Local contractors seek more opportunities in government projects

Dar es Salaam. Tipper and machine owners have voiced frustrations over being excluded from billion-dollar projects awarded to foreign contractors.

During their annual meeting under the Tanzania Tipper and Machine Owners Association (TTMOA) yesterday, the business owners accused some contractors of using only their own resources, sidelining local operators.

A businessman, Mr Christopher Temu, expressed deep concern, stating that local tippers and equipment owners are being overlooked despite government directives to prioritise their inclusion.

“If the government does not take action, we will fail to repay bank loans and eventually go out of business,” he warned.

TTMOA secretary-general, Mr Bernard Akilimali, detailed the challenges facing association members.

He pointed out that contractors often abandon projects, leading to subcontractors’ equipment being seized as a way of holding them accountable.

“I fell victim to this. My equipment was seized because the contractor, who had received an advance payment, failed to complete the work. As a subcontractor, I was the one penalised. This is not fair to us,” he said.

He also cited frequent tax changes as a significant hurdle.

“In the past, we could import vehicles under VAT deferment, but this law has since changed, and there’s no deferment anymore,” Mr Akilimali explained.

In response, the minister for Trade and Industry, Mr Selemani Jafo, reiterated the government’s commitment to ensuring Tanzanians benefit from ongoing development projects.

“This is precisely why the government introduced local content policies, which, based on your accounts, are not being adequately implemented. This must be addressed,” Mr Jafo emphasised.

“It is unacceptable for a foreign company awarded a road construction project to insist on even sourcing gravel themselves without considering local tipper owners. We will look into this matter with colleagues from other ministries. Our aim is to ensure Tanzanians benefit from these projects,” he added.

Mr Jafo assured TTMOA members that gaps in local content implementation and challenges like taxation would be reviewed and resolved to provide Tanzanians with more opportunities.

“The investments we are making as a government are primarily intended to ensure Tanzanians reap the benefits as these projects are executed,” he said.

He acknowledged the critical role of tippers and equipment owners in national development efforts, promising to collaborate with other ministries to reinforce local content policies.

“I have noted this issue of gaps in local content. I will sit down with my fellow ministers to emphasise these areas so you can work effectively because your contribution is vital to the nation,” Mr Jafo concluded.

According to a report by Repoa, local content policies aim to maximise local participation through job creation, beneficiation, training, and the inclusion of locals in supply value chains as contractors.

When implemented effectively, local content can provide a significant source of income for individuals and national economies.

It has the potential to generate more revenue than government income from taxes, royalties, and fees by maximising expenditures on procurement and operations during project development phases.

Repoa’s findings show that up to 70 percent of extractive companies’ revenues are directed towards operational costs, including machinery procurement and repairs.

In contrast, only 30 percent of turnover contributes to government revenue through taxes, royalties, and fees.