Delayed government payments is crippling the sector, say contractors   

Uganda National Association of Building and Civil Engineering Contractors (UNABCEC), has said the government failure to pay contractors in time especially those working on government projects has crippled the sector progress and performance.

Speaking during the association’s annual general meeting that took place at Hotel Africana in Kampala, Jamesone Olonya, the UNABCEC president, said that at least 90 percent of members have experienced payment delays due to the government.

In terms of the value chain, Olonya said that contractors employ a lot of people, calling upon the government to prioritize paying contractors because that goes to serving the entire nation

“We have been able to raise a very strong sense of advocacy especially to the government regarding paying contractors in time. We have met with the Ministry of Finance and (we told them) the need to prioritize contractors. Contractors contribute about 12 to 13% of the GDP, “he said.

He explained that although some contractors have been paid, the biggest percentage haven’t been paid, saying that this is one of the biggest challenges they have faced this year.

Olonya said that contractors are discouraged to do the business, adding that they are also subjected to potential distribution which means that local contractors will be seen as those that are not serious.

“Most of our providers(contractors) are actually offering service to the government and the private sector in this case will have been subjected to loaning to the government. In the event that the government is not paying in time, somehow you are already hurting the sector that is the thrust for development,” he said.

He noted that bankers would view contractors as people who don’t service loans which means that going forward, the industry will be slowly dying.

“If we are killing the industry, we are killing the competition from the government point of view. If you are killing competition that means the issue of value for money, get sacrificed in the process, “he said.

Olonya lays out the challenges the members faced this year

Olonya also said they supported the government's move to save Roko Construction Company, which in June had indicated that its operations had been weighed down by the effect of Covid-19.

“We are glad that there is an effort that the government has put towards Roko. It is a very formidable company. The output of effort is everywhere to be seen. We have been to various forums to make sure that the relevance  of the contraction industry is appreciated,” he said.

Olonya hinted of their five-year plan which include tightening controls to weed out quack contractors, negotiate for better loan terms and demand timely clearance of arrears by government among others.

Olonya also noted that failure to regulate the building construction sector is making the business community lose money and life, asking the responsible body to ensure that the sector is well-regulated.

Currently, there are only 420 contractors registered out of over 2000 building contractors operating in the country.

 

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