‘20p.c. subcontract policy a challenge’

ADHERENCE to the 20 percent subcontracting policy has not been impressive because of lack of necessary legal backing to keep foreign firms in check, Ministry of Housing and Infrastructure Permanent Secretary Danny Mfune has said.

The policy requires that 20 percent of contracts awarded to foreign firms should be sub-contracted to locals.

“Compliance on the 20 percent subcontracting policy has been a challenge because it was not adequately supported by legislation and this is why we are repealing the ZPPA Act,” Mr Mfune said.

Mr Mfune said it was Government’s desire to have majority of infrastructure projects implemented by local contractors.

Mr Mfune said the Ministry of Infrastructure and other line ministries were reviewing the ZPPA Act to compel all foreign contractors to sub contract local companies to build capacity.

“Government’s desire is that we should reach a stage where most of these infrastructure contracts are done by local contractors because currently the high value contracts are being done by foreign contractors,” Mr Mfune said.

Mr Mfune said the Act would help develop technical and financial capacity of local companies to handle high value infrastructure contracts.

“Once there is full compliance by foreign contractors on the subcontracting policy, it will help our local contractors to develop technical and financial capacity to execute big Infrastructure projects,” he said.

Mr Mfune said there had been challenges in the way the 20 percent sub-contracting policy has been implemented.

“These challenges emanate from big contractors not willing to engage the local contractors and when they come on board they are given works which are very difficult to handle,” he said. Mr Mfune said the repealing of the

ZPPA was in its final stages and would resolve issues of compliance on subcontracting policy.