Government Needs To Patronise Local Contractors More – Ishaq Ibrahim
News
May 17, 2019 Admin20Leave A Comment On Government Needs To Patronise Local Contractors More – Ishaq Ibrahim

It takes only nano-seconds for anyone hearing the name Ishaq Ibrahim to make some casual connection with Isyaku Rabiu. You won’t be wrong for, in deed, both of them are from Kano, both are into construction even though they are not related.
Even so, the lesser known Ishaq is holding his own credibly as a builder with a construction firm, Technocrats Engineering Limited, where he is CEO. Technocrats Engineering isn’t quite a household name as the multinationals you know, Julius Berger plc, for instance.
But Technocrats’ architectural works are everywhere around the country, from east to west, north to south, your local bank, for example, or the house of a prominent individual where you are invited for lunches or dinners. As the CEO discloses to newstimesafrica, Nigerian builders are competent enough, as far as construction is concerned, if only the Federal and State governments are willing to change the existing rules that favour foreign companies…

How long have you been in the construction business?
I have been in it for a long time. I remember when my father in Kano then goes to get contracts from government and I accompany him to the construction site where you hire labourers, workmen, artisans and all of that, put them together either for drainage works, culverts, renovation of buildings, roads, among others. He was into it.

I developed interest in seeing that kind of activity at that early age; sometimes from nothing to something. You see roads and no drainage on both sides, suddenly you see very nice drainages coming up, box drainage sometimes called culverts and all that. I picked interest from there. I read Quantity Surveying which is an aspect of the building industry. What really attracted me to reading Quantity Surveying was because at that time, the way he conducts his business, it was not so technical like it is now. They just go to the local government and because they know them, they give them an award letter and tell them what to do. They wouldn’t have sat back to say this is a drawing, go and cost it. Look at how much you want to do it, so they would factor in their profits and all of that. No. They just take these jobs because they needed them and then they go execute, whatever comes out is their profit. But now you can predetermine the profit you make on any contract. I kept asking him, how much he is going to spend on it and what is his profit? He says of course there is profit, if there is no profit, they won’t give them in the first instance meaning that he doesn’t even know what is likely to be his profits. They just dabble into it and whatever they make out of it becomes their profit. So, I got to know that there is a course called Quantity Surveying which is just like construction estimator which estimates the cost of constructions from labour to plants and equipment and materials so that you can predetermine what is the entire cost of construction – roads, bridges, dams, heavy engineering works and all of that.

In most cases for our parents there is no dichotomy between overhead and profit, everything that comes becomes a profit. At the end of the day when they give a project of N100,000 and the balance they get is N20,000, they believe they have made a profit of N20,000 out of it. That affected my curiosity to search for how it can be done better.

What are the challenges in this line of business?
The challenges have to do entirely with government. Nigerian government does not really believe in local contents, they don’t believe in the ability of the building industry. Look at it, Julius Berger has been in Nigeria for a very long time, they were small when they came into Nigeria but because of the level of patronage and our belief in foreign neocolonialism, all government projects are handled by Julius Berger. When I say all, I am talking about the heavy industrialized projects; that way they were able to make so much profit that they expanded, bought equipment that even government does not have and today they have become indispensable.

Then, they were very small but because you kept feeding them with a lot of projects, all they need do was to go out of the country, bring some technical aids into the projects then execute. You may not know that most of the people on the Julius Berger site are not really on their payroll. They go out, source for all these guys and they come to execute your bridges, rails, airports etc. and those ones go back and the money remains in the company and they use it to expand. Look at Cappa and D’ Alberto, I’m told they have projects till 2023; that some clients are prepared to wait. That is how bad the situation is. Meanwhile when you go to those sites, majority of the people you find there are Nigerians. Only a few engineers and site supervisors you see. Government patronage for indigenous construction firms is very low. They only give you if they must give you because you are close to them or projects the foreigners cannot take.

Secondly, there are no concessions like, for instance, building materials. The cost of building materials and specialized building materials are high. We don’t manufacture them here in Nigeria. Most of them are imported at a very high cost and some of these imported materials cannot favourably adapt to our climate like industrialized buildings. Materials that were used are not those that were researched into for this climate and so, over time, you find out that the cost of maintenance becomes high.

Again, government does not really prioritise infrastructure in Nigeria. There is so much government can do through the building industry, so much can engage many people, reduce unemployment but if you look at housing estates, how many can you really point at in this country? Very few! I am talking about 1000 and above houses except Gwarimpa in Abuja which is about the largest in West Africa, outside that there is none. 1004 in Lagos have just 1000 flats. We don’t have massive funding for housing and even infrastructure – good roads, roads that have like five lanes on both sides. That way you engage idle hands and some of them will be encouraged to learn one trade or the other and you reduce unemployment. Infrastructure can be used also as economic booster because if you do like the fourth mainland bridge you toll it. You have made life easier for people. They don’t need to drive all the way to Falomo to connect and heat up everywhere. It has so many ripple effects on our economy. For example, again, we are told we consume about 60m litres of fuel in a day, it will be so because of traffic but if you expand the roads, you would have multiple options where people can drive to wherever they are going. The challenges are massive because government does not see construction as a veritable option for economic development.

There are so many requirements to bid for a project in Nigeria. We have over 20 requirements. I have ever thought that the requirement for anything would just be your ability to deliver, your capability but no, you would be asked for all kinds of documentations that are not directly relevant to the subject. For instance, you are asked to go and bring three years tax whatever, go and bring PENCOM, NSITF, Bureau of Public Procurement, etc. All these are documents that if you are given a contract, those agencies should do their jobs. It shouldn’t be a condition for me to get a contract. If a company is awarded a contract, the tax office should know that they should go and collect their tax. You cannot say no, I cannot give you contract because I have not paid tax. What is the relationship? Are you helping the tax people to collect tax to do their job? Are you helping PENCOM to enforce their laws? No, they go to organisations, ask questions. Then you make the process so cumbersome and unachievable. How many young firms can meet up those conditions? There is another one they call Group Life for your staff, you will do PENCOM itself, then you do performance bond with another insurance company, then you go and pay national social insurance trust fund, you pay that for like 11 years in retrospect. You also pay industrial training fund; the list is endless because you want to earn a contract. The question is when you put all these encumbrances together – and these are not a guarantee that once you get all these documents contract is there waiting for you – no, it is just to make you eligible to bid for these projects and that is the end of it.

The challenges are just enormous and contract does not come every day. You need an office, you pay office rent, pay staff salary, running cost in the office, office equipment, etc. How do you cope? And it is not as if government believes in indigenous companies to say the contracts were prioritized so that we can easily get some of these contracts and then expand. That is why the big companies and sometimes some of our rich individuals go abroad to get contractors to build structures for them in Nigeria. Look at our young ones here in Nigeria, most of the Togolese have taken over the artisan jobs. If you want a good plasterer, mason among others go to Cotonou, Ghana, Togo.

Given your experience in this business, the Apapa, Surulere, Okota, Ikorodu roads axis have been littered with articulated vehicles especially on the bridges, what does that portend?
It is a reflection of how we manage our activities. In the first instance, those bridges are not meant for static loads. We have dynamic load, we have static load. The bridges itself are loads on themselves. Then we have the super imposed loads and we have the dead weight. If you put all these factors together, the bridges are being subjected to very high load and with time, there will be consequences. Those bridges are designed for specific weight. The bridge cannot take any weight put on it.
And then when a vehicle, no matter how heavy a vehicle is and is in transit, the bridge can accommodate the weight but when it becomes static for a long time, then there is danger but of course government hardly cares because whatever happens to those bridges is not going to be taken care of by their resources. If you look at the traffic jam it creates, it slows down economy- time is wasted. A lot of people burn unnecessary fuel to get to where they are going. Then on our health, the stress but our leaders have siren wherever they are going and if anything happens to the bridge all they need do is to sign another contract for its repair. They don’t see it the way we see it but it is really unfortunate.

What is the way forward for government to encourage indigenous contractors?
You are churning out engineers by the day. Most of the universities in the country churn out very brilliant engineers, you should begin to plan how you accommodate them. You cannot be churning out graduates of engineering, architecture, and all of that in the building industry and there are no provisions for them but when you encourage smaller construction firms you can categorise them – complex projects, projects that are unique in nature can be handled by multinational construction companies but not construction of box buildings, offices, street roads, culverts, government buildings in Abuja secretariat and all of that.

You could say the likes of railways, dams, power stations, massive water treatment plants, cesspools, etc, are specialized projects but how many of such projects do we have? Very few! Look at the railways they are doing, it has taken us more than 10 years to get it done. You can split some of these projects for indigenous construction firms. You do the platforms, piling, rail-tracks and all that. They can split it for Nigerians. You need to test them. You cannot just write them off. It is even an indictment that you are churning out engineers you don’t trust that can perform. This is one of the easiest way government can deflate the unemployment scenarios that we have. Make it less cumbersome for construction firms to bid for projects. During the time of NITEL, before you get a landline, you have like almost 25 lists of items, today, you buy a sim card for N200 or N500 and you are already online. When we are telling them then, it was as if it was not possible, today everybody can see. Try indigenous construction companies, these guys are fantastic, very good. They will give you equally good product. I don’t know where it came from that we don’t trust one another. It is like a prophet who is not respected in his domain. If we continue this neo-colonialism, we will continue to have what we have now. You go to get a job, they say bring five years’ experience, how do you get the experience when you have never been employed? If I want to employ more people now, I need to employ based on the facts that there are projects. Maybe the National Assembly should be encouraged to bring up a law that certain categories of projects must be handled by local contractors. And then you encourage private individuals and corporate bodies to key in into that idea, when they fail there are punitive measures. Try them, let them fail, there are punitive measures you can take. You can even foresee failure. Projects do not come up overnight. There are stages and there are tests that would be carried out. There are so many procedures you can monitor and it will not fail. There are professional construction companies owned by professionals in the building industry and there are construction companies owned by businessmen. There is nothing wrong with that arrangement for as long as the qualified staff are employed to handle these projects. Government can monitor what is going on.

Before substructure is done you do your investigation, the type of foundation that is supposed to be there and after that, the design of the substructure is there. You ensure the right materials with the right supervision and all of that and then stage by stage, overtime, these construction companies would develop. Nobody will be waiting till 2023 to have his project done. There are professionals that can deliver. So, it is either by law or by encouragement.

Can you tell us some projects you have embarked upon?
We have done quite a few. When we set out, we didn’t set out to carve a niche in the financial industry but fortunately most of our jobs are banks, financial institutions. We have done more branches than any private projects we have done. In, fact, I will say that 97 per cent of our projects have been bank branches – various bank branches all over the country. It is just about three per cents are probably individual projects. We get more of those jobs from the banks than the general public. We have built a school, private residence, a few of them like that. What those banks wanted is your ability to deliver if you have the capacity to do it. That is why they are able to build 400 to 500 branches and they are standing, you hardly hear of any bank collapse because they were not interested in bringing stuff that are not related to your ability, let PENCOM do their jobs.

Source : http://newstimesafrica.com/news/government-needs-to-patronise-local-contractors-more-ishaq-ibrahim/