Editor's Comment

Audit of foreign contractors welcome

THERE is no country in the world that has ever developed without the involvement of its citizens in major economic activities.
Government is cognisant of this fact and has been working to ensure that Zambians take part in the running of the economy through various empowerment ventures.
As a deliberate measure to empower Zambian contractors, 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.
The rationale behind this 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.
Needless to say, if all contracts are awarded to foreigners, most of the money realised is externalised for the benefit of their countries, depriving the country of the much-needed revenue and subsequent development.
This is why Government came up with the 20 percent subcontracting policy to allow Zambians to benefit.
Though the policy in its current form favours foreign companies who walk away with the lion’s share of 80 percent for every Government-funded road contract, some of them still hold on to the 20 percent meant for local contractors.
A few days ago, President Lungu took some foreign contractors to task for failing to adhere to the 20 percent subcontracting policy.
One of those the President took a swipe at is Avic International.
It is disappointing that foreign contractors, despite being given more, they still want even the little reserved for locals.
This kind of greed should not be condoned in any slightest way.
The President should be commended for his resolute stance on the matter.
It should be noted that the behaviour by some contractors to defy the 20 percent subcontracting policy is detrimental to the country’s economic growth.
As a country that is in a hurry to develop, Zambia cannot afford to entertain such retrogressive tendencies.
While it is acknowledged that it is not possible to completely do away with foreign contractors because of their expertise, equipment and financial resources they bring along, they cannot be allowed to take everything.
All things being equal, the ratio should actually be in favour of local contractors.
It is just that local contractors have not yet built capacity to handle huge and highly technical projects.
The 20 percent is therefore aimed at building capacity, both financially and technically for local contractors.
It is hoped that with time and consistency in handling projects, Zambian contractors will develop enough technical and financial muscle to handle complicated projects.
However, if local contractors are not getting the opportunity to work on projects, they will continue lagging in capacity even 20 years from now. This will only make the country a perpetual dependent on foreign contractors at the expense of its own development.
If foreign contractors are disadvantaging local contractors on purpose, it is the duty of Zambians to ensure that their interests are safeguarded.
It is therefore commendable that Government has constituted a task force to review the extent to which foreign contractors engage local companies in projects.
According to Ministry of Housing and Infrastructure Development Permanent Secretary Charles Mushota, the task force comprises officials from the ministry’s department of public infrastructure, State House, Road Development Agency and National Council for Construction.
Mr Mushota said the task force will evaluate the scope of works local contractors are given in all the construction projects handled by foreigners.
This is the way to go. It is important to establish the scope of works locals are given to ascertain if there is skills transfer and capacity building.
It has been observed that for those foreign contractors that subcontract locals, they give them less technical jobs like constructing drainages.
Other foreign companies will subcontract locals but not at the full 20 percent.
There is also concern that some local contractors are too slow and they thus delay completion of the whole project. Others are also accused of having no capacity of doing even basic tasks.
These are matters that should also be seriously considered by the task force because surely Zambia does not want to be let down by its own people, does it?
All these issues must be taken into consideration if local contractors are to be empowered to contribute to the country’s development.

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