The construction industries Federation is right to warn that the government risks concentrating public tenders among parastatals, systematically excluding small and medium enterprises and emerging contractors from public work.
The federation’s chief executive, Bärbel Kirchner, made these remarks when responding to news that the government has handpicked the financially troubled Roads Construction Company (RCC) to oversee a N$140-million project to build basic sport facilities in all 14 regions.
“If projects are allocated through direct appointments, it may limit direct access to public work for small and medium enterprises and emerging contractors who rely on open tenders to grow and build capacity,” she said.
She could not have said it better. A pattern has emerged of using tender exemptions to award contracts to state-owned enterprises and their handpicked private partners.
The N$140 million RCC contract is one example. Instead of a public tender, the government directed the work to the RCC, which has a history of channelling work to politically connected entities.
Exemptions might be seen as a quick fix to bypass the procurement system to meet Swapo’s election promises. However, this is prone to corruption and cronyism.
It also suffocates small businesses which legitimately want to vie for businesses.
Last year, the Namibia Ports Authority (Namport) advertised a N$3 billion tender for a Lüderitz Bay oil and gas supply base. Guinas Investments, owned by Swapo, wanted to be part of the project.
Namport rejected the interest, citing the need for an open competitive process.
Two days after advertising the tender publicly, Namport cancelled it. It emerged earlier this month that the Namibia Industrial Development Agency and their proposed partners from Ghana are now leading the race for that port deal.
For years, experts have warned that exemptions are often used to justify “emergencies” as a pretext for favouritism. It will likely continue sidelining the private sector from participating in public works.
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