Local contractors miss it on bankable projects

PLAYERS in the construction sector have been challenged to prepare bankable projects that would attract funding amid indications that most local contractors do not carry out feasibility studies.

The lack of bankable projects is cited among major stumbling blocks hindering contractors from clinching tenders and accessing loans.

This came out during the inaugural Africa Infrastructure and Built Environment Conference and Exhibition, (AfriConfex 2022) in Bulawayo yesterday.

The two-day exhibition, which ends today, is running under the theme “Solid Foundation. Stronger Future. – Exploring Linkages in the Infrastructure Value Chain”.

AfriConfex Conference at ZITF

Speaking during a roundtable discussion on creating conducive construction industry policy framework, Zimbabwe Investment Development Agency (Zida) private-public partnership specialist Mr Pardon Nyandoro urged contractors to invest on feasibility studies for projects.

He said that would unlock funding, which is available with the private sector.

“Funding of infrastructure is a challenge at the moment mainly because contractors do not have bankable projects and if they have, they won’t be prepared according to set standards,” said Mr Nyandoro.

“That is a key component to access funding. Without a feasibility study, it is difficult to mobilise funding both in domestic and international markets.”

ZB Financial Holdings Group projects and property manager, Ms Bathabile Dube, said funding is available for local contractors but financial institutions require feasibility studies and bankable proposals before availing funding.

“There is funding for local contractors but one of the difficulties is that some don’t have bankable projects,” he said.

“Another challenge is that the sector is not regulated and it is difficult for financial institutions to evaluate projects,” said Ms Dube.

To that end, Construction Industry Federation of Zimbabwe (Cifoz) president Mr Emmanuel Chimedza said the acceleration and enactment of the Construction Contractors Council Bill would cushion them.

The process of crafting the Bill started in 2000 and for two decades the process has been slow even though the construction industry had sent input.

However, the Second Republic has heightened the process and recently, National Housing and Social Amenities Minister, Daniel Garwe, said the draft Bill was now ready to be sent to Cabinet for approval.

Mr Chimedza said since the sector is not regulated by an Act of Parliament that hinders growth particularly for emerging local contractors.

“Contractors or the implementers of projects are not regulated and that is why we are pushing for it to be enacted soon.

“That will give protection to local contractors. At the moment we are not protected and the Bill has a clause that states that when foreign players are granted contracts, 20 percent of that project scope should be set aside for local contractors. The Bill will also protect clients from unscrupulous engineers,” said Mr Chimedza.

He urged Zida to extend that protection to local contractors by granting them certificates that would accord players exemptions.

On funding, he said loans availed by financial institutions are for short-term projects and that presents challenges.

“Local banks are offering short-term loans of up to two years and that does not help much. The ideal situation is five years. We need funds to retool,” he said.

At the exhibition pavilion, several construction firms, including Government agencies, are showcasing various products.-chronicle.c.zw