Mozambican construction industry threatened by Chinese companies – CTA

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Mozambican construction industry threatened by Chinese companies – CTA

1:05 CAT | 08 Mar 2018

O País (File photo)

Mozambique’s main business federation has warned that the country’s construction sector is under threat from Chinese companies that work below cost price and in isolation.

“The intervention of Chinese companies is frightening: they are using low prices to erode the domestic industry,” Nelson Muianga, chairman of the civil construction sector at the Confederation of Economic Associations of Mozambique (CTA), said.

Speaking in Maputo on Wednesday at a sectoral meeting promoted by CTA and quoted by the Mozambican Information Agency (AIM), Muianga also complained that Chinese companies won construction tenders without allowing for Mozambican companies’ participation.

The result was that the construction industry was relying on the passage of the Local Content Law on foreign investments in Mozambique now under consideration in the CTA and for subsequent submission to the Ministry of Economy and Finance, which will take it to the Assembly of the Republic.

Castigo Nhamane, deputy chairman of the CTA’s Board of Directors, said that the Mozambican construction industry would continue to experience difficulties in the next three to five years if there were no sign of further development and economic growth.

“We are striding towards the collective bankruptcy of national construction companies,” Nhamane said, calling for government action.

Other details worry the industry. Muianga criticized the duplication of procedures in the case of enterprises with foreign financing, as well as projects being awarded to companies owned by employees of the contracting public institutions.

Source: Lusa