As of 2024, Uganda still faces issues with incompetent contractors in the road sector. Notable cases include the Mukono-Katosi road saga in 2013 and the ongoing project on selected Kampala roads (Sir Apollo Kaggwa Road, Kyebando Ring Road, 7th and 8th Streets in the industrial area), revealed during a recent project monitoring exercise by Prime Minister Robinah Nabbanja. In the Mukono-Katosi case, the contract was awarded to a legally non-existent company, followed by controversial advance payments and unusual attempts to subcontract the entire project to another company.
For Kampala roads, the contractor is weak, evidenced by their thin presence and inadequate progress, attributed to either loopholes in existing laws and policies or lax due diligence.
The Public Procurement and Disposal of Public Assets Authority (PPDA), established in 2003, and subsequent regulations, along with the Ministry of Works’ National Construction Industry (NCI) policy, provide a solid legal and policy framework for infrastructure projects. However, the real issue lies in due diligence practices. During the Kampala roads inspection, Prime Minister Nabanja questioned how weak contractors were selected. A KCCA official cited the lowest price bidder being awarded the contract. The 2010 NCI policy had anticipated problems with awarding tenders based on the lowest price, including underpricing and failure to execute work, resulting in a multitude of cumbersome and disagreeable claims, and stunted growth of companies, leading to insolvency and bankruptcy.
Fast forward to the present, PPDA bid evaluation regulations 2023 prescribe a series of criteria to determine the best-evaluated bid, culminating in a combination of two sub-scores from the technical and financial aspects of the bid to obtain a total score, which is then used to determine the bidder to be recommended for contract award. This method can reduce the effect of underpriced bids by assigning a lower financial sub-score than the technical sub-score (for instance, financial sub-score 40 percent and technical sub-score 60 percent). Additionally, the regulations provide for negotiations in specific situations before a recommendation to award a contract is made. During project execution, there is a provision for additional works and amendments in the awarded contracts, with contract price changes ranging from 1 to 25 percent of the original contract, depending on the specific circumstances.
Public officials serving on contracts committees of various government ministries, departments, and agencies (MDAs) such as KCCA play critical roles during the entire process of evaluating contractors. Officials tasked with project execution after contract award also have a crucial role in controlling the allowable variations (1-25 percent) in the original contract price. Oftentimes, similar officials have overlapping roles across contractor evaluation and project execution, creating a fertile ground for potential conflicts of interest. The existence of officials with cross-cutting roles can disincentivise some unscrupulous individuals to compromise due diligence exercises so that covert cliques are formed within MDAs to take undue selfish advantage of the allowable variations in contract works and prices.
The Kampala roads case and the Mukono-Katosi saga from a decade ago highlight the unavoidable need to strengthen the due diligence functions of contract committees in MDAs. This need extends beyond road agencies, as these issues cut across other sectors, including local governments such as districts, municipals, town councils, etc. The government also needs to fast-track its capacity-building efforts for the local construction industry as outlined in the NCI policy 2010. This will make the due diligence exercise relatively cheaper and easier compared to dealing with foreign companies.
Additionally, where procedures for checks and balances exist, validation of due diligence reports become effective. These approaches can safeguard the contractor selection process and result in awarding contracts to competent companies to facilitate the timely execution of road sector projects to the required quality within the budgeted funds. Quality road infrastructure is essential for the economic development of the country.
Angello Murekye is a civil engineer (PhD), candidate in transportation infrastructure engineering at Virginia Tech in the United States, Managing Director at SAKM Engineering Limited.
[email protected] |@angellomurekye