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Construction Industry Demands Government to Pay Debt Before 15 December

Herman Smit Technical Manager at ACCESS Laboratories Services (Pty)Ltd, a company that specializes in all quality control related services for the construction and engineering industry of Namibia, said the situation is quite bad. “There is a lot of people that’s been retrenched,” said Smit.

115 companies in the Construction Industry participated in a survey conducted by the Construction Industries Federation of Namibia (CIF) as businesses in the building and construction sector are severely affected by late payments on Government projects. The construction sector has given Government until 15 December 2016 to pay the outstanding debt of over N$1 billion otherwise as stated in a media statement from the Construction Industries federation (CIF), 25% of the 115 companies that have participated in the survey will be bankrupt.

It further states that other strategies include the reduction of the size of businesses (39.13%) with 43 companies reducing their labour costs. Measures include: not filling vacant positions, no bonuses, reducing work hours, retrenchments and cutting training and development related expenditure. Some companies have started selling off equipment, machinery and plant.

When asked about possible solutions that could mitigate the situation, respondents to the survey highlighted that Government needed to pay on time; i.e. within 28 days (84.62%) and needed to pay penalties on late payments (77.78%) and that effective payment systems (76.92%) needed to be established.  85 of the 115 businesses also stated that Government should “be brutal” against corruption; and 84 respondents (71.79%) stated that no tenders should be awarded to foreign companies.

Spotlight news this week, focusses on the non-payment by Government to construction companies,

    • The number of jobs lost because of this,
    • How businesses in the building and construction sector are affected because of late payments,
    • Results of a survey conducted by the Construction Industries Federation (CIF),
    • And we also sat down with ACCESS Laboratories Services (Pty)Ltd’s  Technical Manager Herman Smit on how this is affecting their business.



-Article and Interview by Maggie Forcelledo