Local contractors claim share on deals to foreign firms

Local construction firms through their umbrella association, AEBTP, are pushing for a 30 per cent share on public construction tenders given to foreign comp
Work on Mukungwa II hydro power project in Musanze District. The New Times / J. Mbanda.
Work on Mukungwa II hydro power project in Musanze District. The New Times / J. Mbanda.

Local construction firms through their umbrella association, AEBTP, are pushing for a 30 per cent share on public construction tenders given to foreign companies in a bid to improve their skills and competiveness.

The association says that government favours foreign firms while awarding tenders for mega construction projects, and that the move to subcontract local firms would help them (locals) to learn from the expertise of foreign companies.

“For other countries in the region it is a condition for foreign companies to sub contract a local firm to a reasonable percentage of the contract,” said Papias Zawadi Dedeki, the Vice president of the Association of Building and Public works Contractors (AEBTP).

He acknowledges that the sector lacks skill and the finances to implement big projects.

Construction is one of the fastest growing sectors in Rwanda and local firms are keen to tap on this boom. However challenges such as lack of equipment and materials as well as high interest rates makes local firms uncompetitive compared to foreign firms that have cheap capital and access to equipment from their countries of origin.

Local contractors are only limited to construction of roads, hospitals as well as water supply while mega infrastructure projects like hydro-electric power are given to foreign contractors, the association says.

Business Times has leant that government asked foreign contractors to seek joint ventures with local companies.

However, Dedek said foreign companies are yet to heed the call because there is no legal obligation to do so.  

“It is like we are begging on everything that we do because there is no law bucking us,” he said.

Government blames local firms for incompetent causes by low supply of professionals, leading to delays in the implementation of projects.

Dr Alexis Nzahabwanimana, the Minister of State in charge of Transport in the Ministry of Infrastructure, said in giving out tenders especially for big projects they look at experience and thus government is encouraging local firms to partner.

“They need to learn through partnering and not subcontracting, when subcontracted in road construction they do small things and always not part of the bigger project,” he said.

Government says it is the process of classifying contractors in three categories to know which contractor is best for what.

The classification will be based on financial capacity, experience and equipment available.

The classification is also expected to reduce complaints of breaching contracts.

“They (foreign contractors) have to be sure they also gain from local contractors,” the Minister said.

He urged that local contractors should focus on partnering with each other to strengthen their financial capacity if they are to compete for bigger projects.

“Some companies are given tenders and wait to implement after payment, we rather have ten strong companies than the 200 scattered firms,” he said.

 

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