Government backs local firms for major road projects as Zinara funding plan advances

The Government says major road construction projects will remain largely reserved for Zimbabwean contractors, while it pushes for Zimbabwe National Road Administration (Zinara) funds to be ring-fenced for road development.

The two-pronged approach is intended to strengthen local construction companies and address the funding shortages that have slowed the rehabilitation of the country’s road network.

Transport and Infrastructure Development Deputy Minister Joshua Sacco said the policy had already helped small local firms expand their operations and take on larger projects.

He was speaking during a plenary session at the Construction Industry Federation of Zimbabwe annual general meeting and congress, chaired by Urban Development Corporation chief executive Joey Shumbamhini.

Shumbamhini had asked what measures were in place to ensure local companies participated in large infrastructure projects, including highways and border posts.

Deputy Minister Sacco said the decision to prioritise domestic contractors was taken when the Emergency Road Rehabilitation Programme (ERRP) was introduced in 2019.

The programme, he said, had enabled companies that started with limited equipment — or hired machinery for individual jobs — to build the capacity required to compete for major contracts.

“Contractors who have built their capacity. So we as a ministry are very proud of this initiative,” he said.

Deputy Minister Sacco pointed to the Harare-Beitbridge highway rehabilitation as evidence that Zimbabwean contractors could deliver large-scale infrastructure projects when given the opportunity.

He said an Austrian company had previously submitted estimates of between US$2,5 billion and US$2,6 billion for the project, while the locally driven approach was nearing completion after about US$550 million had been spent.

Although the project has faced challenges, he said its progress demonstrated that Zimbabwe could undertake major road works using domestic contractors rather than relying predominantly on foreign companies.

“For roads, this remains a preserve of local contractors,” Deputy Minister Sacco said, adding that the same approach would continue under ERRP2.

Airports will be treated differently, with Chinese investors involved in financing and developing projects such as the planned upgrades at Charles Prince and Mutare airports.

Zinara funds at centre of financing proposal

The Government is also seeking Cabinet approval to prevent Zinara revenue earmarked for roads from being transferred into the Consolidated Revenue Fund.

Deputy Minister Sacco said the proposal could give the roads authorities access to approximately US$400 million a year and create a basis for borrowing against the revenue stream.

Such an arrangement, he said, would reduce the sector’s dependence on allocations from the national Treasury and help unlock more consistent road maintenance and construction funding.

Zimbabwe’s public infrastructure programme is being supported by a national budget allocation of more than ZiG26 billion, a new US$400 million road infrastructure fund and a US$500 million facility intended to revive stalled developments.

However, the scale of the work required remains substantial, with the Government acknowledging that financing — rather than contractor capacity — is now the main constraint.

Deputy Minister Sacco said local firms were, in some cases, sufficiently equipped to handle the available work, but the country’s deteriorating roads had created a workload that exceeded current funding levels.

Contractors are also dealing with rising input costs and supply disruptions.

Deputy Minister Sacco attributed some of the pressure to international factors, including the impact of the Russia-Ukraine conflict on fuel prices. He also said Zimbabwe’s construction boom had contributed to shortages of cement and higher prices.

Contractors facing shortages can apply to the Ministry of Industry and Commerce for permits to import cement, he said.

The Deputy Minister expressed hope that easing tensions in the Russia-Ukraine conflict and potential local oil discoveries would help reduce fuel costs in the future. New cement plants are also expected as investors respond to growing demand.

Procurement rules require foreign participation to be justified

Procurement regulations are being used to reinforce the preference for local companies.

Public Procurement Regulatory Authority of Zimbabwe (PRAZ) representative Tinotenda Chipangura said Section 29 of the Public Procurement and Disposal of Public Assets Act provides for domestic preference, while Statutory Instrument 215 of 2023 reserves specified construction work for domestic contractors in support of devolution.

Where a foreign contractor is engaged for reserved work, the procuring entity must demonstrate the role of local companies and submit supporting documentation, she said.

International contractors should only be assigned work that local firms are unable to perform, according to the procurement guidelines.

PRAZ has also developed affirmative procurement measures aimed at widening access for women, young people, war veterans, older persons, people living with disabilities and small and medium-sized enterprises.

The guidelines are designed to stop large companies from dominating opportunities that could benefit smaller businesses. They were developed with input from the ministries responsible for Industry and Commerce and Women Affairs.

Chipangura acknowledged concerns that some women-owned companies were being used as fronts for male-controlled businesses, while larger firms were allegedly registering multiple shelf companies to exploit quotas.

She said verification systems were being tightened to address such abuses.

PRAZ is also seeking to reduce barriers faced by smaller contractors, including demanding requirements such as three years of audited financial statements and bid securities.

Registration categories for SMEs and the reservation of low-value projects for local contractors in provinces such as Bulawayo are among the measures intended to make public procurement more accessible.

The policy challenge now is to ensure that the preference for local contractors is matched by reliable funding, transparent procurement and timely payment. Without those safeguards, the expansion of domestic capacity could be undermined by the same financial pressures that have delayed road projects in the past.