The Namibia Local Businesses Association (Naloba) has called on works and transport minister Veikko Nekundi to withdraw his announcement that foreign contractors working on Namibia’s railway projects must allocate at least 10% of their contract value to Namibian-registered companies or suppliers.
Nekundi was recently quoted in the Namibian Sun as saying that bidding and contract documentation for the railway upgrade requires contractors to allocate a minimum of 10% of the total contract value to Namibian companies or suppliers.
Naloba vice president Peter Amadhila questions the adequacy of the threshold, arguing that Namibian enterprises should receive a substantially larger share of major infrastructure projects.
“What is 10%? The jonourable minister must be joking,” Naloba says.
The association argues that Namibia had already seen instances where foreign participation in the country’s natural-resource and economic sectors resulted in relatively limited local participation and says this approach should not be repeated in major infrastructure projects.
According to Amadhila, the minimum workscope threshold for Namibian enterprises should be 40%.
“These projects are Namibian workscope and should benefit Namibian enterprises, thereby creating value for our nation,” he says.
Amadhila further proposes that major projects should, where appropriate, be awarded to Namibian enterprises, which would then be allowed to identify and appoint international subcontractors or technical partners where specialised expertise is required.
He says project funds should flow through the Namibian enterprises, which would in turn pay their appointed international subcontractors.
“No wonder many of our enterprises remain small and medium enterprises for a lifetime,” he says.
He argues that local businesses need opportunities to accumulate experience, capital and capacity if they are to grow into larger enterprises.
Amadhila also criticises what he describes as insufficient consultation with local businesses before the government announces local-participation thresholds.
“Our leaders should always consult relevant stakeholders, especially organisations such as the Namibia Local Businesses Association, before sucking their thumbs and announcing such thresholds,” he says.
Nekundi told The Namibian on Thursday that the 10% allocation set for Namibian-registered companies in a minimum and that he is open to discussion on increasing it.
“The 10% is the minimum I have set. I am in the office to serve the interest of Namibians, therefore, if there is a call for an engagement, I am obliged,” Nekundi says.
