Road Sector Agencies sign MoU with Finance Ban

The Road Development Agency (RDA), National Road Fund Agency (NRFA) and Finance Bank Zambia Limited have signed a memorandum of understanding (MoU) called the Construction Finance Initiative (CFI) aimed at empowering Small and Medium Scale Contractors.

Deputy Minister of Finance, Hon. Miles Sampa witnessed the tripartite signing ceremony held at Hotel Intercontinental in Lusaka on Friday, 5^th April, 2013. Director and Chief Executive Officer for RDA, Engineer Bernard Chiwala and NRFA Director and Chief Executive Officer, Dr. Anthony Mwanaumo signed for their respective institutions while Finance Bank Managing Director, Mr. Barkat Ali signed for the Bank.

Various Contractors from both small and medium scale were present to witness the important event that will add value to their performance.

Speaking at the occasion, Hon. Sampa told the Contractors that Government was committed to uplifting their status from small to big contractors following this initiative. He said much as most contracts were being given to big contractors who in most cases were foreign companies, government was keen to see that local contractors equally benefited.

He said for each contract that was awarded to a contractor whether local or foreign,” a small village was being built somewhere”. He said the more local contractors were given contracts, the more the country would develop.

The minister warned local contractors against mismanagement of road funds advanced to them for construction as advancement payments saying Government would not tolerate destructive and retrogressive behavior.

And RDA Board Chairman, Mr. Willie Nsanda said RDA had a huge task to build quality roads in the Country and would therefore not tolerate shoddy works from the small and medium scale contractors now that they would be empowered by commercial banks like Finance Bank (Z) Limited and others that would be part of the CFI.

“I am delighted that commercial banks in general and Finance Bank in particular have begun to respond to the call aimed at creating and growing our small and medium scale contractors that will eventually transform into big contractors who will be able to create employment for the people of Zambia especially the youth which was one of the objectives of the Link Zambia 8000 Road Project,” he said.

Speaking at the same occasion, NRFA acting Board Chairperson, Mrs. Margaret-Chalwe Mudenda paid tribute to RDA and NRFA Boards and Management for flagging off strategies to build capacity of local road contractors through an integrated and highly consultative approach which brought under one roof small and medium scale contractors, commercial banks, insurance firms and equipment suppliers.

Mrs. Mudenda said as a financing Agency of all road projects, road transport, safety and related activities, the NRFA attached great importance to all initiatives by key players in the Road sector and Financial Sector aimed at growing the local capacity of the industry to sustain road construction and maintenance.

“I am hopeful, therefore, that the signing ceremony of this memorandum of understanding will help overcome the absorption capacity as our small and medium scale contractors will be exposed to broader financial and road construction equipment facilities,” she said.

Mrs. Mudenda said she was convinced that the full implementation of the MoU will make a long term and significant contribution in ensuring that road maintenance, rehabilitation and construction programmes on the existing road networks were executed with maximum capacity driven by mutual business understanding between the small and medium scale contractors, Finance Bank Zambia Limited and the road construction equipment suppliers.

And Mr. Ali said the Bank was ready to support the construction industry through the CFI as per the terms and conditions contained in the MOU. He said the initiative was aimed at arranging funding and building capacity of local road contractors, which will enhance and grow the road construction industry with mutually agreed upon key performance indicators.

Meanwhile, Chairman of the Small and Medium Scale Contractors Association, Mr.George Kakana pledged commitment to delivery of quality road works. He said it was embarrassing to read in the newspapers that some members of his association had abandoned work saying that should now be a thing of the past following the implementation of CFI initiative.