News / National
Zimbabweans warned against fronting for foreign contractors
26 Jul 2016 at 06:58hrs | Views
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.
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.
Source - chronicle
