Centre for Trade Policy and Development- CTPD has backed the decision by ZESCO to source poles from foreign companies, sighting capacity issues with local companies.
Two local companies – the Zambia Forest and Forestry Industry Corporation – ZAFFICO and Copperbelt Forestry Company – CFC had earlier confirmed that they were capable of meeting ZESCO’s demand for wooden poles. ZESCO initially admitted to not engaging local suppliers first but the power utility has since indicated that they will go ahead to issue the said tenders to foreign firms.
CTPD in supporting ZESCO’s decision stated that the issue of local companies being able to supply goods and services when there is urgent need, is a tricky one, its one thing to say they can and it’s another to make sure that there is consistency in supply.
CTPD head of research Boyd Muleya told the Zambian Business Times – ZBT that in as much as parastatal companies like ZESCO are willing to give concessions [or tenders] to local companies, it is very difficult in terms of getting the best returns because most local companies give short repayment periods, hence ZESCO would opt for [a foreign] company that might offer them three things, payment periods that are favourable, the quality of what is being supplied and consistency in the supply of the products.
And when asked if giving of concessions or tenders to foreign companies is running away from the message that government has been preaching of promoting local business for local investments, Muleya stated that the thrust by the government is correct but the systems are not in place to ensure that the country attains that.
He told ZBT that whilst the local companies are preparing to be the suppliers that will be more reliable, companies are still free to get goods and services where there is consistent supply. “Not to say that we should not support our own, it is about preparing them to an extent were they are able to supply to that extent”, he said.
This is the case where Zesco limited was cleared by Zambia public procurement Authority- ZPPA over its decision to buy the 9 and 12 wooden poles from ten (10) foreign countries from South Africa and Zimbabwe. ZESCO was accused of needlessly externalizing the much needed forex for products that could be sourced locally at better prices.
