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.