Africa-Press – Eswatini. The Minister of Finance Neal Rijkenberg has explained the tender conditions tied to the African Development Bank (AfDB) loan and clarified concerns over local contractor participation in major infrastructure projects.
Speaking during the Finance in Focus session under the Ministry of Finance, Rijkenberg addressed concerns from local contractors who have expressed frustrations over their ability to access government tenders, particularly those linked to large contracts funded by international loans.
“Sometimes when we issue contracts in the country, our local contractors say that one should break them up or structure them differently so they can also participate,” Rijkenberg said.
He used the latest road project tender as an example, revealing that government had taken steps to ensure inclusivity.
“What we did in the contract proposal was to clearly outline that a third of the work is guaranteed to go to local contractors, to Maswati contractors.
That does not mean they cannot participate in the main tender. They definitely can.” He said.
However, Rijkenberg acknowledged that local contractors often face difficulties in meeting guarantee requirements, which are standard in high-value contracts.
“When we talk of guarantees, it doesn’t necessarily mean the contractor must come with cash. They can get insurance, bring that to a bank, and the bank issues the guarantee backed by the insurance,” he explained.
“There are ways to structure the guarantee without putting up hard cash, and some contractors do manage that. Maybe it’s complicated for others, but there are options.” said the Minister in addition.
Rijkenberg further stated that breaking up large contracts into smaller ones to accommodate more local contractors can significantly increase the government’s cost burden.
“If we had to break a contract up, each contractor must have their own site camps, we need more government supervisors, and it becomes more expensive to manage,” he said.
“Bigger projects usually cost less because of the scale equipment, personnel, and logistics are more efficiently handled by a single contractor.” He said in addition.
He noted that government has had prior experiences where splitting projects across multiple smaller contractors led to project failures.
Minister of Finance Neal Rijkenberg during the conference.
“We’ve had episodes like Tunusa, where the job didn’t get done. I’m not blaming anyone, but failed contracts have cost us a huge amount of money as taxpayers,” Rijkenberg said.
Addressing calls to reserve 100% of major projects for local contractors, the Minister said the government must consider long-term value for taxpayers.
“If we have to ask the taxpayers or road users, you’ll probably find that it is in their best interest to have the road built quickly and at the best price,” he stated. He cited the example of the dam currently under construction.
“The company from mainland China that’s building the dam offered a price almost half of what the other contractor quoted.
So do you go with the local contractor at a much higher price, or do you go with the one offering the best price while still guaranteeing a portion of work to locals?” Asked Rijkenberg.
Rijkenberg also addressed claims that the Ministry of Finance had influenced the tender conditions attached to the AfDB loan.
“One must understand, the Ministry of Finance is the one that goes to raise the money. All the conditions of the loan are done between the funder and the line ministry—in this case, the Ministry of Works,” he said.
He said it would be incorrect to blame the Ministry of Finance for any conditions relating to how the project was tendered.
“I’m not trying to say the line ministry is doing something wrong. I actually believe they’re doing the right thing in how they handled this tender,” he said.
“We’ve done everything we can as government to make sure local contractors can participate, and we believe the outcome of this road project will be positive.” he said in addition
Rijkenberg maintained that ensuring value for money remains the top priority while still creating opportunities for local players in the construction and infrastructure sectors.
The AfDB loan-backed infrastructure project is one of several initiatives government is implementing to improve the country’s transport network, support economic development, and create jobs.
Rijkenberg concluded by reiterating government’s commitment to fair and transparent procurement processes while urging contractors to explore available tools that can help them meet qualification requirements, including alternative guarantee arrangements.
“We are not shutting anyone out. The door is open for all contractors who are ready, and there are mechanisms in place to support those who are willing to meet the standards,” he said.
Minister of Finance Neal Rijkenberg also addressed broader factors affecting government procurement and infrastructure implementation, beyond the specific concerns tied to the African Development Bank (AfDB) loan.
He explained that when the government undertakes major infrastructure projects, several cost-efficiency and project management considerations come into play. These include the overall cost of supervision, the logistics of multiple work sites, and the potential for delays or failures when contracts are fragmented across multiple smaller contractors.
He emphasised that international financiers, such as the AfDB, often operate within a framework that prioritises transparency, technical capacity, and delivery efficiency.
These standards may inherently favour larger contractors with the financial backing and project experience required to meet complex requirements.
Despite this, government had ensured that significant portions of the work such as one-third of the road project were ring-fenced specifically for local contractors.
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