The State Minister for Works, Gen Edward Katumba Wamala has admitted there were no deliberate efforts by government to ensure local contractors are awarded some of the big construction projects in the country but noted this is soon going to change.
Local contractors have always complained of being left out in awarding contracts for big projects in the country in favour of foreign firms including Chinese and Japanese.
Speaking during an engagement forum by Uganda National Association of Building and Civil Engineering Contractors(UNABCEC) in Kampala, Gen.Katumba said that a number of the big projects in the country are funded using loans from development partners and that some of the pre-financing conditions include dictating the contractor to be awarded the project.
“In some of the big projects, it is unavoidable to use foreign contractors because it is dictated in the pre-financing conditions and there is no way we can stop them,”Gen.Katumba said.
The State Minister for Works however assured local contractors that government is working on ring-fencing some of the big projects for them.
He explained that in future, certain projects will only for local contractors.
“We are discussing with UNRA to see that some projects are ring-fenced for Ugandan contractors. Projects like the ones for 5km and 10km and with time this will go up,”Gen.Katumba told the contractors.
Speaking at the same function, the UNABCEC president, Francis Karuhanga complained that on many occasions, local contractors cannot compete with their foreign counterparts because the projects need big financial muscles that they don’t have.
“We need shs1.2 trillion worth of equipment as local contractors in the next five years but no single bank can manage to lend us so as to be able to satisfy the need whereas the foreign contractors are financed at low interest by their mother countries so they are able to raise the capital required,”Karuhanga said.
“Government should come out to assist us through funding and lower interest rates so we can compete favourably with the foreign contractors.”
The local contractors also asked government to help register and classify all contractors in the country as one of the ways to stabilize the industry.
According to the UNABCEC president there is need for contractors to be put in clusters ranging from small, medium and big .
“We should emulate Tanzania and Ethiopia with grades from one to seven based on performance and this will promote transparency and fair competition during procurement of works in the construction industry,”Karuhanga said.
However, in response, the State Minister for Works, Gen.Katumba Wamala to come up with joint ventures that would help them raise the required capital to take up the big projects and also compete with foreign firms.
“Your industry is still virgin but you need to form joint ventures and that way government can see how it can come it. There is need for reorganization.”