The National Construction Industry Council has launched the Construction Industry Retention Fund at a colorful event which was held on the 15th of June, 2018 at Sunbird Capital Hotel. Presided over by the Principal Secretary in the Ministry of Transport and Public Works, Mr. Francis Chimsinga, the launch was attended by contractors, consultants, client organizations and other stakeholders.
Retention funds in construction contracts is a percentage of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the Client to ensure that the contractor properly completes the activities required of them under the contract.
The Construction Industry Retention Fund is regulated by the National Construction Industry Retention Funds Regulations which were gazetted on 6th April, 2018 under Government Notice number 14 of 2018. The main aim of the regulations is to promote contractors while safeguarding the interests of clients; and shall apply to all construction clients including Government Departments; Parastatals; Private Sector; Non – Governmental Organization and Individuals.
The Fund will be managed by Continental Asset Management and is in line with the industry’s strategic direction aimed at building the capacity of local contractors. Through this fund parties to a construction contract will be accorded a fair deal as the Fund will enable clients to hedge financial risk associated with retention of such funds, get quick remedy for any construction defects while, on the other hand, enabling contractors quick and easy access to the funds upon successful execution of the contract. Furthermore contractors will also be able to use the fund as a collateral for obtaining banking facilities and related financial instruments.