Turnkey projects threaten local businesses

Governments, donors and investors in the region are being urged to take another look at contracts for turnkey projects by the Botswana Freight Forwarders’ Association. The use of mainly Chinese companies to be solely responsible for delivering major projects is leaving local companies out of the value chain, according to Oduetse Makgane, chairman of the Botswana Freight Forwarders’ Association. The freight industry in Botswana was hit hard by the global recession as mining and government contracts were postponed or cancelled due to lack of demand for diamonds, the mainstay of the country’s economy. Those projects which were already in the pipeline were run by foreign companies, which favoured suppliers from their own countries over those based in Botswana. Chinese companies delivering turnkey projects have been singled out for particular criticism. A solution, he says, is to include clauses in turnkey project agreements that insist on the use of local suppliers wherever possible.