With reputation of being a major importer of products and services, Namibia has also witnessed the emergence of 100% Namibian owned companies that have managed to build strong reputations and expertise in various sectors of the economy. In the construction sector, one such company is OTESA Civil Engineering (Pty) Ltd and below is extract from an interview with its recently appointed Managing Director, Schalk van Niekerk.
Wo) Briefly introduce yourself, your profession and your current position at Otesa?
SVN) My name is Schalk van Niekerk. I have been working in the civil engineering construction industry in various positions, starting as a site engineer and working my way up to contract manager. As of 4 November 2019, I was appointed as the Managing Director of OTESA Civil Engineering (Pty) Ltd.
WO) Kindly give us a brief history of the company, services offered and where it is today?
SVN) OTESA Construction was established in 2009 and renamed in 2013 to OTESA Civil Engineering (Pty) Ltd. OTESA offers various construction services. These include the Construction of Roads, Bridges, Runways, Water- & Sewer Treatment Plants, Reservoirs, Dams, Sports Complexes, Buildings, Water-& Sewer- Reticulation Infrastructure and more.
The company has since inception successfully undertaken and completed numerous remarkable projects in the civil engineering construction industry. These projects include Namibia’s first Arrestor Bed outside Usakos; Numerous Road Construction Projects, including the second phase (27.6km) of the Upgrade to Dual-Carriageway of the Windhoek-Okahandja road; Upgrading to Bitumen Standard of Main Road 120 from Okatana to Onhuno, Upgrading to Dual Carriageway of MR120 from Oshakati to Okatana, Construction of two 5MW PV Plants at Okatope and Infrastructure for Base Transceiver Sites for MTC throughout Namibia to mention a few.
The Company has grown significantly over the past 10 years and established itself as one of the leading independent Civil Engineering Contractors in Namibia, capable of taking on and completing any project, no matter the size, to required specification and quality.
WO) What would you say is your vision for the company going forward?
SVN) My vision for OTESA is to achieve our mandate which is to “To be Namibia’s premier EPC solutions provider” and to continue delivering quality projects timeously and within budget in Namibia and Internationally for the benefit of the end users regardless of where they are. We believe in “Engineering the Nation’s Progress” and pride ourselves in having successfully undertaken many notable projects which resulted in us becoming one of the leading civil contractors in Namibia. Our corporate roots coincide with Namibia’s development as a modern nation and we want to continue meeting the demands of a changing era and people's aspirations for the future through sound construction operations.
WO) Do you see the current state of the economy as a challenge or an opportunity?
SVN) I think it is a bit of both. The state of the economy had a significant impact on the Construction Industry which resulted in several companies closing down and an increase in the unemployment rate. The SME’s were the biggest casualties. Nevertheless, OTESA wavered through the storm and experienced significant growth. We thank the Government of Namibia through the Roads Authority for the support we have received so far.
WO) What current major projects is the company currently undertaking in the country?
SVN) We are currently busy with our joint venture partner on the construction of the final 22km stretch of Dual-Carriageway between Windhoek and Okahandja as well as the Upgrading to Dual Carriageway of Main Road 120 from Oshakati to Okatana.
WO) What do you think is the solution to funding challenges for the implementation of infrastructure projects in the country?
SVN) One of the biggest challenges we have in the Namibian Construction Industry, is the fact that most of the Larger Projects are not given to Namibian Contractors. Certain provisions of our Procurement Act have not been streamlined to allow local contractors to carry out most of the infrastructure projects. As a result, a large portion of the funds for the infrastructure exits Namibia. The result is that reinvestment of the funds in Namibia don’t take place as it should. The private sector generates less revenues and consequently, has to reduce capital expenditure on infrastructure projects. Same for Government revenues, as less taxes are paid etc.
Keeping as much of Namibia’s money in Namibia, might not be the solution, but will definitely be a start.
WO) What is your comment about the notion that local companies do not have the capacity to handle big infrastructure projects?
SVN) The notion is completely unfounded. I think Namibians have the required skills and expertise to take on most of the big infrastructure projects currently implemented in Namibia. The biggest challenge is the government’s procurement systems’ reluctance to acknowledge local capacity and to support local capacity growth through, for instance streamlining the procurement systems to award certain tenders to local companies. It must also be said that the players in our market cannot compete with certain foreign companies on prices, especially those owned by their local and national governments. Therefore, we urge the government to look beyond price when awarding major tenders but be aware of the leakages created by foreign companies and the opportunities lost in tax revenue. Therefore, whichever way one looks at it, it is not in the interest of our economy to award these major projects at the expense of local companies. Compounding the problem is some stringent conditions set by international loan agencies suc
h as the AfDB, which ultimately excludes the participation of local companies. In short, it is not a question of capacity as we have demonstrate that local companies can carry out major projects, but is a combination of lack of clear procurement strategy that empowers local companies, lack of understanding of the repercussions of awarding projects to foreign companies, inability of compete with foreign government sponsored companies and conditions set by international loan agencies.
Namibian Contractors and including OTESA are more than capable to handle large infrastructure projects and this have been proven in many instances. Since inception, we have provided quality performance, not only in completion of projects on time, but also through outstanding project management and administration. As mentioned before, OTESA is currently busy with a major project of close to N$ 1 Billion, being the construction of the last 22km stretch of Dual-Carriageway between Windhoek and Okahandja, in which we have a majority stake of 60%.
WO) In terms of skills in your sector, how do you plan to address that, considering the impact it has on the successful execution of projects?
SVN) Over the past 10 years, there has been a significant improvement in skills in the construction industry. We have some instances where we can testify that the involvement of some foreign owned companies improved the skills profile of the country, by having explicit skills transfer strategies. For example, with the upgrading of the dual carriageway from Windhoek to Okahandja, OTESA owned only 30%, but due to explicit skills transfer strategy, we were able to accumulate sufficient skills to now own 60% of the project, a perfect example of skills development.
The government, through the Roads Authority, should be commended for compelling every major Contractor to employ and transfer skills to locally owned small Contractors. The system under the SMEs Training Course (Labour Based Projects) and Emerging Contractors Training Courses has been designed in a way to develop local companies, from being small, graduating to emerging and eventually to major Contractors. This is a very good example of how best to fill the skills gap in the country and the Roads Authority must be commended for this.
Our aim as OTESA has always been to endeavour to train as many Namibians as possible, through explicit skills-transfer programmes in line with the Roads Authority’s requirement. We also have a specific programme called the Student Internship and Development Programme where we attach students from UNAM and NUST to our projects in order to transfer on-site skills.
Also, the Namibian Government has created a very good system to, in a way, force the companies to provide regular training to their employees by introducing the VET levy the Namibia Training Authority.