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Uganda's roads industry still faces many challenges, the Uganda National Roads Authority (UNRA) has said as the government struggles to improve the country's dilapidated road network
UNRA, which was set up seven years ago to revamp the roads, charges that the government's strong reliance on its own staff, due simply to the amount of work needed as quickly as possible, could undermine the development of a strong and competitive private sector.
"There are also a variety of issues associated with the composition of the private sector that need to be addressed if Uganda's road network is to grow and be well maintained," added UNRA.
The agency explored some of the key challenges facing Uganda's road sector in its latest review, citing the inefficiency of small private contractors. It said Uganda has an abundance of small-scale contractors providing road services, although these tend to capture insufficient amounts of steady work to be able to train and retain good quality staff or to put in place a high standard of quality control and business management systems.
One consequence is a vicious cycle in which a small-scale contractor wins work, hires staff to complete that work, loses them once the job is done, and then has to hire new inexperienced personnel for the next job. This means that their staff often does not gain the necessary skills to operate equipment properly, resulting in poor quality workmanship and slow contract delivery, UNRA stated.
It is estimated there are currently around 800 road contractors in Uganda, and which fall into three categories: small companies working on lots of small-scale, low-value contracts with limited capital, few employees and little or no plant and equipment; a few medium-sized contractors able to undertake larger, higher-value contracts; and a very small number of large contractors.
UNRA said that in order to improve the roads, Uganda needs to create a pool of technically competent and professional medium-sized businesses able to steadily capture work, retain skilled staff and deliver on time to the required standard. The roads body also dismissed the argument that using government labour and equipment is cheaper than contracting the private sector, describing it as another myth that arises from the way that the government calculates the costs of ‘force account’.
When private contractors bid for a job, they factor in such items as staff salaries, the buying and maintaining of vehicles and the depreciation of equipment into their costings. The same costs apply to the government’s force account, but, when the government prices a job, these are instead counted as overheads. Therefore, there is little difference to the basic costs to tax payers of using either private contractors or the government’s own workforce, UNRA explained. In fact, the costs of the private sector are more transparent.
The agency noted only a few small-scale contractors will grow to be medium-sized contractors since they lack capital and expertise and are vulnerable to changing market conditions as a result.
Similar stagnation is apparent among medium-sized contractors, which need a substantial and predictable flow of work to enable them to invest in plant and develop workforce competence. The roads body added that an important step in changing this is the introduction by UNRA of 'term contracts', which make a specific contractor responsible for all maintenance work in an area for a fixed period. This currently applies to national roads.
UNRA said that since its inception in 2008, the tarmac national roads network has increased from 2,800km to over 4,000km currently, and over 1,000km of the old paved roads have been rehabilitated or reconstructed. It projects that by 2016, the country will have a tarmac roads network of 5,000 km.