Government to prioritise local contractors

GOVERNMENT has pledged to continue prioritising local financiers and contractors on national projects as part of measures to stimulate home-grown partnerships and sustainable domestic economic growth.

The mainstreaming of local contractors in huge capital projects such as the Beitbridge-Harare Road rehabilitation, which was done by local firms — Tensor, Fossil Constructing, Masimba Construction, Exodus, and Bitumen World — is a prime example.

Under the project, local contractors have done a combined 360km to date and the stretch has been opened to traffic while different sections of the road are at different stages of construction.

Previously, a foreign contractor that had been given the tender failed to kick-start the project. The Government now expects that 500km will be opened to traffic by the end of the year and complete the whole stretch next year.

Speaking during the CEOs Africa Roundtable in Victoria Falls last week, Transport and Infrastructure Development Deputy Minister, Cde Joshua Sacco, who was representing Minister Felix Mhona, said the role of infrastructure development in achieving Vision 2030 was vital as more than half the gains in economic growth in Africa are due to infrastructure development.

He said Zimbabwe was strategically located at the centre of Southern Africa and well positioned to be the investment hub for the region; giving access to world markets.

With transport infrastructure funding coming from a number of sources including the Government, Public Sector Investment Programmes (PSIP), and debt loans, Deputy Minister Sacco said a higher level of investment was required for infrastructure projects hence the need for African pension funds, life insurance and sovereign funds to come on board and invest in such.

“Good quality infrastructure is important not only for fast economic growth but to ensure inclusive growth and to benefit the majority of the people in the country,” he said.

“This contribution could be more significant in the future because infrastructure spending can stimulate broad macro-economic aggregates such as Gross Domestic Project or total employment.

“There is a need to strengthen private-public partnerships framework and this principally entails creating an enabling environment through which the private sector can thrive. Moreso, in order to Africanise our PPPs, local financiers, and contractors should be given priority on national projects.”

The minister said higher priority should be accorded to projects with more impact on the country in terms of economic growth and development, and insisted that the Government will demand value for money.

Deputy Minister Sacco said the allocation through PSIP has not been enough due to competing priorities but with inward-looking by the Government, a number of roads, border posts, and airports projects have been implemented amid calls for more PPPs to finance build-operate and transfer infrastructure projects.

Most of the projects done in the last five years have been funded by the Treasury. In the past, there have been problems with contractors who would charge 10 times the actual cost.

Besides the Harare-Beitbridge Highway, Deputy Minister Sacco said the Government has also done road projects in Manicaland, including in Copa, Jopa and Machongwe after Cyclone Idai damages, while Harare-Kanyemba Road and Kanyemba border were being done by Exodus Construction and Ncube Barrow Consortium. The 160km road from Mahuwe to Kanyemba is also being worked on.

The Rehabilitation of the Beitbridge-Bulawayo-Victoria Falls highway is also underway while construction is ongoing at Mbudzi Interchange in Harare, which is 51.5 percent complete, and the whole project is expected to be completed in the first quarter of 2024.

The projects are set to support the Government’s plan of enhancing trade logistics for the land-linked country where railway, air space, and road are key. Roads are being widened from seven metres wide to 12 meters in line with Sadc regulations and leveraging on a number of bi-lateral trade markets and membership to regional and international bodies.

Dep Minister Sacco said in the past, local investors were shying away from investing in infrastructure because tariffs were heavily regulated and not allowing return on investment.

He said the Government has since adopted a cost-reflective tariffs model and the user pays principle to ensure infrastructure development projects materialise.

“This is coming from our own resources as a country and from the national budget we need more funding for infrastructure development in order to stimulate economic growth and development,” said Sacco.

“Our challenge is insufficient investment in Africa where spending is about three percent of GDP against an average of six percent. So, as Africa we need to invest more in infrastructure and make most projects bankable through competitive interest rates,” he said. —@ncubeleon