoys poor reputation for lack of corporate social investment has a short stay.
“The new offer by AVIC will not only have a positive reputational impact about it and the Zambian government but will also be doing what any business that invests outside its home country should do,” Mr Kanyama said.
He said AVIC should not only be here for the Zambian money. It should demonstrate long-term interest by capacitating local contractors.
“First, most local contractors do not have the international acceptable craftsmanship for the kind of quality we are looking for. It is only through skills and knowledge transfer that locals begin to acquire the award-winning skills. Second, local contractors are not technically and financially empowered to tender for large projects. They do not have technical capacity in terms of state-of-the-art equipment,” Mr Kanyama said.
He said as long as they do not participate in projects, even at lower levels, they will still not be able to acquire the sophisticated equipment for a long time.
“Third, as has been observed, local contractors employ more locals at managerial levels than Chinese companies do. This opportunity should translate into gainful employment of Zambians more than before,” Mr Kanyama said.
AVIC signed subcontracts worth K52 million with 16 Zambian subcontractors in line with government policy to reserve 20 percent of construction projects to Zambians.
The 16 local firms have been sub-contracted to build 164 kilometres township roads in Lusaka under the L400 project.
It is policy that a minimum of 20 percent of all Government-funded road contracts awarded by the Road Development Agency (RDA) and other government institutions must be executed by Zambian-owned companies.
Special assistant to the President for project implementation and monitoring Andrew Chellah said President Edgar Lungu wants the 20 percent policy to be strictly adhered to.
Mr Chellah said this recently during the signing ceremony between AVIC and the 16 local subcontractors.
“This [signing ceremony] is a game-changer in Zambia’s construction industry,” he said.
Mr Chellah commended AVIC for complying with the 20 percent policy aimed at building capacity among local contractors.
“The President has been concerned about the slow implementation of this policy,” he said.
Mr Chellah urged other main contractors to emulate AVIC’s adherence to the policy.
“This policy ensures that main and local contractors work together for the benefit of all Zambians,” he said.
RDA chief executive officer Elias Mwape said the agency has developed guidelines for the implementation of the policy.
Mr Mwape urged the subcontractors to adhere to the three objectives of the project – time, cost and quality.
AVIC senior consultant Lei Yingqi urged the subcontractors to adopt the Chinese culture of hard work.
“Working mentality must change,” Mr Lei said.
He said AVIC expects the sub-contractors to execute their duties diligently to avoid tarnishing the image of the international company and disappointing Zambians.
“AVIC is a top 500 international company with excellent performance and observes quality and high standards on its projects,” Mr Lei said.
He said the signing ceremony is in response to Government’s call for main contractors to reserve 20 percent of works for Zambians.
Mr Lei said under the L400 phase one, AVIC engaged 30 local contractors with a 1,000 labour force.
And speaking on behalf of the 16 subcontractors, Moses Lungu thanked Government for coming up with the new empowerment policy.