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Friday,November 27,2020 13:54 PM

Local contractors bag over sh1 trillion

By Edward Kayiwa

Added 19th March 2020 10:52 AM

Of this, about sh574b (22%) worth of contracts were reserved for national and resident providers, while sh162b (6%) was awarded through mandatory subcontracting by the foreign providers.

Local contractors bag over sh1 trillion

Kiira motors officials celebrate after unveiling the first electric bus in Uganda last year. Over sh1.1 trillion was bagged by BUBU contractors the previous financial year

Of this, about sh574b (22%) worth of contracts were reserved for national and resident providers, while sh162b (6%) was awarded through mandatory subcontracting by the foreign providers.

The Public Procurement and Disposal of public assets Authority (PPDA) has said about sh1.1 trillion was shared between local and resident companies in the 2018/19 financial year across the roads, cement, steel and construction sectors.

The biggest chunk, according to PPDA, was shared among operators in the roads sector. They took about sh736.9b from various contracts awarded by the roads regulator, Uganda National Roads Authority (UNRA). According to PPDA, this stood for 28% of the sh2.6 trillion budget upon which UNRA operated for the year ending 2018/19.

Of this, about sh574b (22%) worth of contracts were reserved for national and resident providers, while sh162b (6%) was awarded through mandatory subcontracting by the foreign providers.

"Most of these engaged in mechanised maintenance of selected unpaved national roads, reconstruction of washed out and failed bridges in Northern Uganda, routine maintenance of the Kampala-Entebbe Expressway under Kampala station, drainage improvement of works, designing and building of strategic bridges on the national network and routine maintenance of paved roads under Kampala Station," PPDA executive director Benson Turamye said.

He said over sh212b, of the Kampala Capital City Authority's (KCCA) sh406b budget, was expended to companies in civil works for the design, update, as well as construction and upgrading of roads in the city.

He said KCCA has also reserved the supply of construction materials, such as asphalt, worth sh33b, for routine maintenance and improvement works to only national and resident companies through framework contracts.

Previously, he said local contractors complained of missing out on the ongoing infrastructure projects despite the Government spending huge amounts on roads, power, mineral excavation and other projects. He, however, said the new reservations would boost the capacity of local companies to compete with foreign conglomerates for big contracts in the long term.

In 2017, the Government reserved all contract works, worth sh10b and below, for Ugandan firms as part of efforts to build local capacity.

Also, 30% of the value of procurement for contracts above sh45b by foreign companies was reserved for local suppliers as the Government moves to promote local content in public procurement.

The PPDA spokesperson, Sylvia Kirabo, said the assessment results indicate a big score in Government's efforts to empower local entrepreneurs for future projects. She said the implementation of the reservation schemes has the potential to impact manufacturing industries in the country, producing especially inputs for construction.  She said cement and steel companies reported an increase in the value of inputs procured for large value projects in 2018/19, as they majorly supplied major construction projects in the country.

About sh30b was paid to players in the manufacture of construction inputs for Isimba power project, Karuma power dam, construction of the National Medical Stores in Kajjansi, Entebbe and supply of plastic pipes to the National Water and Sewerage Corporation.

She said before the issuance of the guidelines on reservation schemes, almost 90% of the cables for construction of power lines were imported from China and India. However, during the last financial year, UEDCL reserved power line construction contracts, worth sh38b, for national and resident providers, out of which sh2.9b was for the procurement of cables and conductors.

According to their umbrella organisation, the Engineers Registration Board (ERB), local engineers often miss out on big projects because the bar on requirements is raised unnecessarily high, making it impossible for any to qualify.

Last year, the finance minister, Matia Kasaija, advised local engineers and contractors to form consortia in order to get Government support as they strive to meet the required standards for winning contracts for big infrastructure projects.

He said the Government is spending bout sh4 trillion each year on infrastructure projects, most of which are awarded to foreign firms because local ones lack financial and technical capabilities.

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