Little sway over foreign-led construction projects, Nekundi admits

Works and transport minister Veikko Nekundi says government’s ability to curb the perceived growing dominance of foreign contractors in Namibia’s construction sector is constrained by national procurement laws.

Speaking in parliament recently in response to concerns raised by Landless People's Movement (LPM) MP Dawid Eigub, Nekundi said the legal framework governing public procurement restricts ministerial influence, even in cases where outcomes appear to disadvantage local contractors.

“The procurement law is a protocol of this House… ministers are not even allowed to talk anything about procurement,” Nekundi said, adding that any perceived interference could trigger accusations of wrongdoing.

His remarks come amid mounting concerns that Namibian contractors are being edged out of major projects by large, well-capitalised foreign firms, particularly Chinese companies, which are often better positioned to meet strict tender requirements.

No edge

Eigub told parliament that local contractors are allegedly increasingly being reduced to subcontractors in their own country, with some forced to seek work under foreign firms.

He cited recent tender conditions issued through the Roads Contractor Company (RCC), including requirements for bidders to have at least N$70 million in available cash, experience delivering projects worth over N$1.2 billion in the SADC region, and performance guarantees of up to N$100 million.

“How will Namibian contractors meet these requirements?” Eigub pointed out.

‘Biting’ us

Nekundi acknowledged the concerns, saying he shares the frustrations and had previously warned about the long-term impact of such policies.

“Today it is hurting us and is biting us very badly,” he said.

However, he stressed that once procurement processes are underway, ministers are largely unable to intervene, leaving responsibility for reform with parliament.

He added that amendments to the procurement law are being considered to better position Namibians to benefit from public projects.

Beyond the legal constraints, Nekundi suggested that financial realities within the sector may also be influencing contractor selection.

He noted that entities like the RCC often face delayed payments of up to 60 days, creating cash flow challenges that can stall projects and lead to penalties.

As a result, contractors with stronger liquidity are more likely to be preferred, as they can continue work despite payment delays.

This, he implied, may inadvertently favour larger international firms over local companies with limited financial reserves.

Nekundi said he would engage RCC to better understand the rationale behind current tender requirements and report back, while calling for a collective effort to address the issue.

Locked out

Civil engineer Page Kashikuka argued last year that performance guarantees and high capital requirements place an unsustainable burden on local small and medium enterprises (SMEs), effectively locking them out of government-funded projects.

Kashikuka proposed scrapping performance guarantees for smaller projects and introducing site clerks to ensure quality and accountability, measures he said would lower barriers to entry while maintaining oversight.

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