Lo­cals warned against fronting for for­eign con­trac­tors

Chronicle (Zimbabwe) - - Business - Bianca Mlilo Busi­ness Reporter

ZIM­BAB­WEAN busi­nesses have been warned against fronting for for­eign con­trac­tors thereby prej­u­dic­ing lo­cal play­ers of in­come op­por­tu­ni­ties.

Dr Antony Mwanaumo, chief ex­ec­u­tive of­fi­cer of the Zam­bia Coun­try Road Fund Agency, told del­e­gates at­tend­ing the in­au­gu­ral In­fra­struc­ture Con­fer­ence dur­ing the Min­ing, En­gi­neer­ing and Trans­port Expo (Mine En­tra) last Wed­nes­day that small com­pa­nies were los­ing busi­ness through fraud­u­lent ten­der pro­cesses.

“As you know in the ten­der­ing process you need the bid bond even when you win the con­tract to get the ad­vance pay­ment, you need the bond guar­an­tee,” he said.

“Most of us may not have the col­lat­eral to do that and have to come up with what is called the con­struc­tion fi­nance ini­tia­tive, which helps the con­trac­tor ac­cess those doc­u­ments so that we can level the play­ing field par­tic­u­larly for the lo­cal con­trac­tor.

“In that process let us avoid what is called fronting where you’re used as a lo­cal con­trac­tor to front for a for­eign con­trac­tor, fa­cil­i­tate ac­cess to equip­ment and con­struc­tion ma­te­ri­als where you use the economies of scale to bring to­gether small scale con­trac­tors to be able to ac­cess the equip­ment and do the job.”

A bid bond is a debt se­cured by a bid­der for a con­struc­tion job or sim­i­lar type of bid-based se­lec­tion process for the pur­pose of pro­vid­ing a guar­an­tee to the pro­ject owner that the bid­der will take on the job if se­lected.

The ex­is­tence of a bid bond pro­vides the owner with the as­sur­ance that the bid­der has the fi­nan­cial means to ac­cept the job for the price quoted in the bid.

Dr Mwanaumo said small to medium con­trac­tors, when prop­erly sup­ported, would do a much bet­ter job than other big com­pa­nies, adding that his or­gan­i­sa­tion had cre­ated more than 24,000 jobs through con­tract­ing lo­cally.

He also com­mended the Zim­babwe Na­tional Roads Ad­min­is­tra­tion for pro­vid­ing lessons on toll col­lec­tions to its Zam­bian coun­ter­part, not­ing that they had recorded an ex­po­nen­tial in­crease in roads rev­enue col­lec­tion.

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