Zimbabwe’s construction industry is in a precarious position as the government continues to sideline local companies from major projects, awarding lucrative tenders to foreigners, industry players said yesterday.
They said most operators were now living on the margins, as they try to deal with underlying productivity, profitability, performance and sustainability issues. Contractors blamed the government for the marginalisation as the administration favours foreigners to undertake major projects that have been placed under Public Sector Investment Programme (PSIP).
Players in the construction sector have found themselves trapped between shrinking profit margins and stagnant production, meaning that companies in the sector are unable to invest in critical new technologies and processes.
As such, operating under such razor-thin profit margins means some will be forced to downsize operations while others have been forced to retrench or close.
“We are concerned that foreigners get preference on infrastructure development projects under PSIP projects. These are taxpayers’ money that is being used, but we are sidelined as local construction companies,” Construction Industry Federation of Zimbabwe senior vice president, Ephraim Gwindingwi said yesterday.
Industry players also said the influx of foreigners into the country is also caused by absence of a legal framework to regulate the industry.
It comes as the government is also under increased pressure to rehabilitate the country’s rehabilitated road network and infrastructure.
What is compounding the problem is that the government is not paying the few local contractors it engaged on time, the players said yesterday.
The players also said funding from local banks was a problem. “We don’t have funding which is cheap, meaning we remain stuck with our old equipment as new ones are very expensive,” a manager with a construction firm who requested not to be named told Business Times yesterday.
The government has been promising to come up with new legislation to regulate the construction industry. Although talks on the new legislation began more than 15 years ago, this has not happened.