Property & Infrastructure

New law for construction sector next year

PHILLIMON MHLANGA

Government has finalised crafting the Construction Bill which seeks to regulate contractors in the country, protect the public from substandard products and workmanship as well as control the influx of foreign players into Zimbabwe, a Cabinet Minister has revealed.

The new law, which has been on the cards for 15 years, is expected to be in place by February next year, Housing and Social Amenities minister, Daniel Garwe has said.

The law also has provisions for the establishment of an industry regulator, to be called Construction Industry Council, which is expected to monitor and register companies carrying out construction work in Zimbabwe.

Negotiations to have a legal framework between the construction industry and government began in 2005, but the close to two decades of negotiations yielded no positive results.

Local contractors have been expressing concern over the rate foreigners, especially Chinese construction companies, were being given jobs of major construction projects in Zimbabwe at their expense.

Garwe, who was appointed to head the portfolio 12 months ago, disclosed that the draft Bill has now been sent to the Ministry of Justice for their perusal.

Garwe, a former president of the Zimbabwe Building Contractors Association (ZBCA), said the Bill would address the local contractors’ plight.

“I spent more than 30 years fighting for tenders as a member of ZBCA, now I am a leader. I want to see a better construction industry, which is regarded as a key enabler in the development of our country. The sector needs to be protected,” Garwe said.

He added: “The (Construction Industry) Bill is in advanced stage. In January or February next year, we should have the Bill. Contractors had forgotten to say they want to be protected. We added that now and we have agreed in principle.

We have now sent it to the Ministry of Justice for further perusal.”

Garwe said local contractors need to be regulated like other professions in the built industry such as architects, quantity surveyors and engineers, who have Acts of Parliaments to guide their operations.

He expects a boom in the next coming years hence the need to protect the sector. “We are expecting a boom from January 2020. This means Tigers will come, but we have confidence in local contractors, and we need to protect them,” Garwe said.

Harare Metropolitan Provincial Affairs Minister, Oliver Chidawu, who founded and managed Kuchi Construction Company said the proposed law has taken “too long” to be enacted.

“Other countries in the region such as South Africa, Botswana, Zambia and Malawi, which took ZBCA as a case study on how it managed to organise itself as indigenous contractors, have already enacted legislation to govern construction industry. But here in Zimbabwe it’s still floodgates. We are not protected.

So, if we don’t protect ourselves, we will end up not knowing how to build our own homes,” Chidawu said.

Minister of Local Government and Public Works, July Moyo said government was convinced that local contractors have the ability to build this country.

“The good thing is that we now have (Oliver) Chidawu and (Daniel) Garwe who were agitators for many years but are now rulers.

These will now help in pushing for legislation to govern and protect the construction industry in Zimbabwe,” Moyo said.

ZBCA president Christopher Mawere said government should give preference to local contractors as this would save the scarce foreign currency.

He said Zimbabwe’s construction industry was in a precarious position as operators battle to deal with productivity, profitability and sustainability challenges.

Industry players said there were low barriers to entry in the construction industry due to the absence of industry regulations, a situation which has created a saturated marketplace with heavy competition from foreigners.

Local construction companies have found themselves trapped between shrinking profit margins and stagnant production, meaning that companies in the sector are unable to generate the profit necessary to invest in critical technology.

As such, the few lucky operators realise razor thin profit margins.

The majority have been making perennial losses.

The lack of productivity is reflected in the bottom line, resulting in a dramatic reduction in workforce.

The construction industry used to employ more than 50 000 people at its peak in the mid90s but, the figure has plummeted to less than 10 000.

The industry has been grappling with challenges that include an acute liquidity crunch, high cost of doing business, high borrowing costs and short-term funding on the local market which is too expensive for working capital and capitalisation.

Government has lined up a number of infrastructure development projects which have the potential to unlock opportunities for the sector.

Moyo said government was creating smart cities across the country.

The administration has also embarked on urban renewal programme.

Government wants to build more than 200 000 houses by 2025.

The country is under increasing pressure to rehabilitate the dilapidated road network and infrastructure.

According to official data from the Ministry of Transport and Infrastructural Development, the country’s road network has outlived its lifespan by more than 40 years.

Currently, a limited number of the national road network is in usable condition.

Zimbabwe’s road network has been a key artery in the southern Africa region with traffic from South Africa passing through Zimbabwe on its way to Zambia, Malawi, the Democratic Republic of Congo and some parts of Mozambique.

About US$10bn is needed to rehabilitate the country’s entire road network.

Moyo said local contractors have to be innovative on no rely on tenders only.

“Form consortiums and bring proposals and how this can be funded.

That’s the modern way of doing business,” Moyo said.

 Garwe said in other jurisdictions, contractors have moved away from tenders urging locals to “create own businesses and then government will support”.

“A new thinking in government is that contractors should come up with models such as build, operate and transfer, refurbish, operate and transfer.

It’s a massive business to just refurbish, you operate and transfer after recouping your money invested,” Garwe said.

“Contractors need to be innovative and create partnerships. Don’t wake up every Thursday looking for a newspaper looking for tenders.

Be there in the planning process instead.”

Related Articles

Leave a Reply

Back to top button
Close