High fuel prices push up building costs
Sep 11, 2008
HIGH fuel prices have pushed up construction costs by up to 16%, data from the Uganda Bureau of Statistics (UBOS) has indicated.
By Alice Kiingi
HIGH fuel prices have pushed up construction costs by up to 16%, data from the Uganda Bureau of Statistics (UBOS) has indicated.
Peter Opio, the UBOS principle statistician in charge of energy and infrastructure, advised that given the trend, contractors should have an escalation clause to protect them from making losses accruing from the increasing construction material prices and labour costs.
An escalation clause gives contractors a firm price for 90 days when quoting for long-term projects.
It evaluates cost fluctuations in construction works by adjusting the contract price to compensate the contractors.
Opio was speaking during the release of the seventh series of the quarterly Construction Sector Index (CSI) at the Statistics House in Kampala on Tuesday.
The CSI monitors the quarterly price trends of materials and labour costs in the construction sector. Opio said prices for civil works also increased by 7%.
Opio explained that the cement manufactured for the domestic market was hugely exported to Sudan, Rwanda and Burundi.
This, he said, had prompted the importation of cement from Mombasa, leading to high transport costs.
A 50kg-bag of cement costs between sh25,000 and sh28,000.
He added that the sector also faced imported inflation from Kenya.
“Prices have remained high in Kenya,†he said.
HIGH fuel prices have pushed up construction costs by up to 16%, data from the Uganda Bureau of Statistics (UBOS) has indicated.
Peter Opio, the UBOS principle statistician in charge of energy and infrastructure, advised that given the trend, contractors should have an escalation clause to protect them from making losses accruing from the increasing construction material prices and labour costs.
An escalation clause gives contractors a firm price for 90 days when quoting for long-term projects.
It evaluates cost fluctuations in construction works by adjusting the contract price to compensate the contractors.
Opio was speaking during the release of the seventh series of the quarterly Construction Sector Index (CSI) at the Statistics House in Kampala on Tuesday.
The CSI monitors the quarterly price trends of materials and labour costs in the construction sector. Opio said prices for civil works also increased by 7%.
Opio explained that the cement manufactured for the domestic market was hugely exported to Sudan, Rwanda and Burundi.
This, he said, had prompted the importation of cement from Mombasa, leading to high transport costs.
A 50kg-bag of cement costs between sh25,000 and sh28,000.
He added that the sector also faced imported inflation from Kenya.
“Prices have remained high in Kenya,†he said.