China eyes Nam road contracts

WHILE Chinese construction companies have virtually taken over the construction industry in the country, recent news suggests that it’s just a matter of time before local road contractors are the next target of Chinese expansion.

A confidential Cabinet document shows that plans are afoot for the Road Construction Company (RCC) to form a joint civil engineering company with a Chinese State-owned road and railway construction entity, MCC Communication and Engineering Technology Corporation.

The planned civil engineering company is expected to vacuum up all the capital road and railway construction projects in Namibia while the firm will only start participating in open tenders after 2013. The proposed joint venture between the two State-owned entities will rely solely on Government construction projects that will be ‘preferentially’ allocated to the RCC as part of State support to its turn-around strategy.

The Daily Sun is possession of a Cabinet submission by Works and Transport Minister Erkki Nghimtina, in which he sought immediate Cabinet approval that will pave the way for the establishment of the joint venture. The submission for the planned construction firm was done in February and almost a month later, President Hifikepunye Pohamba came out staunchly defending Chinese businesses in the country “It is worth noting that the intended partnership between the RCC and MCC will be the first of its kind in Namibia,” Minister Nghimtina wrote to Cabinet in his submission last month.

The proposed civil engineering firm is expected to swallow up the biggest share of major national road construction projects that have been budgeted for N$1.17 billion in this year alone. If approved, the firm is also poised snatch up a big chunk of the N$433 million allocated to railway construction in the 2011/12 financial year. Amongst the major road projects billed for this year, is the upgrading of the Tsintsabis-Katwitwi Road with cost estimates of N$349 million and the Gobabis-Otjinene Road upgrading project with a budgetary allocation of N$213 million this year. The northern railway extension has been allocated N$286 million in this year’s budget.

The firm will however rely on the Chinese technical personnel although a commitment has been made that the proposed company will employ a substantial number of National Youth Service members. “It is worth noting that China has enormous human capital in all various disciplines, including the targeted industry. MCC has access to key professionals in the civil engineering industry which can be sourced immediately”, Nghimtina told the Cabinet. The proposal to Cabinet further indicates that the Chinese company will be the main source of materials and equipment supply.

The Works and Transport Minster further wants Cabinet to give the nod to more RCC joint ventures in future with “any other future Chinese entities” apart from MCC. One of the recommendations in the Minister’s submissions is that Cabinet should direct the Works and Transport Ministry to identify and award both “road” and “railway” construction projects to the RCC/MCC consortium.

To sugar-coat the intended proposal, Nghimtina wrote that the no unskilled labour will be imported into Namibia by the proposed company to carry out projects in Namibia. Young Namibian graduates in engineering will also be attached to MCC professionals to gain the necessary experience and competencies, Nghimtina said.

“This is one of the pre-conditions of RCC to MCC and MCC has committed themselves to it,” Nghimtina wrote to Cabinet. The proposal says that the RCC is aiming to eventually become financially self-reliant so that it will no longer have to rely on cash injections from Central Government.

Nghimtina’s submission also shows that MCC is already in the process of setting up offices in Namibia.

click to enlarge HERE COME MORE CHINESE: RCC busy with the Tsumeb- Katwitwi Road construction © Photo: Ellanie Smit