Construction companies discussing with UDB for cheaper loans
Mr Jamesone Olonya (L), the Uganda National Association of Building and Civil Engineering Contractors president and Mr Allan Mugisha of S-M Cathan Property Consults (R), shake hands after signing a memorandum of understanding to establish a digital platform for construction industry workers during the association’s annual general meeting in Kampala last week. Photo / Courtesy
What you need to know:
- Expensive loans, according to Mr Jamesone Olonya, coupled with delayed payments, especially for companies working on government projects, have made operations of UNABCEC members difficult.
Uganda National Association of Building and Civil Engineering Contractors (UNABCEC), has said it is discussing with Uganda Development Bank (UDB) for its members to access cheaper financing.
Speaking during the association’s annual general meeting in Kampala last week, Mr Jamesone Olonya, the UNABCEC president, said their members should be considered for cheaper financing.
“We are discussing with UDB so that they can give us single digit loans,” he said without providing details.
Construction companies, he said, by nature need patient capital because they take long to have gainful return on investment.
This, he added, is worsened by delayed payments, especially for companies working on government projects, noting that at least 90 percent of members have experienced payment delays due to government.
Mr Olonya also indicated that as UNABCEC they supported 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 stand with Roko. Their projects have been fit for purpose and they have been around for some time,” he said.
Roko was eventually bailed out through a supplementary request of Shs207b that was passed by Parliament in July. The annual general meeting brings together members to account for activities done to benefit members.
Mr Olonya also indicated that in their five-year strategic plan, UNABCEC will tighten controls to weed out quacks, negotiate for better loan terms and demand timely clearance of arrears by government, adding that the association also amended its constitution, affording it an opportunity to make members more accountable.
