In Uganda, the construction industry is shaped by a unique set of factors, including regulatory frameworks, economic conditions, and local industry practices. There are a number of methods that are being used to execute projects with the aim of achieving a designated goal/ plan of action. There are mainly four contractual networks used and these are:
1. Traditional Procurement System. Under this, the design team is essentially separate from the contractor’s team. This system is widely used when dealing with commercial projects like; roads, bridges, office block developments, hotels and mega apartments, plaza and shopping malls and government aided projects, dams etc.
This system encourages transparency and full accountability of funds and usually gets the best out of the contractor hence timely execution and quality works are priority. Sometimes, it’s referred to as: Design-Bid-Build (DBB), Common in government projects where transparency and competitive bidding are emphasized.
This system however has some shortfalls which include;
I. The main contractor is usually liable for shoddy works by the nominated subcontractor yet he has no say in their nomination/ appointment,
II. It also at times alienates the client when most of the work is done by the specialized subcontractors because there’s no direct reporting relationship.
2. Design and Build (D&B)/ Package Deal/ Turnkey Contracts. This is an arrangement where a project is delivered to the client in a completed state. Therefore, rather than contracting with various parties to develop a project in stages, a client enters into a contract with one party.
Most if not all contractors with the capabilities prefer this system because it gives them utmost authority and discretion from beginning to completion of the project. It’s commonly used in situations where the client is not sure about the design and complexity of the works. This gives Design and Build contracts require the contractor to do both the design and construction making sure he is in position to.
Usually turnkey projects in Uganda have majorly been executed in the roads sector where the contractor designs and when approved, he implements and hands over a fully functional road as agreed; and real estate development projects where construction is so that it could be sold to any buyer as a completed product.
3. Management Contracting. Here, the main contractor is required to provide project management services. This system is rarity because majority of the contractors don’t want to be reduced to the role of a consultant. It usually happens in scenarios where the main contractor has a very good relationship with the client or where works specified are to specialized and he will not carry out any construction works on the project but works will be done by ‘works contractors’ who are effectively subcontractors to the management contractor.
Under this, the problem in the traditional procurement system of the Nominated subcontractor is solved because the liability of the main contractor is restricted i.e. he is not responsible for the defaults of the subcontractor but instead these are directly answerable to the client on the basis of collateral agreement.
4. Public-Private Partnerships (PPP). This is mainly used for large infrastructure projects (e.g., roads, bridges). It leverages private sector investment and expertise. However, it’s comes with a hindrance in the sense of complex structuring and regulatory hurdles.
5. Construction Management (CM). In this system, there’s no longer a chain of middle men/ contractors but the client enters into a direct contract with each of the subcontractors and engages a Construction Manager to provide managerial services.
The risk shifts completely to the client. This is a common practice when it comes to private projects i.e. residential and setting up rental houses.
Regulatory and Institutional Framework
I. Public Procurement and Disposal of Public Assets Authority (PPDA)
– Governs procurement processes for public projects.
– Ensures transparency, fairness, and competitiveness.
II. Uganda National Bureau of Standards (UNBS)
– Sets and enforces construction material and quality standards.
III. National Environment Management Authority (NEMA)
– Ensures environmental compliance for construction projects.
IV. Local Government Acts
– Local authorities also play a role in approving and supervising construction projects.
Contractual Networks
I. Standard Form Contracts
– FIDIC Contracts. Widely used for international and large-scale projects.
– JCT and NEC Contracts. Occasionally used, especially in private projects.
II. Government Contracts
– Governed by the PPDA Act and include specific clauses for transparency and anti-corruption.
III. Private Sector Contracts
– Often customized but typically follow standard formats with specific local amendments. It is highly advisable that parties reference the East African Agreement and Schedule of Conditions of Contract (EAIA-East African Institute of Architects)
Roles of Stakeholders
I. Client (Owner)
– Government agencies for public projects.
– Private developers for commercial and residential projects.
II. Contractors
– Local contractors dominate small to medium projects.
– International contractors often lead large-scale infrastructure projects.
III. Subcontractors and Suppliers
– Increasingly specialized, but face challenges like financing and capacity building.
IV. Consultants
– Local and international firms provide design, engineering, and project management services.
– Quality and adherence to standards can vary significantly.
Challenges and Best Practices
I. Corruption and Transparency
– Corruption remains a significant challenge in public procurement.
– Best practices include adhering to PPDA guidelines, independent audits, and stakeholder vigilance.
II. Capacity Building
– Need for training and development of local contractors, subcontractors, and consultants.
– Encouraging professional certifications and continuous education.
III. Financing
– Limited access to affordable financing for contractors and developers.
– Solutions include government-backed credit facilities and public-private partnerships.
IV. Quality Control
– Ensuring adherence to standards through regular inspections by UNBS and independent auditors.
– Implementing robust quality assurance processes within firms.
V. Environmental and Social Impact
– Ensuring compliance with NEMA regulations.
– Incorporating sustainable practices and community engagement in projects.
Understanding these specific elements and addressing the challenges can significantly enhance the effectiveness of the above mentioned subject matter in Uganda’s construction industry.