Analysis: EMELDA MUSONDA
PARTICIPATION of local contractors in the execution of high-value infrastructure projects is among Government’s major priorities.This is because Government is cognisant of the role citizen participation plays in the development process of any country.
For this reason a policy was formulated to reserve 20 percent of all Government-funded high-value infrastructure projects for locals.
This is in line with the shareholding structure specified in the Citizens Economic Empowerment Act No 9 of 2006, whose overall goal is to contribute to sustainable economic development, by building capacity in Zambian-owned companies.
Needless to say, there is no country that has ever developed without the involvement of its citizens.
The rationale behind is that when citizens take part in high-value infrastructure projects, the revenue earned is reinvested into the economy.
This certainly plays a role in revamping the economy and subsequently uplifting living standards.
On the other hand, if contracts are awarded to foreigners, the money realised is externalised for the benefit of their countries.
However, it should be noted that for a developing country like ours, it is not possible to completely do away with foreign contractors because of the expertise, equipment and financial resources they bring along, mostly lacking among the locals.
This is where the 20 percent subcontracting policy comes in to strike a balance.
Given that the current scenario favours the foreigners who walk away with the lion’s share of 80 percent for every Government-funded road contract, one would have thought Zambians would be freely given the 20 percent due to them.
Unfortunately some foreign contractors have continued to greedily hold on to the 20 percent, which is supposed to be subcontracted to local firms, according to the subcontracting policy.
Recently President Lungu’s special assistant for project monitoring and implementation, Andrew Chellah, expressed displeasure that Avic International had allegedly given a Zambian subcontractor only K500,000 from the US$120 million that has so far been spent on building the Ndola International Airport.
Mr Chellah, who visited the airport construction site with National Council for Construction (NCC) executive director Matthew Ngulube, said about US$80 million of the contract sum of US$397 million has to trickle down to Zambians. He said foreign contractors should adhere to President Lungu’s directive for the 20 percent of the contract sum to be given to Zambians.
“We are dealing with a company that has been in Zambia for a long time and I believe they understand the laws and policies of this country.
“But I’m told they only have one subcontractor on site. It is quite disappointing.
“We decided to come here as a combined effort between State House and NCC. The President came here and launched this project and gave a directive and when we come to this site we find that the foreign contractor is not complying, it unsettles us,” Mr Chellah said after inspecting works on the runway and airport terminal.
In trying to exonerate himself, Avic airport project manager Wang Fei said US$10 million has been reserved for local contractors for future works on the airport whose construction is expected to be completed in the next two years.
Mr Fei said Avic has set aside US$6 million for Zambians to build a power substation, US$2 million for landscaping at the airport and US$1 million for drainage works.
If this is the whole amount Avic has set aside for local contractors from a project worth US$397 million, then it certainly falls short of the required 20 percent which translates to US$79.4 million.
During the tour of duty, Mr Chellah and Mr Ngulube also visited the US$449 million Kafulafuta Dam project in Mpongwe awarded to China National Complete Engineering Corporation (CMEC).
The situation was not any different. Mr Chellah could not hide his disappointment at the failure by the foreign contractor to engage local subcontractors.
CMEC business assistant Bruce Zhu claimed his company was giving K9.7 million worth of works on the building of the dam to Zambians.
Like in the case of Avic, this falls short of the required 20 percent.
The amounts both CMEC and Avic claim to have allocated to subcontractors are a paltry 2 percent of the total value of the projects, going by above figures.
This is certainly a raw deal not only for local contractors but the country as a whole.
The sad reality is that the cases above are just but the tip of the iceberg on how greedy contractors are robbing Zambians of their entitlements.
If foreign contractors greedily hold on to the 20 percent meant for local contractors, it means the latter will remain financially and technically incapacitated to make any meaningful contribution to development.
If these contractors are not willing to let go of the 20 percent then one wonders if they would willingly transfer skills to the locals.
This is a wake-up call for those monitoring implementation of projects to follow through and ensure contractors fulfil their promises.
For instance, Avic in particular has time and again publicly pronounced its commitment to implement the 20 percent subcontracting policy; it is however disappointing that on the ground the story is different. The company is not living up to its pronouncements.
Local contractors should also be proactive and find other ways of enhancing their skills and capacity to be able to compete fairly, instead of waiting on contractors because most of them, if not all, are here solely to make money.
Government should also expedite making the 20 percent subcontracting policy into law.
This will compel foreign contractors to give Zambians a fair stake in the projects.
But for now foreign contractors should listen to their consciences to give Zambians what is due to them. Twenty percent is certainly not too much to ask.
The author is Zambia Daily Mail editorials editor.
Analysis: EMELDA MUSONDA