THE Government plans to establish a state construction company.
Works minister John Nasasira said the move followed the overly inflated construction costs by the private sector.
He said the Government spends $1m (over sh2b) on tarmacking a kilometre of road using private contractors.
â€œStarting the firm will increase competition in the large-project construction segment, thereby reduceing construction costs,â€ Nasasira said.
The minister was speaking during a transport sector review meeting at the Imperial Royale Hotel in Kampala on Thursday.
However, development partners warned the Government against the move, saying it would kill privately owned construction firms.
They argued that their varied experience in developing countries had shown widespread inefficiencies in the road sector, where the state undertakes the works.
Instead, the Government, through the Uganda National Roads Authority, should attract international contractors to the Ugandan market in view of the increased demand for contractors.
Presenting a statement by development partners, Vincent de Visscher, the head of the European Commission to Uganda, said this would put an end to the call for a state-owned construction company.
Koboko MP Margaret Baba Diri noted that the private sector had not done well in road management.
â€œIt is a challenge to the stakeholders, but let us try the state-owned firm and see what happens. We only hope for the best,â€ she said.
Government to set up construction firm