UNFAIRENESS: Engineers Cry Foul Over Awarding Of Local Contracts To Foreign Firms

By PATRICK JARAMOGI

KAMPALA, Uganda|SHIFTMEDIA| Ugandan engineers are crying foul for not being considered by the government for the local projects that is majorly won by big foreign firms.

According to statistics, local construction firms, which make up 98% of the entire industry, only account for less than 15% of the national construction works.

Uganda’s expenditure on infrastructural projects which includes among other roads, airports and electricity has been staggering between 15% and 20% of the national budget over the past five years.  This is in addition to funding from development partners such as the World Bank, the African Development Bank, Islamic Development Bank and the European Union.

Dr Ronald Musenze, the Vice-Chairperson Uganda Association of Consulting Engineers (UACE) also lashed out at the Ugandan media for not supporting them by spreading this unfair business practices.

UACE is a body that unites consulting engineers. Formed in 1993, it is concerned with, and responsible for representing general business interest of consulting engineers in Uganda and their firms. It has 32 members, who are strictly vetted annually to represent the interests of the group. UACE is a member of the FIDIC- International Federation of Consulting Engineers.

Dr Ronald Musenze was presenting a paper: Working with the private sector, Experience of the contractors and consulting in engaging with the media and areas for improvement under UACE’s perspective.

The one day interface with Journalists held at Fairway Hotel in Kampala was organized by CoST Uganda to discuss Fair Business Practices.

 

Unfairness highlighted

Dr Musenze said much as most of the works can be done by Ugandan engineers, government prefers to award the lucrative tenders to foreign firms.

“What is surprising is that most of this works can be best done by Ugandans. We have some of the best consulting engineers in the world and have designed some of the best projects in the country,” said Musenze.

He said that much as government is the biggest spender in this sector, local contractors are struggling to get this money. “It is also sad that these foreign firms get the contracts, bring in their experts who represent 35% of the entire workforce but end up chewing 90% of the entire project funds,” he said. Many of these foreign firms dominate many sectors such as energy, water and roads that attract huge funding.

He mentioned delayed payments, lengthy and tedious procurement procedures, unfavourable tax returns, and low budgets as some of the challenges.

Why aren’t local firms winning tenders?

Dr Eng. Paul Sagala a leading engineer said the issue of International Financing is one of the bottlenecks.

“Most local contractor face competition from foreign companies and some also face challenges of financing that is always a requirement by government,” said Sagala.

 Issues at hand

Most local contractors we talked too described the tedious and bureaucratic requirements embedded in the procurement system as very frustrating and cumbersome.

Joshua Mukisa, an engineer from a local contracting firm (names withheld) said the procurement and bidding process is coated with massive corruption at different stages before one is finally awarded the contracts.

“We bided to construct one of the roads in Nakawa Division, but the procurement committee asked for 10 % of the entire project fee. When we calculated, we felt we would end up doing a shoddy work that would undermine our reputation, we lost the deal,” he said.

But the bottom line is that the procurement process in Uganda is still riddled with corruption and inefficiencies.  Corruption is endemic in Uganda, especially in public procurement.

Not all is lost

Despite the unfair business practices, CoST Uganda Chapter has tried to make it possible for local firms to win tenders under its Open Contracting system.

According to Gilbert Sendugwa, the Executive Director Africa Freedom for Information Center (AFIC) the procurement procedures can only be fair if rules are followed. Sendugwa says Open contracting can greatly help improve decision making in the procurement sector.

“We used to receive many complaints from the public before open contracting was introduced, but this is reducing since the public now knows which government office to approach when tenders are advertised,” said Sendugwa in an earlier interview.

PPDA speaks out

According to the Public Procurement and Disposal of Public Assets, there are many reasons why many local contractors don’t win tenders.

According to Edwin Muhumuza, the Corporate Affairs Manager PPDA, the argument by local contractors is that the bid documents make it difficult for them to win contracts.

He said that bid documents now require the provision of the powers of attorney, provision of the history of contract non-performance, valid bid security, specific experience and personnel capability among others.

“The public procurement agency is using open contracting data to identify potential irregularities in procurement processes. Public access to contracting documents has improved since open contracting reforms were introduced, as have communication channels between citizens, civil society and public servants,” said Muhumuza.

Muhumuza also noted that the government is drafting an amendment to the procurement law, the PPDA Act, that would improve transparency and accountability in the sector.

Government reacts

But according to Finance Minister Hon. Matia Kasaija, the issue of low financial muscle is another factor affecting local firms.

“As a government, we would like to work with low-risk companies compared to high risk companies.

“Government would like to work with companies that can guarantee completion of projects without asking us (government) for financial help,” he said.