CIF challenges construction capacity claims…calls for fair procurement to boost confidence in local businesses

The Construction Industries Federation of Namibia (CIF) has reiterated that Namibia has established contractors with substantial technical expertise, experience and resources. The federation emphasised yesterday that the domestic construction sector includes both emerging businesses requiring development support and established contractors with extensive project experience, and that the circumstances and capabilities of all contractors must be assessed separately.

The CIF’s sentiment comes in the wake of Minister of Works and Transport Veikko Nekundi’s reported assessment that only three or four local contractors have the capacity to participate in major construction projects, and that even their capacity remains limited.

In a statement issued yesterday, the CIF clarified that it considers the Minister’s assessment “a damaging generalisation” that fails to distinguish between construction competence and the conditions imposed through procurement. The federation therefore called on the Minister to substantiate his assessment and correct the impression created.

“Financial qualification must also be distinguished from technical competence. Historical turnover thresholds, guarantees and financing requirements can exclude businesses that possess the expertise to execute the work. After years of recession, reduced turnover reflected limited project opportunities rather than an inability to deliver. Using those depressed figures restricted access to subsequent projects and perpetuated the disadvantage,” the CIF stated.

The federation added that technical qualification criteria themselves also require scrutiny. “Requirements to demonstrate previous annual work volumes beyond anything historically commissioned in Namibia can exclude experienced contractors without establishing that they cannot undertake the proposed project,” the CIF added.

The federation continued that, for example, in 2023, it raised concerns about the Karibib–Usakos road rehabilitation tender, challenging both the financial requirements and the technical criteria, which involved substantial work volumes, including 60 000 cubic metres of stabilised recycled subbase.

“Similarly, demanding prior experience with methods or materials not previously specified for comparable Namibian public road projects can create an exclusionary barrier. Requirements should be justified by the work involved and assessed against relevant experience, transferable expertise and the ability to deploy the necessary technology,” the federation stated.

“A financial threshold, an unrealistic historical volume requirement, or a narrowly prescribed experience condition must not replace a proper assessment of a contractor’s ability to deliver. Minister Nekundi must recognise these distinctions before making broad public statements about local capacity,” said Bärbel Kirchner, chief executive officer of the CIF.

The CIF also said that, beyond qualification requirements, capable contractors may decide not to bid for commercial reasons. “Preparing major tenders is costly, and businesses must weigh that expenditure against their prospects of securing work and receiving payment on time,” the federation added.

“Coming from the line Minister, broad capacity claims undermine confidence in Namibian businesses, risk prejudicing future opportunities, and may even justify continued reliance on foreign contractors. Government must recognise existing competence and address the barriers that restrict its use. The industry deserves a fair assessment, a correction, and an apology,” concludes Kirchner.

The CIF’s statement added that extremely delayed payments, especially by government clients, increase working-capital pressure and borrowing costs while wages and suppliers still have to be paid. “These risks can discourage participation even where contractors meet the requirements”, the CIF stated.

The federation emphasised that the lowest tender price can compound the problem.

“Large international contractors may benefit from economies of scale, possible cross-subsidisation if needed, wider purchasing networks, and cheaper or state-supported finance. These advantages can make their prices more competitive without demonstrating superior technical competence,” the CIF added, noting that the lowest price is not automatically the best value.

“Procurement must assess credible pricing, quality, delivery capability and the longer-term consequences for Namibia’s construction capacity and economy”, the CIF stated.

The CIF has also explicitly ddressed “tenderpreneurism” and fronting. “A nominal Namibian partner with little role in executing the work is not equivalent to a genuine joint venture with defined responsibilities, meaningful participation and measurable skills transfer. Such arrangements must not be used to characterise legitimate Namibian contractors”, the CIF added.

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