Construction policy flags corruption in E1.4bn sector

MBABANE – Corruption, weak tender processes and poor oversight are among persistent problems threatening transparency and Construction policy flags corruption in E1.4bn sector

fair competition in Eswatini’s E1.43 billion construction industry.

The concerns are contained in the National Construction Industry Policy 2025–2031, which identifies corruption, unfair practices, financial constraints, poor service delivery and inadequate oversight as major challenges facing the sector.

The policy highlights weaknesses in the systems governing procurement, tendering, contract allocation and regulatory oversight.

It says the problems are significant enough to require reforms to improve transparency, accountability and fair competition.

Corruption has been a major concern in the construction industry, alongside competitiveness, efficiency and regulation, the policy says.

Stakeholder consultations identified unfair competition, limited development opportunities, declining quality of products and materials, declining skills and delayed payments among the sector’s problems.

The policy also raises concerns about corruption, the absence of a unified platform for government opportunities and unfair competition allegedly fuelled by monopolies and foreign companies.

Inadequate enforcement and oversight have contributed to sub-standard materials and deficient infrastructure delivery, it says.

The concerns are significant because government remains the dominant buyer of construction services.

Government accounted for 77 per cent of construction contracts awarded in 2023, with central government accounting for at least 44 per cent, parastatals 28 per cent and local government five per cent. The private sector accounted for 23 per cent.

The policy therefore places emphasis on how public construction opportunities are advertised, tendered, evaluated and awarded.

The scale of the industry is reflected in the 2022/23 contract figures contained in the policy, where it states that contracts across different categories of construction work were valued at E1.43 billion, comprising E1.13 billion in local works and E300.5 million in foreign works.

General building works accounted for the largest share, at approximately E1.01 billion. Local works accounted for about E998.8 million, while foreign works were approximately E7.8 million.

It is said foreign companies were awarded approximately E106.6 million in civil specialist works, compared with about E10.4 million for local firms.

In electrical specialist works, foreign contracts amounted to about E78.7 million, compared with approximately E17.3 million for local works. It was said foreign companies also received about E20.4 million in general mechanical works, compared with E4.6 million for local firms.

Also, manufacturers and suppliers received approximately E83.5 million in foreign works, against E14.3 million in local works. The figures are contained in the policy’s table of contracts awarded according to type of work in 2022/23.

On the other hand, the policy describes tender processes as an area of particular concern, citing corruption, collusion, bribery, construction mafia tactics and unethical behaviour.

It identifies inadequate tender processes and a shortage of specialised expertise in adjudicating construction procurement as challenges to effective project delivery.

It also points to a lack of fairness and transparency in the distribution of construction projects and the issuing of tenders.

The concerns are presented as structural problems affecting the industry, rather than findings against specific companies, officials or tenders. The cited section provides no evidence that any particular contract in the E1.43 billion total was obtained through corruption.

To address the concerns, the policy recommends that all construction contracts should be publicly disclosed, including details of the bidding process, the winning bid and the terms of the contract.

It also proposes secure and anonymous whistleblower platforms for reporting suspected corruption, collusion, unethical practices and irregularities in tender and procurement processes.

The policy calls for clear, standardised construction procurement guidelines covering the development, awarding and review of infrastructure tenders and contracts.

These processes should be aligned with requirements for empowering local companies.

It further proposes reviewing the contractor grading and categorisation system to ensure fairness in the allocation and awarding of work.

Furthermore, the policy links procurement concerns to the limited participation of local companies.

It identifies weak enforcement of regulations governing foreign companies’ involvement in construction and growing reliance on foreign firms, including for small projects.

Market dominance by large contractors is also cited as a problem that can stifle small contractors and emerging enterprises.

Local firms face other obstacles, including poor access to finance, difficulty providing securities, challenges obtaining affordable or comprehensive insurance and inadequate business-management skills.

Government proposes creating quotas for local contractors and consultants in national and international infrastructure projects.

It also proposes a fair system for allocating government infrastructure projects and says public and private companies should give preference to Swati firms and companies for construction works and supplies within the country.

Another proposed measure is a first-preference procurement tool for local companies and manufacturers on government-funded infrastructure projects.

It is said the challenges are not new as it traces the current review to the 2001 draft National Construction Industry Policy, which sought to increase local participation, formalise the industry and introduce regulation.

More than two decades later, many of the same problems remain. The review found continuing imbalances in promoting and maximising the participation of local companies and labour.

The 2001 policy had also raised concerns about transparency in the procurement of construction services and called for clear communication and full disclosure of information to the public.

The country subsequently established the Construction Industry Council and the Registration Council of Architects, Engineers, Surveyors and Allied Professionals through legislation enacted in 2013.

However, after more than 10 years of implementation, the new policy says similar challenges persist. It states that local contractors and consultants still face limited job opportunities, while the existing policy and legislative framework has struggled to keep pace with technological and global developments.

The policy places corruption, tender transparency, accountability and local participation at the centre of reforms.