DELAYED payments to government contractors have left one of the country's top construction companies, Bitumen World (BW), with no choice but to cut down jobs.
Problems bedevilling the construction sector are not new, following endless pleading for authorities to consider timely payments for work done in fulfilment of the government's agenda to revamp the country's infrastructure.
Market watchers believe the government is withholding the payments, especially in the local ZWG currency, in a bid to curtail parallel market activities, which trigger depreciation. Just recently, mineral exporting companies revealed that the central bank has not been paying their 30% export surrender in local currency.
The latest decision by Bitumen World demonstrates the authorities' appetite to uphold currency stability even at the cost of other critical economic imperatives.
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"The Zimbabwean government, one of the company's largest debtors, is experiencing significant challenges in making timely payments to its contractors. The government is facing delays in settling arrears, affecting various projects, including road rehabilitation and dam construction.
"While efforts are underway to establish payment plans and small payments have been received, these financial constraints have contributed to the company's decision to realign its operations to remain resilient in a challenging fiscal environment," said the company.
The company said this necessary transition reflects a committed effort to adapt to the current economic challenges, including operating under cash flow pressures caused by delayed payments from clients.
BW said it recognises and deeply values the dedication and professionalism of all its employees and is committed to handling the process with respect, transparency, and dignity, offering support to those affected through severance packages and transition assistance.
BW CEO, Andre Zietsman, said the decision has been very tough but had to be made due to limited options at hand.
"Over recent months, we have engaged in extensive discussions and evaluations to guide Bitumen World through this difficult period. While the decision to restructure was not made lightly, it is essential for ensuring our long-term viability and ability to continue contributing meaningfully to infrastructure development in Zimbabwe and beyond," he said.
He said the employees who have worked tirelessly to restore the country's infrastructure glory will, unfortunately, suffer heavy blows when they see their jobs going down the drain.
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"The tragedy of these layoffs is that they impact the very people who built this prestigious brand -- a brand that was wholly created by Zimbabweans," said Zietsman.
The company committed to handling the process with respect, transparency, and dignity, offering support to those affected through severance packages and transition assistance.
