July 21, 2020 10:52 am
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Non-bidders take over infrastructure projects; New Vision_pg 23_24
Who is taking the business? the CoST Uganda _GPP infrastructure analysis reveals that 99.3% of the tenders for infrastructure projects went to local firms from the period 2018- Jan 2020. The private sector says they need an interpretation of what are local companies and the Local Content Policy by Government. Whereas, 0.7% of the tenders go-to non-local firms, interestingly, these took the highest share of the cost.
From the foregoing, while local companies won almost all the tenders, the proportion of those owned and controlled by Ugandans and non-Ugandans is not precise. There is a need to disaggregate the data further in terms of national and resident providers consistent with the local content guidelines. This would help to design initiatives to promote competition. Resident and global providers mostly have better human and equipment capacity, work experience, and financial advantages (they tend to access lower interest rates from their countries of origin) and, therefore, will often outcompete the national providers if the latter are not deliberately supported. Policies like compulsory subcontracting, advance payment, reservation of specific contracts should be enforced.