Uganda's road construction costs rising every year

Dec 01, 2020

Uganda's high cost of road construction and maintenance is slowly becoming a threat to the country's plan to develop its transport infrastructure.

INFRASTRUCTURE|DEVELOPMENT|ROADS 

Seamlessly integrated infrastructure is crucial to any economic development. Infrastructure plays an important role in contributing to a higher rate of economic growth leading to improvement of the country's standard of living. 

"Infrastructure is key to integration in global and domestic trade and market systems.  As such, transport infrastructural problems limit a country's ability to engage properly and harness benefits in the globalization process. Uganda's transport infrastructure is an integral part of its regional and international competitiveness," says Steven Beyanga, a development economist. 

Unfortunately, Uganda's high cost of road construction and maintenance is slowly becoming a threat to the country's plan to develop its transport infrastructure. 

Over the past 15-20 years, the road sector has experienced significant increases in prices of road construction and maintenance which need to be addressed immediately if Uganda is to sustainably acquire an integrated transport infrastructure system. 

According to the National Development Plan III which was released recently, the average construction cost for upgrading roads to paved standard with bituminous surface treatment during the financial year 2018/19 was sh3.1B per kilometre as compared to sh2.36B per kilometre in the 2017/2018 financial year. 

The average cost of reconstruction/rehabilitation of the paved roads was sh1.8B per kilometer in 2018/19 as compared to sh1.96B per Kilometer the previous year.

Beyanga says, one of the reasons behind is the high costs of acquiring the Right of Way.

"The huge costs associated with compensation of Project Affected Persons (PAPs) escalate costs of infrastructure and increase project implementation delays," Beyanga says. 

The Bumbobi-Lwakhakha Road that was launched by the president.


"This problem is further worsened by speculators who acquire and/or develop land along the proposed transport infrastructure corridors in anticipation of high compensation from government," he adds. 

Examples of projects where land acquisition has escalated costs of project implementation include Kampala Entebbe Expressway (51.4 Km) with land and property compensation valued at sh331B and Kampala Northern Bypass (17.5 Km long) where land and property compensation worth sh83B was approved. 

Government has also lost land along with existing transport infrastructure (right of way) to illegal encroachers, mainly due to lack of enforcement of existing laws.

"Encroachers have made developments in wetlands, forests, along railway lines, airstrips, and aerodromes that have been non-operational for a long time. Ironically, encroachers expect and receive compensation when government needs to upgrade/expand existing transport infrastructure," Beyanga says, 

According to Aidan Musoke, a lecturer of economics at Makerere University, the other challenge behind high road construction costs is the weak local content capacity due to the weak local construction industry. 

"About 80% of civil works contracts in Uganda are undertaken by foreign/International road construction companies and a big portion of the road construction requirements are imported," Musoke says. 

UNRA officials at Centenary Park demarcating the right of way for the construction of phase 2 of the Kampala Flyover project. (Credit: Owen Wagabaza)


"The local construction industry is weak in terms of equipment, technical, and financial capacity. Consequently, the country is unable to develop a minimum threshold of competent national expertise for construction, operation, and maintenance of national transport infrastructure," he adds. 

Only 28 percent of all road contracts signed in 2018/19 were allocated to local contractors. 

Musoke says, taking all other factors constant, foreign companies should charge higher prices because they require a higher profit margin, cannot do small contracts, and have a higher price for domestic risks.

However, Allen Kagina, the executive director of Uganda National Roads Authority says that the focus should be on value for money.

"High Quality roads are expensive, but if we want cheap roads, we may get them but pay the price in quality. I think the focus should be on value for money and that often means paying more for quality," Kagina said in an earlier interview with the New Vision. 

"Like I have said in the past, roads are different, the way houses or furniture is different if somebody came and placed 3 storey building next door it would not cost the same as here because perhaps the material and designs are different, the overheads are different, the terrain is different," Kagina said.

"For instance in Ethiopia, I am told material is provided by the Government. Here it's the contractor supposed to look for it. Land acquisition is a big component of construction here. In other countries, the land belongs to the Government here it belongs to individuals. Many factors come into play," Kagina said. 

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