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THE REPUBLIC OF UGANDA

MINISTRY OF WORKS AND TRANSPORT

Policy for Development and


Strengthening the National
Construction Industry

January 2010

FOREWORD
The National Construction Industry (NCI), comprising both the building and civil
engineering sectors, performs an indispensable role in the economy of Uganda and in
the region as a whole. It delivers the physical infrastructure that is central to the
countrys economic development. Its activities create business to suppliers,
manufacturers and offer employment to professionals, skilled and unskilled labour. It
transforms private and public plans for capital formation and renewals from paper to
reality.
Over the years Government has increasingly realized that the management of the
countrys physical infrastructure requires collaboration of the public and private
sector. Government is also increasingly divesting itself of direct service delivery in
order to improve the efficiency and effectiveness of public services. It is, therefore, a
duty and an imperative of Government to ensure that there is a well-developed NCI
to implement physical infrastructure projects.
However, the NCI is generally fragmented and unsupported due to lack of both a
definitive Government policy and a strong institutional framework. Without a strong
NCI the development and maintenance of physical infrastructure will remain a
nightmare. The growth and development of the economy will be retarded.
Initiatives have been taken in the past to train local contractors and also create an
enabling environment, especially in the road sector, to ensure increased participation
of the local firms in physical infrastructure development and management. Although
tremendous achievements have been realised, the past initiatives to develop local
firms were not backed by appropriate Government policies and strategies to sustain
the continued growth of the construction industry.
In order to complement other Government policies for public sector reform,
privatisation, decentralisation and capacity building, my Ministry has found it
imperative to evolve a deliberate national construction industry policy. The new
Policy and Strategy aim to improve coordination, regulation and development of the
construction industry. The Policy and Strategy further aim to put in place an effective
institutional framework to address the current weaknesses in the construction
industry so that the private sector can efficiently and effectively participate and

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perform its crucial role in development and maintenance of the physical


infrastructure.
This Policy has the full support of Government and therefore I urge all those in
positions of responsibility, both in the public and private sectors, to embrace and
implement the recommendations contained in this Policy for the continued social and
economic development of our country. Successful implementation of the policies,
strategies and action plan will undoubtedly go a long way in fulfilling Governments
obligation towards the development of the national construction industry.
Preparation of this Policy was based on a comprehensive analytical and consultative
process involving a number of stakeholders in the public and private sectors. I
therefore wish to commend efforts of the representatives of the various Government
Lead Agencies, consultants and contractors who were involved in numerous
consultative meetings and workshops and for guiding the process.
I wish to thank our Development Partners particularly Danish International
Development Agency (Danida) for their financial support to the preparation of this
Policy.
My thanks further go to the Consultants for their in-depth study, analysis and
preparation of the documents that culminated into this Policy Statement.
I wish to thank my Permanent Secretary and his Staff for the invaluable time they
spent in preparation of this Policy document.

Hon. Eng. John M. Nasasira


MINISTER OF WORKS AND TRANSPORT

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TABLE OF CONTENTS
Page
FOREWORD ................................................................................................................................................................. i
TABLE OF CONTENTS ......................................................................................................................................... iii
ABBREVIATIONS AND ACRONYMS .............................................................................................................. vi
GLOSSARY ............................................................................................................................................................... viii
EXECUTIVE SUMMARY ........................................................................................................................................ ix
PREAMBLE................................................................................................................................................................ xiii
1.0

INTRODUCTION ....................................................................................................................... 1

1.1
1.2
1.3
1.4

Background ........................................................................................................... 1
The Vision for the National Construction Industry ............................................... 2
Policy Context and Justification ............................................................................ 2
Policy Development Process.................................................................................. 3

2.0

RELATED POLICIES, PROGRAMMES AND PAST INITIATIVES ............... 6

2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.1.6
2.1.7
2.1.8
2.1.9

Related Policies and Programmes ......................................................................... 6


Poverty Eradication Action Plan ................................................................................... 6
Public Service Reform Programme ............................................................................... 7
Privatisation.............................................................................................................. 7
Decentralization ........................................................................................................ 7
Plan for Modernisation of Agriculture (PMA) ................................................................. 8
Road Sector Development Programme ......................................................................... 8
Universal Primary Education and Universal Secondary Education .................................... 9
District Health Services Project (DHSP) ........................................................................ 9
Water Sector Reform Programme ................................................................................ 9

2.2
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
2.2.6

Past Initiatives ..................................................................................................... 10


National Roads Development and Maintenance ............................................................ 10
Establishment of Fixed Unit Rates .............................................................................. 11
Proposed Establishment of a Plant Hire Pool ................................................................ 11
Contractor Capacity Building under District Roads ........................................................ 12
Uganda National Association of Building and Civil Engineering Contractors ...................... 13
Housing Sector ........................................................................................................ 13

3.0

INSTITUTIONAL FRAMEWORK ................................................................................... 14

3.1
3.1.1
3.1.2
3.1.3
3.1.4

Government Ministries, Authorities and Agencies ............................................... 14


Government Ministries .............................................................................................. 14
Public Procurement and Disposal of Public Assets Authority ........................................... 15
Uganda National Roads Authority ............................................................................... 16
Other Agencies ........................................................................................................ 16

3.2
3.2.1
3.2.2
3.2.3

Business Development Organisations .................................................................. 16


Uganda Association of Consulting Engineers ................................................................ 16
Federation of Uganda Consultants .............................................................................. 17
Uganda National Association of Building and Civil Engineering Contractors ...................... 17

3.3
3.3.1
3.3.2
3.3.3
3.3.4

Professional Bodies .............................................................................................. 18


Uganda Institution of Professional Engineers ............................................................... 18
Uganda Society of Architects (USA) ............................................................................ 18
Institution of Surveyors of Uganda (ISU) .................................................................... 19
Uganda Institute of Physical Planners (UIPP) ............................................................... 19

3.4
3.4.1
3.4.2

Regulatory Bodies ................................................................................................ 19


Engineers Registration Board ..................................................................................... 19
The Architects Registration Board .............................................................................. 19

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3.4.3

The Surveyors Registration Board .............................................................................. 20

3.5

Universities and Technical Colleges ..................................................................... 20

4.0

KEY ISSUES IN THE NATIONAL CONSTRUCTION INDUSTRY .............. 21

4.1
4.1.1
4.1.2
4.1.3

Contracting Issues ............................................................................................... 21


Limited Capacity ...................................................................................................... 21
Limited Access to Credit ............................................................................................ 22
Limited Work Continuity ............................................................................................ 22

4.2
4.2.1
4.2.2

Consulting Issues ................................................................................................. 22


Informal Sector Practices .......................................................................................... 22
Constrictions in Capacity Development........................................................................ 23

4.3
4.3.1
4.3.2

Institutional and Human Resource Development Issues ..................................... 23


Need for Institutional Capacity ................................................................................... 23
Need for Human Resource Development ..................................................................... 23

4.4
4.4.1
4.4.2

Registration and Procurement Issues .................................................................. 24


Registration and Classification Scheme ....................................................................... 24
Tendering ............................................................................................................... 24

5.0

POLICY STATEMENTS ........................................................................................................ 26

5.1
5.1.1
5.1.2
5.1.3

Harmonise Roles and Responsibilities of the Public and Private Sector .............. 26
Training and Capacity Building ................................................................................... 26
Strengthening Public Institutions ................................................................................ 27
Improving Service Delivery by Private Sector ............................................................... 27

5.2
5.2.1
5.2.2

Regulate and Coordinate the National Construction Industry ............................. 27


Establishment of a Uganda Construction Industry Commission ...................................... 27
Strengthening and Supporting the Regulatory and Professional Bodies ........................... 28

5.3
5.3.1
5.3.2
5.3.3

Develop and Strengthen Local Capacity for Effective Participation..................... 28


Supporting UNABCEC ................................................................................................ 29
Supporting UACE ...................................................................................................... 29
Supporting other Business Associations....................................................................... 29

5.4
5.4.1
5.4.2
5.4.3
5.4.4
5.4.5

Increase Access to Equipment, Credit and Work ................................................. 29


Facilitating Establishment of a Plant Hire Pool .............................................................. 29
Reviewing of Tender Conditions ................................................................................. 29
Establishing a Construction Guarantee Fund ................................................................ 30
Contracting Work to Local Firms ................................................................................ 30
Ensuring Mandatory Sub-contracting .......................................................................... 30

5.5
5.5.1
5.5.4

Promote Use of New and Appropriate Technology .............................................. 30


Promoting use of Labour-based Technology ................................................................ 31
Undertaking Research in New Technologies................................................................. 31

5.6
5.6.1
5.6.2

Remove Restrictive Practices to Participation of Marginalised Groups ............... 31


Integrating Issues of the Marginalised Groups ............................................................. 31
Incorporating Needs of the Marginalised Groups in Design and Execution of Works ......... 31

5.7
5.7.1
5.7.2
5.7.3

Promote Sustainable Economic and Social Development .................................... 32


Protecting the Environment ....................................................................................... 32
Promoting Occupational Health and Safety at Work ...................................................... 32
Providing Security to Service Providers in Insecure Areas .............................................. 32

6.0

PLAN OF ACTION ................................................................................................................... 33

6.1
6.1.1

Strengthening of Public and Private Sector ......................................................... 33


Training and Capacity Building of Government Staff ..................................................... 33

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6.1.2
6.1.3

Supporting Training Centres and Institutions of Higher Learning .................................... 34


Improving Implementation of Works and Service Delivery Mechanisms .......................... 35

6.2
6.2.1
6.2.2

Regulation of the Construction Industry ............................................................. 35


Regulating the Construction Industry .......................................................................... 35
Supporting the Regulatory and Professional Bodies ...................................................... 36

6.3
6.3.1
6.3.2
6.3.3

Strengthening Participation of the Local Entities ................................................ 37


Strengthening the Contractors Association (UNABCEC) ................................................ 37
Supporting the UACE ............................................................................................... 38
Supporting Other Business Associations ..................................................................... 38

6.4
6.4.1
6.4.2
6.4.3
6.4.4
6.4.5

Facilitating Access to Equipment, Credit and Work ............................................. 39


Establishment of a Plant Hire Pool ............................................................................. 39
Reviewing of Tender Conditions ................................................................................ 39
Establishing a Construction Guarantee Fund ................................................................ 40
Increasingly Contract out Work to Local Firms ............................................................. 40
Mandatory Sub-contracting ....................................................................................... 40

6.5
6.5.1
6.5.2

Application of Labour-Based and New Technologies ........................................... 41


Application of labour-based Technology ...................................................................... 41
Application of Research in new Technologies ............................................................... 42

6.6
6.6.1
6.6.2

Increasing Participation of Marginalised Groups ................................................. 42


Integration of Concerns of Marginalised Groups in Policies and Plans ............................. 42
Integrating Needs of Marginalised Groups in Design and Execution of Works .................. 43

6.7
6.7.1
6.7.2
6.7.3

Supporting Sustainable Economic and Social Development ................................ 43


Protecting the Environment ....................................................................................... 43
Promoting Occupational Health and Safety at Work ...................................................... 44
Providing Security to Service Providers in Insecure Areas .............................................. 44

7.0

IMPLEMENTATION STRATEGY AND FINANCIAL SUPPORT ................... 45

7.1
7.2
7.2.1
7.2.2
7.2.3
7.2.4
7.2.5
7.2.6
7.2.7
7.2.8
7.2.9

Implementation Strategy ..................................................................................... 45


Financing Plan ...................................................................................................... 46
Review of Government Policies and Implementation of Strategies .................................. 47
Training of Client Organisations ................................................................................. 47
Establishment and Operationalisation of UCICO ........................................................... 48
Support to Secretariats of Regulatory Bodies ............................................................... 48
Strengthening of UNABCEC, UACE and other Organisations ........................................... 48
Facilitate establishment of a Construction Levy ............................................................ 49
Strengthen and facilitate Mt. Elgon Labour-based Training Centre.................................. 49
Facilitate research and development ........................................................................... 49
Provide training and sensitisation of stakeholders on cross-cutting issues ....................... 49

7.3
7.3.1
7.3.2

Sources of Funding ............................................................................................... 49


Inputs from the Government ..................................................................................... 49
Inputs from other Sources......................................................................................... 50

8.0

CONCLUSION ........................................................................................................................... 51

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ABBREVIATIONS AND ACRONYMS


ADB

- African Development Bank

ARB

- Architects Registration Board Contractors

DANIDA

- Danish International Development Agency

DFID

- Department for International Development (UK)

DUR

- District and Urban Roads

ERB

- Engineers Registration Board

EURMP

- Eastern Uganda Road Maintenance Programme

FEACO

- Federation of African Consultants

FIDIC

- International Federation of Consulting Engineers

GAMA

- Group of Africa Member Associations (of FIDIC)

GDP

- Gross Domestic Product

GTZ

- Deutsche Gesellschaft Tenchnische Zusammenarbeit

IFAD

- International Fund for Agricultural Development

ILO

- International Labour Organisation

ISU

- Institution of Surveyors of Uganda

JICA

- Japanese International Co-operation Agency

LAPPCOM - Labour-Based Policy Promotion Committee


LCV

- Local Council Five (District Council)

MELTC

- Mount Elgon Labour Based Training Centre

MoWT

- Ministry of Works and Transport

NCI

- National Construction Industry

OHSE

- Occupational Health, Safety and Environment

PPDA

- Public Procurement and Disposal of Public Assets Act

PWTC

- Public Works Training Centre

SRB

- Surveyors Registration Board

SWURMP

- South Western Uganda Road Maintenance Programme

THP

- Third Highway Project

TRP

- Transport Rehabilitation Project

UACE

- Uganda Association of Consulting Engineers

UCICO

- Uganda Construction Industry Commission

UIPE

- Uganda Institution of Professional Engineers

UMI

- Uganda Management Institute

UNABCEC - Uganda National Association of Building and Civil Engineering


UNCFD

- United Nations Capital Development Fund

UNDP

- United Nations Development Programme


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UPK

- Uganda Polytechnic Kyambogo

USA

- Uganda Society of Architects

UTRP

- Uganda Transport Rehabilitation Project

VAT

- Value Added Tax

WTO-GATS - World Trade Organisation- General Agreement on Trade and Services


WURMCBP - Western Uganda Road Maintenance Capacity Building Project

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GLOSSARY
Appropriate Technology: Technology that is most suitable for the environment
and culture it is intended to support.
Construction Industry: An industry that builds physical infrastructure and
comprises the regulators, professionals, contractors, consultants, manufacturers and
suppliers.
Construction: The act of building/constructing something.
Consultant: Any firm, or individual, joint venture or team of firms and/or individuals
engaged to give professional advice or service at a fee, but not as an employee of
the party that engages it, him or her.
Contractor: Any person(s) or firm or entity named in a contract agreement to
execute the works.
Physical infrastructure: A countrys fundamental system of transportation (roads,
rails, water, etc), communication and other aspects of its physical capabilities.
Labour-based Technology: Is defined as the economically efficient employment of
as great a proportion of labour as is technically feasible, to produce as high a
standard of the physical infrastructure as demanded by the specification and allowed
by the funding available.
Policy: Course of action that has been officially chosen and agreed upon by
Government or an organisation.
Strategy: A planned series of actions for achieving something.
Sub-Contractor: Any person(s) or firm or entity named in a contract agreement to
execute part of the works.
Technology: Is knowledge about scientific or industrial methods and their
application, including machinery and equipment developed as a result of this
knowledge.

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EXECUTIVE SUMMARY

Background
The National Construction Industry (NCI), comprising both the building and civil
engineering sectors, performs an indispensable role in the economy of Uganda and in
the region as a whole. It delivers the physical infrastructure that is central to the
countrys economic development. Its activities create business to suppliers,
manufacturers and offer employment to professionals, skilled and unskilled labour. It
transforms private and public plans for capital formation and renewals from paper to
reality.
Over the years Government has increasingly realized that the management of the
countrys physical infrastructure requires collaboration of the public and private
sector. Government is also increasingly divesting itself of direct service delivery in
order to improve the efficiency and effectiveness of public services. It is, therefore, a
duty and an imperative of Government to ensure that there is a well-developed NCI
to implement physical infrastructure projects.
Government evolved this deliberate Policy aimed at restructuring development and
strengthening the NCI. In preparing the Policy, consultations were made locally and
with corresponding government institutions in the United Republic of Tanzania,
Republic of South Africa and the Republic of Sri-Lanka.
Government will promote open dialogue amongst stakeholders in the NCI to ensure
that issues affecting the industry, identified in this Policy, are discussed and resolved.
Purpose of the Policy
The Policy aims to improve coordination, regulation and development of the
construction industry. It further aims to put in place an effective institutional
framework to address the current weaknesses in the construction industry so that
the private sector can efficiently and effectively participate and perform its crucial
role in development and maintenance of the physical infrastructure.
Policy Objectives and Strategies
The goal of the NCI Policy is to enhance delivery, stability, improved performance,
and growth of the local businesses and professions within an organised and

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continuously improving institutional framework. The Governments strategic objective


is that 80% of all services, in monetary terms, in the national construction industry
are provided by the private sector by June 2015.
In order to effectively address the constraints and deficiencies in the development of
the NCI the policy objectives and strategies are as follows:
a) Harmonising roles and responsibilities of the public and private sectors for

effective management of the national construction industry. Strategies include:


training staff in Government departments to improve performance in their roles;
strengthening public institutions to manage their roles; and improving service
delivery and implementation of works using the private sector.
b) Regulating and coordinating the national construction industry. Strategies include:

Establishing a Uganda Construction Industry Commission (UCICO) to regulate and


coordinate the construction industry; establishing a stable and secure regulatory
framework; and supporting the development and operations of the professional
stakeholders in the national construction industry.
c) Developing and strengthening capacity of local firms for effective participation in

the construction industry. Strategies include: Supporting and strengthening the


contractors and consultants associations and establishing a Construction Levy
managed by UCICO. The Commission will raise and manage funds to support
training centres, institutions and research initiatives in the construction industry.
d) Facilitating local firms in the construction industry to access equipment, credit and

work. Strategies include: reviewing Clauses in the tender documents related to


Advance Payment and Performance Guarantees to make them less stringent and
enable local firms to access up-front financing of projects; contracting of physical
infrastructure maintenance works funded by Government to local firms; and
formulating a Reservation Scheme in line with Procurement and Disposal of Public
Assets Act (PPDA) for physical infrastructure development works and consultancy
services funded by both Government and Development Partners.
e) Promoting new and appropriate types of technologies in construction and

maintenance of physical infrastructure facilities. The number and type of


employment opportunities to be generated will influence the choice of technology
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to be applied. Strategies include: Promoting labour-based technology as the


technology of first choice in construction of roads; and undertaking further
research in the use of new and appropriate technologies for construction and
maintenance of physical infrastructure facilities.
f) Removing restrictive practices to participation of marginalised groups in the

construction industry. Strategies include: ensuring that concerns of the


marginalised groups are explicit and verifiable in the policies, plans, and budgets
of key stakeholders in the construction industry; and concerns of marginalised
groups are adequately addressed in execution of physical infrastructure projects.
g) Ensuring that the national construction industry supports sustainable economic

and social development of the country. Strategies include: ensuring that


environment is protected in the process of planning, design, development and
maintenance of physical infrastructure facilities; ensuring that contractors and
consultants promote occupational health and safety of workers in provision and
maintenance of physical infrastructure facilities; and

ensuring that the

construction industry promotes safety and security of the constructed physical


infrastructure and the providers.
Operationalisation of the Policy
It is estimated that establishment of a functioning construction industry will require
US$ 4.0 million (Ushs 8.0 billion) over a five-year period with effect from FY 2010/11.
The key action areas to be supported in implementing the policy include: reviewing
Government policies and strategies aimed at developing and strengthening the NCI;
facilitating training functions of client organisations, supporting Secretariats of
Regulatory

Bodies

and

Business

Associations,

strengthening

research

and

development and increasing awareness training in cross-cutting issues.


The source of funding will be by both Government and Development Partners.
Government will seek support from Development Partners for financing programmes
and projects arising out of implementation of this Policy. The World Bank, EU, DFID
and Danida have already indicated willingness to finance the component of Capacity
Building of Professional Associations, Business Associations, and MOWT staff.

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Key Benefits of Implementing the Policy


The benefits accruing from implementation of the Policy include: improved regulation
and coordination of stakeholders in the construction industry; improved efficiency in
planning and management of physical infrastructure projects by the Central and
Local Governments; and easy access to finance, construction equipment and work by
the local firms. The other benefits are: increased turnover by local contractors and
consultants resulting into better value-for-money and more retention of profits in the
country; lower cost of works and increased savings on the part of employees
accruing from increased local participation; resulting job multiplier effect on the
medium and long term economic performance; and better quality and safe physical
infrastructure in the country.

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PREAMBLE

Recognising the need to have in place a clear, well-focused and people centred
National Construction Industry Policy;
Appreciating the important role the construction industry plays in the socioeconomic development of Uganda; and
Bearing in mind the commitment of the Government to economic and public sector
reforms for the countrys development;
Now therefore, the Government of Uganda has formulated this National
Construction Industry Policy to support the emergence and establishment of an
effective and sustainable national construction industry. The NCI Policy intends to
promote the growth and development of the construction industry in which both the
public and private sector are informed, conscious and actively involved in decisionmaking on matters that affect them. The Policy is in line with the Constitution,
National Vision 2035, PEAP, and the National Development Policy.

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1.0 INTRODUCTION

Uganda has registered high achievements in all sectors of the economy since 1986,
with a consistent growth of GDP greater than 5% per annum. The economic success
has been achieved through deliberate reforms implemented by the Government, with
the support of international financing institutions and donor agencies. This
performance has resulted into the expansion of the countrys physical infrastructure
in all sectors i.e. transport and communications; housing and buildings; water and
sanitation; energy; health; education; and agriculture.
1.1

Background

The construction industry which comprises which comprises the building, civil
engineering water, sewerage, power, telecommunications and other physical
infrastructure works, plays a significant role in the socio-economic development of
the nation. It directly offers employment to many households. With easy access to
the markets and the farms assured through the provision of the transport physical
infrastructure, agricultural production is stimulated leading to improved welfare of
the population. Through employment offered by new work, rehabilitation and
maintenance, the industry contributes significantly towards the countrys GDP.
In the global context, construction is one of the industries that are of most common
socio-economic and political significance. Its role cuts across the different resource
endowments, social policies and existing levels of development. Its wide range of
outputs often sets the nations political agenda and provides the basis for social and
economic development as well. However, in Uganda it has remained weak, largely
undeveloped and in need of a policy, strategies and actions to promote its
sustainable growth. Development of a strong construction industry will yield the
following main benefits for the country:
a) A skilled work force together with a strengthened public sector for contract

planning, financing, procurement, monitoring and evaluation;


b) Improved quality and efficiency leading to better value for money in private and

public sector construction projects;


___________________________________________________________________________________________________
Development and Strengthening the National Construction Industry

c) Reduced incidence of insolvency and failure to complete work by contractors,

leading to reduced costs to clients;


d) Improved prospects for a greater share of national construction work being

undertaken by local contractors and consultants;


e) Improved work continuity leading to greater employment security;
f) Greater retention of construction profits in the country; and
g) Better quality and safety of physical infrastructure.

1.2 The Vision for the National Construction Industry


Uganda has developed a national strategic vision (Vision 2035) as a basis for national
development over a thirty-five year horizon. Vision 2035 embodies strategic actions
to guide Government policies for both the public and private sector. Based on the
strategic framework of Vision 2035, Government has developed this National
Construction Industry Policy aimed at the investment into, and management of, the
physical infrastructure for sustainable development.
Government of Uganda is increasingly investing into the emergence, establishment,
growth and development of an effective and sustainable national construction
industry, in line with the provisions of the Constitution of Uganda (1995), Vision
2035, Poverty Eradication Action Plan (PEAP), National Development Policy and
Divesture Policy, with the aim of achieving the full and effective participation of the
private

sector

for

the

sustainable

development

of

the

countrys

physical

infrastructure.
The Vision for the National Construction Industry is to have an effective, efficient and
sustainable construction industry in which both the public and private sector are
informed, conscious and actively involved in decision-making on matters that affect
them.
1.3 Policy Context and Justification
The Government is obliged by the Constitution to institute focused macro-economic
policies, strategies and programmes to provide a conducive environment for
investment into the various sectors of the economy, including the construction
industry, and thus promote national development. For the national construction
industry there ought to be adequate numbers of professionals, semi-professionals
___________________________________________________________________________________________________
Development and Strengthening the National Construction Industry

and artisans to execute construction and maintenance work. Measures have to be


taken by Government to ensure that there is adequate construction and maintenance
work for contractors and consultants besides enabling the growth of private
contracting and consulting firms. Finally, Government must put in place a regulatory
framework to monitor and direct the practices of the sector investors, contractors
and consultants.
It is estimated that 50% of non-farm employment is directly or indirectly provided by
the construction industry. It provides the physical infrastructure that is central to the
countrys economic development and its activities create business to suppliers,
manufacturers and offer employment to professionals, semi-skilled and non-skilled
labour. However, the national construction industry is currently affected by problems
including, but not limited to:
a) Lack of work continuity due to inadequate affirmative public policies;
b) Difficulty in accessing finance and credit;
c) Difficulty in accessing bid securities, performance bonds and advance payment

guarantees;
d) Underdeveloped human resource in the public and private sector;
e) Unfavourable conditionality for accessing donor credit;
f) Lack of a database of performance indicators in the industry and
g) Construction of substandard / weak physical structures that later collapse and

cause loss of life and property.


The main objective of this Policy aims at improving regulation and development of
the construction industry thereby addressing the above constraints.
1.4 Policy Development Process
Under the Ten-Year Road Sector Development Programme (RSDP) a Study and
Technical Assistance for the Development of the LCI was identified. Accordingly, in
September 1999, Danida supported a preliminary study on development of the local
construction.

The

study

established

the

necessary

measures

and

made

recommendations to Government on how to strengthen the domestic construction


industry.

___________________________________________________________________________________________________
Development and Strengthening the National Construction Industry

Following the recommendations of the study, a Task Force, comprising senior officers
in the Ministry of Works and Transport was established in October 2000 to prepare a
Policy Framework, Strategies and a comprehensive Action Plan aimed at the
development and strengthening of the LCI.
As a matter of procedure, Government must widely consult the people during policy
formulation process. The Task Force therefore, carried out consultations locally with
key stakeholders which included contractors, consultants, academia, professional
bodies, and line ministries, among others. The Task Force submitted a first draft
Policy document in June 2001 which was discussed internally in the Ministry of Works
and Transport.
As a means of enriching the document, a team of selected members of the Ministry
of Works and Transport and representatives of Uganda National Association of
Building and Civil Engineering Contractors (UNABCEC), Uganda Association of
Consulting Engineers (UACE) and Uganda Institution of Professional Engineers (UIPE)
visited the Republic of South Africa, Tanzania in August 2001 and Sri Lanka in 2003
to share experiences. The three countries were selected for the study tours on
account of their having strong and well-established Construction Industries that were
developed in the past through affirmative and enabling Government policies and
strategies.
A second draft Policy document was prepared and presented at the first national
consultative workshop of key stakeholders held in Kampala on 17 February, 2005. A
Consultant (M/S MBW Consulting Engineers) was engaged to harmonise the report of
the Task Force with other related studies, incorporate comments of the workshop
and come up with a Draft Policy Framework, Strategies and a comprehensive Action
Plan detailing the Technical, Financial, Administrative and Human resource
requirements to support the development and strengthening of the local construction
industry.
The third draft Policy document was prepared and presented at a second
stakeholders workshop held in Kampala on 30 August, 2007. The Task Force
accordingly incorporated comments of the workshop and prepared a final Policy
document which was subsequently submitted for approval in September 2009.

___________________________________________________________________________________________________
Development and Strengthening the National Construction Industry

During consultations, the stakeholders advised Government to:


a) Develop a policy that covers the entire construction industry and not to limit it to

a few sections, groups or disciplines;


b) Harmonise the roles of the public and private sectors in the construction industry;
c) Establish a Commission to regulate the construction industry;
d) Institute mechanisms for timely payments to providers for work done and

services rendered;
e) Facilitate local firms to access credit, secure adequate work and increase

equipment holding; and


f) Set minimum thresholds for work to be sub-contracted to local contractors and

consultants by foreign firms as a means of increasing gainful participation of local


firms in the work that takes place in the construction industry.
Strategies and a plan of action have been incorporated in this Policy after wide and
in-depth consultations with the stakeholders. The persistent demand for a policy by
the stakeholders particularly the associations of contractors and consultants has
resulted into urgency for the Policy.

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2.0 RELATED POLICIES, PROGRAMMES AND PAST


INITIATIVES

Most public works, in the past, used to be executed by Government direct labour
units (force account) situated in districts. Over the years this method proved
inefficient and wasteful, resulting in extensive deterioration of physical infrastructure.
Government has consequently adopted a policy of divesting itself from direct labour
units to increasing use of the private sector with the objective of improving the
effectiveness, efficiency and sustainability of service delivery. The policies,
programmes and past initiatives aimed at growth of the construction industry are
discussed in this chapter.
2.1 Related Policies and Programmes
2.1.1 Poverty Eradication Action Plan
Eradication of poverty is top priority on Governments agenda for national
development. All Government policies are geared towards eradication of poverty and
improvement of the livelihood of its population. The Government Poverty Eradication
Action Plan (PEAP) is the overall planning and budgeting framework which guides
public action in eradicating poverty defined as, low incomes; limited human
development; and powerlessness. PEAP provides the guidance in the identification of
priorities, allocation of resources, as well as the assessment of progress and impacts
of Government development programmes, with respect to poverty reduction.
PEAP is premised on four pillars and priority areas namely: Economic management;
Production, competitiveness and incomes; Security, conflict-resolution and disastermanagement; Good governance; and Human development. The core challenges
therefore, that are identified by PEAP include, enhancing income, reducing inequality,
removal of constraints to agricultural sector, ending insecurity and improvement of
quality of lives of the poor, among others.
Under the Highly Indebted Poor Countries Initiative, the Development Partners have
supported PEAP by writing off substantial interest accruing on loans that Government
has acquired over the years. The funds thus realised are being invested by the
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Government in the districts and urban authorities through a modality known as


Poverty Action Fund (PAF) for physical infrastructure development and maintenance.
2.1.2 Public Service Reform Programme
The mission of the Uganda Public Service Reform Programme is: to develop a Public
Service which delivers timely, high quality and appropriate services at the least cost
to the nation, supports national development and facilitates the growth of a wealth
creating private sector. This mission thus clarifies the direction and provides
performance indicators of the Programme. It also spells out the relationship between
the Public Service and the private sector. The Public Service is obliged to provide a
conducive environment in which the private sector creates wealth for the nation
albeit without compromising efficiency and effectiveness in service delivery.
The role of Public Service is therefore limited to providing only those services which
cannot be performed timely or to an acceptable standard by the private sector such
as strategic planning, setting standards, regulation and monitoring.
2.1.3 Privatisation
In view of the Public Service Reform Programme elaborated above, Privatisation is a
key Government policy since Government has divested itself from non-core activities.
Key activities that Government has retained include policy formulation, strategic
planning, setting standards, regulation, monitoring and evaluation. In the
construction

industry

design,

procurement

of

goods

and

services,

project

management, construction and maintenance are increasingly being contracted to the


private sector. Construction units in Government institutions have been targeted for
phasing out, leaving all public sector construction work to be undertaken by the
private sector.
2.1.4 Decentralization
The Constitution of the Republic of Uganda of 1995 provides for a decentralisation
policy for service delivery. The Local Governments Act 1997 (amended in 2001)
created the various corporate Governments with their own rights, roles and
responsibilities, and can sue or be sued. They are:
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a) Central or National
b) District Local Council (LC V)
c) Municipal Local Council (LCIV)
d) Sub county or Town Council or Division of a City (LC III)

Lower local governments are encouraged to pursue policies and strategies that are
crucial to the fulfilment of national goals. The decentralisation policy favours growth
of local contractors in all parts of the country.
2.1.5 Plan for Modernisation of Agriculture (PMA)
The Plan for Modernisation of Agriculture (PMA) is a policy framework for
operationalising PEAP Pillar 2- enhancing production, competitiveness and incomes.
It aims at eradicating poverty by transforming the livelihoods of subsistence farmers
through seven pillars, among them is supporting physical infrastructure. The
programme was launched for national implementation in mid 2000.
The physical infrastructure development and maintenance leading to improved
accessibility to farmers necessitates the construction industry to take a lead
consistent with the PMA objectives.
2.1.6 Road Sector Development Programme
The Road Sector Development Programme (RSDP) was initially formulated for only
National Roads and agreed with Development Partners in 1996 for the period
covering 1996/97 2005/06 at an estimated cost of US$ 1.5 billion dollars. This
programme was subsequently revised in 2002 to include District, Urban and
Community Access roads and placed on a rolling framework. The RSDP (2001/02
2010/11) has been estimated to cost USD 2.3 billion and will be updated on a rolling
framework every 5 years. The major objectives of this programme are to:
a) provide an efficient, safe and sustainable road network in support of market

integration and poverty reduction;


b) improve the managerial and operational efficiency of road administration; and
c) develop the national construction industry.

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The Programme also addresses environmental protection, HIV/AIDS prevention,


gender mainstreaming, road safety, occupational health and safety as well as
mainstreaming concerns of persons with disabilities (PWD) in road management.
2.1.7 Universal Primary Education and Universal Secondary Education
The Government introduced the Universal Primary Education (UPE) programme in
1996 when the number of children of primary school going age then was about 2
million. This number almost doubled a year later and in 1998 the Government
produced the Education Strategic Investment Plan (ESIP) that elaborates policy and
strategies for development of the sector. One of ESIPs priorities is the achievement
of quality UPE by 2005 while the Medium Term Budget Framework (Feb 1999)
estimated that to accommodate the countrys 6 million primary school pupils, over
28,000 new classrooms needed to be built and another 12,000 classrooms needed to
be completed. At the same time ESIP targets provision of water supply systems and
construction of sanitation facilities for all schools.
2.1.8 District Health Services Project (DHSP)
DHSP has enabled Government to deliver health services to the communities through
improved access provided at the new sub-district health centres and at the
rehabilitated Government hospitals. Physical construction works characterised this
project with the participation of a sizeable number of local contractors.
2.1.9 Water Sector Reform Programme
The objective for the rural water and sanitation sector reform has been spelt out by
Government as:
To ensure that services are provided and managed with increased performance and
cost-effectiveness and to decrease the Governments burden while maintaining the
Governments commitment to equitable and sustainable domestic water provision
and sanitation services in the rural areas.
In 1999 Government launched the Water Sector Reform Programme to identify and
address barriers to the delivery of water and sanitation facilities in the rural and
urban settings on target dates agreed in past international fora. The outcome was an
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investment plan for each of the rural districts and rural growth centres; and the
urban and peri-urban areas respectively. The investment plan, to be implemented in
a 15 year horizon effective from FY 2000/2001 complete with the financial and
physical resources required together with the proposed institutional and human
resource development plans, is being supported by the Development Partners.
Foreign contractors are involved in the construction of boreholes and pump
installation, construction of sanitary facilities in public institutions, water pipeline
network laying and bulk storage construction. The local contactors are mainly
engaged in construction of water point sources, production of sanplats and as sub
contractors and suppliers.
2.2 Past Initiatives
2.2.1 National Roads Development and Maintenance
Since 1988 to-date Government, supported by the World Bank, German Government,
British Government and European Union, DANIDA, African Development Bank, JICA,
IFAD and ILO has undertaken a number of projects on the national roads that has
had sub-components specifically targeting the local contractors in the road sector.
Implementation of the road projects has contributed to achievements in development
of the national construction industry.
However, because the NCI was so much retarded in the 1980s and early 1990s the
impact has so far been limited and only felt in the following areas:
a) Training of Contractors through both class room and on-the-job programmes;
b) Availing of contract jobs albeit on an irregular basis;
c) Introduction of relatively quicker payment mechanisms;
d) Promotion of labour based contracting;
e) Equipping of contractors through more manageable plant hire arrangements by

the public sector;


f) Great improvement to the supervision capacity of contracted works by the

Ministrys supervision staff;


g) Emerging of over 50 (fifty) committed contractors; and
h) Increased recognition of, and interest in, the national construction industry by the

financing institutions and insurance companies.


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10

2.2.2 Establishment of Fixed Unit Rates


In 1994, Government adopted a strategy to phase out force account operations for
maintenance of national roads, in favour of contracting. However, at the time the
few contractors that existed were ill equipped and lacked the capacity to
competitively obtain jobs. The Government therefore came up with the Fixed Unit
Rates (FUR) contracting Programme that became effective from that year. The
programme had the following attributes:
a) Government assumed greater responsibility for contract administration and

project management rather than contract implementation;


b) Eligible contractors were registered in four different classes A, B, C and D

according to their capacity to perform;


c) The Ministry determined the ruling market unit rates of the different road

maintenance activities (e.g. grading, drainage repairs etc);


d) Selected contractors from the register were trained and offered work at the fixed

unit rates;
e) As an affirmative action, Government allowed contractors to hire idle equipment

from MOWT and district councils; and


f) Contractor training under the Western Uganda Road Maintenance Capacity

Building Programme in the districts of Bundibugyo, Kabarole, Mubende, Hoima,


and Masindi.
2.2.3 Proposed Establishment of a Plant Hire Pool
One of the biggest issues within the industry in general and in the road sector in
particular is the lack of access to equipment. In 1994 Government commissioned a
study to determine the feasibility of establishing a Plant Hire Pool as a way of
supporting the industry initially starting with road construction and maintenance and
later to support the entire industry. The main target as a source of equipment was
the numerous pieces of Government road equipment, which were already in the
country but evidently under-utilised for various reasons. The study concluded that a
Plant Hire Pool run on commercial principles was viable.

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11

2.2.4 Contractor Capacity Building under District Roads


Both contracting and direct labour operations have been used in rehabilitation and
maintenance of district, urban and community access roads. All routine maintenance
activities are now executed through small-scale contractors and petty labour-based
contractors. Rehabilitation and periodic maintenance activities have largely been
carried out under heavy equipment and direct labour operations because of
inadequate labour and machine-based contracting capacity in the districts. Labourbased petty and small-scale contractors have carried out routine maintenance
operations on district roads.
Since 1990, Government has carried out a number of training programmes both onthe-job and at training institutions. The training delivered on-site benefited a number
of selected contractors especially the petty contractors in the area of labour based
methods of road maintenance. The formal training has been conducted at the Public
Works Training Centre, Kyambogo, Mt. Elgon Labour-Based Training Centre (MELTC)
in Mbale, Makerere University, Uganda Polytechnic Kyambogo (UPK), Uganda
Management Institute (UMI), Bugembe Mechanical Workshop, Kisii Training Centre
(Kenya) and overseas institutions. The trainees have consisted of headquarter staff
and district personnel, politicians and lower cadre district staff. Skills and awareness
have been imparted resulting in improvements in the implementation of the
maintenance programmes. Training was provided by the following projects:
a) UNDP/UNCDF/ILO in Mbarara, Masaka, Rakai, Bushenyi, Rukungiri and Kabale

districts;
b) GTZ, targeting the districts of Kabarole, Bundibugyo, Kasese and Hoima;
c) JICA I-III in the districts of Jinja, Iganga and Kamuli;
d) DANIDA Road Sector Programme Support (1998-2002) in the districts of Lira,

Apac, Kitgum, Gulu, Moroto and Kotido;


e) IFAD/Belgian Survival Fund Project in the districts of Hoima and Kibaale;
f) DANIDA support to Labour-Based Policy Promotion (LAPPCOM) Initiatives; and
g) ADB Rural Feeder Roads Project covering 27 districts.

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12

2.2.5 Uganda National Association of Building and Civil Engineering Contractors


In the early 1990s prominent contractors at the time were invited for a series of
discussions which resulted into the revival of the Uganda National Association of
Building and Civil Engineering Contractors (UNABCEC) which had ceased to function
in 1973. All contractors were encouraged to join and subscribe through membership
fees, periodic and annual general meetings. To-date the Associations is slowly
increasing its membership due to shortage of operational resources.
2.2.6 Housing Sector
In the past 30 to 40 years, the country has undergone very sharp fluctuations in the
housing construction sector. The period was characterised by a vibrant economy in
1960s at attaining independence, followed by a sharp decline during the military rule
in the early 1970s. When peace was restored in 1986, marginal attention was initially
accorded to construction generally including housing, in favour of resettling displaced
communities. Global inflation caused agriculture to take priority so as to stimulate
production. Alongside other essential services i.e. health and security, the road
sector was also given prominence to enable access to the farmers and the marketing
of agricultural produce. The result was that the housing sector continued to be
distressed for some time before it started to recover at a slow pace. In 1990, the
Government recognised the need to support and guide the development of the
housing sector starting with establishing the size of the sector, assessing needs for
stimulating the growth of the sector, undertaking an inventory of all active
contractors, and identifying their capabilities.

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Development and Strengthening the National Construction Industry

13

3.0 INSTITUTIONAL FRAMEWORK

Physical infrastructures such as roads, railways, the built environment, water sources
and supply systems, dams, power transmission lines, and telecommunications that
are constructed and maintained by the construction industry play a crucial role in the
social and economic development of the country. They facilitate the movement of
passengers and goods, communication between distant places, provide shelter and
accommodation at work places, homes and manufacturing facilities among others.
The key stakeholders in the national construction industry are the Government,
Donors,

private

investors,

consultants

and

contractors.

The

core

support

organisations form the tripartite arrangement comprising client, contractor and


consultant. In addition there are other organisations that support the industry to
develop and improve productivity. They include the learned professional societies,
regulatory bodies, business development organisations, commercial banks, insurance
companies, universities, trade unions, education & training organisations and
equipment & materials suppliers.
3.1 Government Ministries, Authorities and Agencies
3.1.1 Government Ministries
The Government ministries that play a central role in the national construction
industry include:
a) Ministry of Works and Transport;
b) Ministry of Finance, Planning and Economic Development;
c) Ministry of Water and Environment;
d) Ministry of Lands, Housing and Urban Development;
e) Ministry of Health;
f) Ministry of Education and Sports;
g) Ministry of Local Government;
h) Ministry of Defence;
i)

Ministry of Energy and Mineral Development;

j) Ministry of Agriculture, Animal Industry and Fisheries;


k) Ministry of Tourism, Trade and Industry;
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14

l)

Ministry of Gender, Labour and Social Development;

m) Ministry of Internal Affairs; and


n) Ministry of Justice and Constitutional affairs

The key role of the above Ministries in relation to the construction industry is policy
formulation, strategic planning, setting standards, monitoring and evaluation.
Physical infrastructure development and maintenance works is executed by
contractors and supervised by consultants. Contractors and service providers are
procured by the respective ministries on a competitive basis to undertake the works.
Justice, law and order plays a central role in the construction industry by ensuring
safety of the constructed physical infrastructure and security of people who construct
the works and those that use them particularly those in the conflict infested areas of
the country. The rights of the people, peace, law and order during construction of
works are ensured by the sector.
The conflicts between parties that arise in the construction industry are handled
through arbitration or appropriate courts of law which restore thereby improving
contract management in the construction industry.
3.1.2 Public Procurement and Disposal of Public Assets Authority
The Public Procurement and Disposal of Public Assets Act, 2003 established the
Public Procurement and Disposal of Public Assets Authority. The Authority formulates
policies and regulates practices in respect of public procurement and disposal
activities and other connected matters.
The objectives of the authority are to:
a) ensure the application of fair, competitive, transparent, non-discriminatory and

value for money procurement and disposal standards and practices;


b) harmonise the procurement and disposal policies, systems and practices of

Central Government, Local Governments and statutory bodies;


c) set standards for the public procurement and disposal systems in the country;
d) monitor compliance of procuring and disposing entities; and
e) build procurement and disposal capacity in the country.
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15

3.1.3 Uganda National Roads Authority


The Act which established the Uganda National Road Authority (UNRA) became
effective in January, 2007.

The core function of UNRA is management of the

national roads i.e. both maintenance and development. UNRA is expected to improve
efficiency and effectiveness in management of national roads. It will also provide
technical advice and assistance to Central Government and Local Governments.
3.1.4 Other Agencies
The Agencies and other institutions include National Housing and Construction
Corporation, Uganda Clays Ltd, Housing Finance Company of Uganda, National Social
Security Fund and National Water and Sewerage Corporation, UNRA, NEMA, CAA.
3.2 Business Development Organisations
Currently there are only three business development organisations among the
professions in the construction industry: Uganda Association of Consulting Engineers
(UACE), Federation of Uganda Consultants (FUCO), and Uganda National Association
of Building and Civil Engineering Contractors (UNABCEC). These organisations are
further described below.
3.2.1 Uganda Association of Consulting Engineers
UACE was set up in 1994 by a steering committee of seven consulting companies
and was subsequently officially recognised by Government as the sole organisation
responsible for the promotion of interests of consulting engineers in the country. It is
affiliated to the International Federation of Consulting Engineers (FIDIC). Its
membership stands at 20 out of about 50 albeit small size consulting firms,
companies and individuals. The most likely reason that the majority are not members
is the relatively high annual membership fees of US$800 for small firms and US$1200
for large firms.
The organisation runs seminars and lunchtime meetings with guest speakers
covering topics of interest to its members; networks with other national associations
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16

of consulting engineers in Africa and worldwide; and lobbies Government,


international lending agencies, donors, FIDIC, and the private sector on matters
affecting them. While these approaches are laudable, it is necessary to develop the
consulting profession in Uganda. It is therefore the obligation of Government to put
in place policies and strategies aimed at supporting smaller consulting firms in order
that they can grow to become members and receive support from UACE.
3.2.2 Federation of Uganda Consultants
FUCO is an umbrella organisation of consultants and consulting organisations in
Uganda. It is registered as a limited company and operates through an executive
committee. It was set up to lobby the International Lending /Financing Institutions,
and the public and private sector on behalf of the members.
3.2.3 Uganda National Association of Building and Civil Engineering Contractors
UNABCEC is a voluntary association of companies bound by a constitution and
directives authorised by the National Executive Committee. It was revived in 1993 to
identify, promote and safeguard the interests of building and civil engineering
contractors. The organisation has a wide range of services that it wishes to provide
but a shortage of operational resources is a barrier with many potential member
companies operating outside the association.
To-date the Association has attracted only a small proportion of contractors. Its
membership of only 300 against an estimated 800 contractors in the country implies
it needs strengthening. Relatively high annual membership subscription charges and
a lack of direct tangible benefits may have discouraged potential members from
joining. Secondly, stiff competition for the few available contracts at a given time
makes the Association ineffective as the sector is perceived as too insecure and
many contractors find themselves falling out of business. The organisation therefore
needs support in order to attract more contractors to the membership.
As one of its major functions UNABCEC lobbies Government on policy issues
impacting the national construction industry and advocates for capacity building
support from Development Partners and the Government. NORAD support, with the
assistance of Government, has enabled UNABCEC to successfully organise
occupational health and safety training for contractors and manufacturing firms.
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Development and Strengthening the National Construction Industry

17

3.3 Professional Bodies


Professional bodies also known as Learned Societies, take a more regional and global
view of the industry with the aim of advancing knowledge and dissemination of
information in the industry. They typically examine and enrol Engineers, Architects
and Surveyors. They aim to maintain standards, ethics and a high professional
competence among their membership. They also promote interaction with other
bodies in the region
3.3.1 Uganda Institution of Professional Engineers
Uganda Institution of Professional Engineers (UIPE) is the learned society for
engineers, technologists and technicians. It sets membership criteria, mentors, and
elects engineers, technologists and technicians to various professional classes:
student member, graduate member, technician member, technologist member,
honorary member, member, and fellow. UIPE membership stands at nearly 1,000.
UIPE as a professional engineering institution has been the subject of a DFID funded
study by the Institution of Civil Engineers (UK) aimed at increasing its capacity and
raising the professional standards in the country in line with the national goal of
poverty eradication, the issues of globalisation, and the dictates of the World Trade
Organisation (WTO). Globalisation and the need to remove national barriers to
professional services as required under WTOs Global Agreement on Trade and
Services (GATS 2000) will only be successfully addressed by the local professionals
purging themselves of incompetence and inefficiency in their professional outlook
and practices, and meeting internationally agreed standards of competence in order
for them to practice across national boundaries. UIPE shall implement systems and
procedures to meet the requirements of global issues and the consequent domestic
challenges. In order to effectively do so, UIPE will need strengthening.
3.3.2 Uganda Society of Architects (USA)
The Uganda Society of Architects enrols architects according to their professional
competencies following set criteria. USA sets guidelines for enrolment, mentors and

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18

sets examinations. Members are classified as Fellows, Professional Associates,


Technicians and Student members.
3.3.3 Institution of Surveyors of Uganda (ISU)
The Institute of Surveyors of Uganda enrols surveyors very much on the similar
procedures as USA. It classifies practising Surveyors as Fellows, Professional
Associates, Technicians and Student members.
3.3.4 Uganda Institute of Physical Planners (UIPP)
The Uganda Institute of Physical Planners, like the ISU enrols physical planners in
this country for purposes of ensuring that they practise under, and follow, a Code of
Ethics.
3.4 Regulatory Bodies
3.4.1 Engineers Registration Board
The Engineers Registration Act, 1969 (amended 1977) established the Engineers
Registration Board (ERB) to regulate and control Engineers and their activities and
advise Government in relation thereto. The Act requires all practising engineers to be
registered with the ERB.
To-date ERB has only 390 registered engineers yet the total number of practising
engineers in the country is estimated to be 2500. There is clearly a gap in
implementation of the law that enables more than 2000 non-registered engineers to
practice. This undermines the authority, responsibility and functions of both UIPE
and ERB in the engineering profession and reduces the two organisations financial
revenue and the services rendered.
3.4.2 The Architects Registration Board
The Architects Registration Board is responsible for registering qualified members
and disciplining offending members.

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19

3.4.3 The Surveyors Registration Board


The Surveyors Registration Board acts independently of ISU to register qualified
members and to discipline offending members.
3.5 Universities and Technical Colleges
Education and training is provided by various organisations. Makerere University,
Kyambogo University and Nkozi University are the highest-level institutions that offer
courses for engineers leading to enrolment with the UIPE, USA, ISU and professional
accreditation by the statutory registration boards for technical professionals,
architects and surveyors i.e. ERB, ARB and SRB respectively. The following
institutions offer a range of courses to deliver vocational, construction and business
management skills necessary to run a construction business:
a) Uganda Technical Colleges;
b) Public Works Training Centre, Kyambogo;
c) Mt. Elgon Labour-Based Training Centre, Mbale;
d) Uganda Management Institute; and
e) Management Training and Advisory Centre.

Training of construction personnel at all levels from engineers and construction


managers to artisans is one of the primary functions of the support framework. While
all education and training institutions associated with the construction industry
provide education and training in the technical skills of design and construction
techniques there is need to formally incorporate into the curriculum the delivery of
the soft-ware skills of communication, socio-economic issues, contract law, and
entrepreneurship for business creation, and business management.
Universities in the country are in a position to undertake research and development
(R&D) for improved efficiency and productivity in the industry, if they are given the
necessary resources. This R&D is a long term goal as it would require support from
both the Government and the industry itself by way of sponsorship from private firms
in construction.

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Development and Strengthening the National Construction Industry

20

4.0 KEY ISSUES IN THE NATIONAL


CONSTRUCTION INDUSTRY

The NCI generally remains fragmented, unsupported due, in part, to lack of both a
definitive Government policy and a strong institutional framework. This has
increasingly encouraged the informal sector mentality approach to business in the
industry with no long term view on work continuity on the part of local contractors
and consultants. The full potential of employment generation and the accompanying
multiplier effect based on local capacity have thus not been exploited. Consequently,
the national construction industry tends to heavily rely on the services of foreign
contractors and consultants, even for repair and maintenance works that could
otherwise be more economically handled by local players. The implications on the
economy resulting from the capital flight emanating from this arrangement are
considerable.
The development of the construction industry is in line with Government policy of
local capacity building and privatisation. In order to ensure sustainability in service
delivery, Government will continue to strengthen and facilitate local contractors and
consultants up to a point when they can handle work currently being executed by
multi-national firms. However, previous studies and seminars aimed at promoting
NCI growth have identified the core problems discussed in this Chapter.
4.1 Contracting Issues
The following issues and constraints affecting development of the NCI have been
identified during recent studies in Uganda.
4.1.1 Limited Capacity
The majority of big constructions are being executed solely by a few international
firms. Only a small percentage of the local firms are able to compete against, or work
in joint-venture with international firms. Consequently, small firms are unable to
develop their capacity and expand their market share to develop into medium-size or
large-scale companies. The small firms are confined, due to their limited size and

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Development and Strengthening the National Construction Industry

21

resources, to undertaking only small building and occasionally minor civil engineering
works.
Limited management capacity and business acumen within the contracting sector is
exacerbated by the vicious circle of: no experience no job no experience
Restricted access to equipment leads to poor performance and yet equipment
enhances performance and is one of the criteria for registration and classification of
contractors.
4.1.2 Limited Access to Credit
Limited access to credit and loan facilities for short term bridging finance required for
project implementation, and long term capital to cover the cost of business
establishment and growth is a serious barrier to the development of the capacity of
private firms.
4.1.3 Limited Work Continuity
Limited work continuity due to absence of adequate workload offered by the public
sector wipes out any gains the NCI may have registered from occasional contracts.
To ensure increasing effective participation of local entities in the construction
industry, which will facilitate their growth, measures need to be put in place to
continuously generate work for the contractors.
4.2 Consulting Issues
4.2.1 Informal Sector Practices
The number of registered consulting firms or consultants is quite small. The
inference is that there exists in the consultancy industry an informal sector to cope
with the net demand for design and supervision of construction projects. This may
be attributed to practical difficulties faced by the respective registration boards in
enforcing their mandate.

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Development and Strengthening the National Construction Industry

22

4.2.2 Constrictions in Capacity Development


The consultants, like the contractors, are faced with the vicious circle of:
Cant get work cant get experience cant get registered cant get work.
4.3 Institutional and Human Resource Development Issues
4.3.1 Need for Institutional Capacity
The role of Government and local councils in project planning and management,
contract procurement and administration is increasingly becoming more crucial in line
with the increasing departure from force account in favour of private sector
participation at the appropriate technology levels. Therefore, there is need for a welldeveloped institutional capacity within each individual service provider in the public
service domain.
4.3.2 Need for Human Resource Development
The human resource skill in the public sector is not well developed in tandem with
the changing public service delivery culture. Project planning and management, and
contract administration skills need to be developed in order to ensure value for
money.
In addition the number of technical professionals in the country is still low. Other
than the Ministries of Works and Transport and that of Water and Environment which
have good numbers of technical professionals other Ministries which are involved in
supervision construction work lack them.
Most training institutions are unwilling to develop tailor-made courses unless there is
effective demand from both public and private sector although they are equipped
with general management skills.

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Development and Strengthening the National Construction Industry

23

4.4 Registration and Procurement Issues


4.4.1 Registration and Classification Scheme
The classification of contractors and consultants under the current registration
system in Government departments lacks a legal basis. The scheme does not also
differentiate between foreign and local firms to avoid unfair competition for jobs.
Government departments carryout registration and classification of firms using
differing criteria. In addition the criteria are not stringent enough to bar ill-equipped
and inexperienced firms. Even the review periods are different.
4.4.2 Tendering
a) Lowest price the criteria for award of tenders based on lowest price is

associated with the following problems:


i)

under-pricing and failure to execute the work;

ii)

leads to too many claims, which are often cumbersome to evaluate and
agree upon;

iii)

does not allow growth of providers, often leading to insolvency and


bankruptcy; and

iv)

PPDA Regulations do not explicitly state how to avoid under-priced bids.

b) Competition - PPDA Regulations emphasize competition as a principal objective of

public procurement. However, there are cases where there are few providers e.g
construction and maintenance of bitumen roads. This often encourages formation
of cartels among bidders, resulting in high prices. The use of competition is not
practical in emergency situations.
c) Joint Ventures and Mandatory Sub-Contracting - Most of the construction works,

particularly in the road and water sectors, are funded by development partners.
None of our local providers are able to compete in an International Competitive
Bidding and win a bid on their own. The PPDA Regulations needs a section which
compels foreign companies to form joint ventures or associate with local firms or

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Development and Strengthening the National Construction Industry

24

sub-contract a defined percentage of the work or services, for purposes of


improving the participation and development of our local firms.
d) Cost Variations
i)

No cost variations are allowed on maintenance contracts and yet the cost of
some inputs like fuel is erratic.

ii)

The fairest method of assessing cost variation is the use of a Price


Adjustment Formula based on Consumer Price Indices. Capacity to develop
and regularly update these indices is required in UBOS to ensure readily
available and reliable data.

e) Conditionalities for Guarantees


i)

Bid Security and Advance Payment Guarantee too harsh for most providers
due to the current requirement of Bank Guarantees.

ii)

Performance Guarantees Both Bank Guarantees and Insurance Bonds are


allowed. However, there are high chances of failure to recover funds
guaranteed with Insurance Bonds.

f) Conditionalities for Post-Qualification

Conditions for post-qualifications, particularly in ICBs, tend to be very stringent


and can not be met by local providers. These conditions often relate to
Experience, Annual Turnover, Equipment, Personnel, Audited Accounts,
Eligibility etc.

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Development and Strengthening the National Construction Industry

25

5.0 POLICY STATEMENTS

The goal of the National Construction Industry Policy is to enhance delivery, stability,
improved performance, and the growth of the local businesses and professions
within an organised and continuously improving institutional framework. The Policy is
premised on the provisions of the Constitution of Uganda (1995), Vision 2035,
Poverty Eradication Action Plan (PEAP), National Development Policy and Divesture
Policy.
It is Governments strategic objective that 80% of all services, in monetary terms, in
the construction industry be provided by the private sector by June 2014. In order
to address the key issues in the development of the NCI the Government policy
objectives shall be to:
a) Harmonise roles and responsibilities of the public and private sector for effective

NCI management;
b) Regulate activities of the stakeholders and co-ordinate public and private sector

dialogue for the development of the national construction industry;


c) Develop and strengthen local capacity for effective participation in the NCI;
d) Increase access to equipment, credit and work by local contractors and

consultants;
e) Promote use of new and appropriate technologies;
f) Remove Restrictive Practices to Participation of Marginalised Groups; and
g) Ensure that NCI supports sustainable national economic and social development.

5.1 Harmonise Roles and Responsibilities of the Public and Private Sector
Government shall decrease involvement of the public sector in actual service delivery
and

effectively

disengage

from

implementation

of

physical

infrastructure

construction. Strategies for implementation of this policy objective shall include:


5.1.1 Training and Capacity Building
Staff in Government departments that form the support framework for the NCI will
be trained to improve their performance in the roles of, policy formulation, strategic
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Development and Strengthening the National Construction Industry

26

planning, setting standards, monitoring and evaluation, procurement and contract


management.
5.1.2 Strengthening Public Institutions
Government Institutions will be strengthened to manage their roles related to this
policy.
5.1.3 Improving Service Delivery by Private Sector
Government will improve service delivery and implementation of works using the
private sector.
5.2 Regulate and Coordinate the National Construction Industry
Government shall regulate the activities of the stakeholders and co-ordinate public
and private sector dialogue for the development of the national construction
industry. Strategies for implementation of this policy objective shall include:
5.2.1 Establishment of a Uganda Construction Industry Commission
Government shall establish a Uganda Construction Industry Commission (UCICO) by
an Act of Parliament to regulate the construction industry. UCICO shall comprise 9
Board Members drawn from both the public and private sector. Its activities shall be
run on a daily basis by a Secretariat headed by a Chief Executive, ideally a
professional in the construction sector at the level of Executive Director.
The Commission shall be funded from the Consolidated Fund and its main functions
shall be to:
a) Provide leadership, focus and support to the stakeholders in the industry which

will enhance delivery, performance and value for money, profitability and the
industrys long-term survival in the global context;

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Development and Strengthening the National Construction Industry

27

b) Provide a focal point for co-ordination, stimulation and promotion of research and

development, training and advise stakeholders on capacity limitations in the


construction industry;
c) Register and classify local contractors, consultants, suppliers and manufacturers

that qualify to render services in the construction industry;


d) Manage a Construction Guarantee Fund to ease the acquisition of tender and

contract performance securities;


e) Manage a Construction Levy to support programmes and initiatives aimed at

developing the national construction industry;


f) Promote awareness on industry growth and development and disseminate

information on procedures, techniques and methods developed by Government;


and
g) Coordinate the development and periodic review of standards in various sectors

of the construction industry.


5.2.2 Strengthening and Supporting the Regulatory and Professional Bodies
Government shall put in place a stable and secure regulatory framework and support
the development and the operations of the professional stakeholders in the NCI.
Government will give support to Secretariats of the Regulatory Bodies, review their
Statutes for effective regulation of the industry and review professional Ethics and
Code of Conduct for the Learned Societies in the construction industry.
5.3 Develop and Strengthen Local Capacity for Effective Participation
Government shall develop and strengthen the capacity of the local contractors,
consultants, suppliers

and

manufacturers

for effective participation in the

construction industry. Strategies for implementation of this policy objective shall


include:

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Development and Strengthening the National Construction Industry

28

5.3.1 Supporting UNABCEC


Support and strengthen the Uganda National Association of Building and Civil
Engineering Contractors.
5.3.2 Supporting UACE
Support and strengthen the Uganda Association of Consulting Engineers (UACE) to
continue their promotion of the consulting engineers interests in the country and
internationally.
5.3.3 Supporting other Business Associations
Government shall support other business associations that will be formed in the
construction industry during implementation of this Policy.
5.4 Increase Access to Equipment, Credit and Work
Government will facilitate local contractors and consultants to access equipment,
credit and work. Strategies for implementation of this policy objective shall include:
5.4.1 Facilitating Establishment of a Plant Hire Pool
Government will retain core plant and equipment and facilitate the setting up of a
Plant Hire Pool initially comprising of the serviceable plant and equipment currently
owned by Government. The uneconomical plant and equipment will be sold off to the
public. A private investor shall manage the plant hire pool and shall be responsible
for leasing and servicing the equipment. The net revenue from leased equipment will
go directly to the Consolidated Fund.
5.4.2 Reviewing of Tender Conditions
Government will review Clauses in tender documents related to Advance Payment
and Performance Guarantees to make them less stringent. The Clauses will enable
local contractors and consultants to access up-front financing of projects.

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Development and Strengthening the National Construction Industry

29

5.4.3 Establishing a Construction Guarantee Fund


Government will establish a Construction Guarantee Fund, managed by UCICO, to
assist contractors and consultants to obtain bid securities, performance bonds and
advance payment guarantees. The Fund will also support the training centres and
institutions, among others, for training of contractor and consultant personnel.
Contractors and consultants shall be compelled to contribute to the Fund using
Clauses embedded in the tender documents and contract agreements. Government
shall provide Ushs 500 million to start up the Fund.
5.4.4 Contracting Work to Local Firms
Physical infrastructure maintenance works funded by the Government shall be
contracted to local contractors while supervision of such works shall be contracted to
local consultants. Government will work with banks and financing institutions to offer
contractors and consultants a line of credit for start-up costs and advances against
payment certificates so that more work can be accessed by the local firms.
5.4.5 Ensuring Mandatory Sub-contracting
Physical infrastructure development works and consultancy services funded by both
Government and Development Partners, a reservation scheme shall be formulated in
line with Procurement and Disposal of Public Assets Act (PPDA). The Scheme will
provide for a minimum of 20% of the contract sum to be sub-contracted to local
contractors while consultancy services valued at a minimum of 30% of the total fees
and expenses shall be sub-contracted to local consultants;
5.5 Promote Use of New and Appropriate Technology
The construction industry makes use of various types of technologies with machines
and labour as resource inputs. A number of factors influence the choice of
technology for any given construction and society. Some of the factors include
design, site conditions, availability of local materials, availability and motivation of
workers, quality of standards, required speed of construction and the costs of the

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Development and Strengthening the National Construction Industry

30

different

approaches.

The

choice

of

technology

in

physical

infrastructure

development is of crucial importance.


Government will promote use of appropriate types of technologies in construction
and maintenance of physical infrastructure facilities with machines and labour as
resource inputs. The number and type of employment opportunities to be generated
will influence the choice of technology. Strategies for implementation of this policy
objective shall include:
5.5.1 Promoting use of Labour-based Technology
Labour-based technology will be promoted as the first choice of technology in
construction of roads, particularly district and community access roads, bridges,
buildings and water physical infrastructure facilities.
5.5.4 Undertaking Research in New Technologies
Undertake further research in use of new and appropriate technologies and local
materials for construction and maintenance of physical infrastructure facilities.
5.6 Remove Restrictive Practices to Participation of Marginalised Groups
Government shall remove any restrictive practices which prohibit marginalised groups
(women, youths, physically challenged persons, elderly persons, children, etc) from
gainful employment in the construction industry. At the same time child labour in
construction industry shall be prohibited. Strategies for implementation of this policy
objective shall include:
5.6.1 Integrating Issues of the Marginalised Groups
The strategy shall be to ensure that concerns of the marginalised groups are explicit
and verifiable in the policies, plans and budgets of key stakeholders in the
construction industry. The policies, plans and budgets will take cognisance of
concerns of the marginalised groups.
5.6.2 Incorporating Needs of the Marginalised Groups in Design and Execution of
Works
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Development and Strengthening the National Construction Industry

31

Government will ensure that concerns of the marginalised groups are addressed in
the design and execution of physical infrastructure works.
5.7 Promote Sustainable Economic and Social Development
Government shall ensure that the National Construction Industry supports
sustainable national economic and social development. Strategies for implementation
of this policy objective shall include:
5.7.1 Protecting the Environment
Government will ensure that the environment is protected in the process of planning,
design, development and maintenance of physical infrastructure facilities.
5.7.2 Promoting Occupational Health and Safety at Work
Government will ensure contractors and consultants promote occupational health and
safety of workers in provision and maintenance of physical infrastructure facilities.
5.7.3 Providing Security to Service Providers in Insecure Areas
Government will ensure that construction industry promotes safety of the
constructed physical infrastructure and security of the providers.

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Development and Strengthening the National Construction Industry

32

6.0 PLAN OF ACTION

The proposed timeframe for the NCI development strategy is estimated to be 5 years
effective from FY 2009/10. The policy objectives and strategies outlined in the
outgoing sections shall be supported through a number of action plans described in
the following sections.
6.1 Strengthening of Public and Private Sector
Government departments, institutions and private sector will be strengthened to
ensure that their roles and responsibilities are harmonised for effective and efficient
delivery of services in the construction industry. The key actions will include training
of personnel and capacity building of Government departments, supporting training
centres and institutions and improving implementation of works and service delivery
mechanisms.
6.1.1 Training and Capacity Building of Government Staff
Government shall build capacity of the departmental staff to enable them take on the
roles of policy formulation, strategic planning, setting standards, monitoring and
evaluation of the construction industry. The central and local government staff shall
be required to administer contracts effectively and efficiently. This will require the
provision of appropriate training to public servants to enable them improve their
performance at work. In the first year of policy implementation, technical staff from
Government

shall

undergo

training

in

tendering

procedures

and

contract

management with a view to improving the quality of tender and contract


administration.
This shall be realised through the following actions:
a) Supporting and strengthening the training functions of the client organisations;
b) Undertaking an assessment of the client organizations and training needs to

determine their level of understanding of public procurement, contract


administration, contract procedures and contracting practices. Prioritise the
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Development and Strengthening the National Construction Industry

33

training requirements and develop a training plan including a timeframe during


the first year of implementation of this Policy;
c) Undertaking a secondary level of institutional capacity building to develop the

particular skills required by staff involved in administering contracts and


supervising contractors. This phase will highlight the manpower shortfalls,
particularly in contract management. The training will include explaining their new
role and teaching the skills that they will need to undertake to complete tasks
associated with the role;
d) Developing training materials, on-the-job mentoring programmes and highlight

suitable training institutions and locations; and


e) Undertaking general awareness training of the issues for staff through short

workshops or seminars that will be run regionally according to requirements.


Deliver initial short-term training courses to individual staff members. Stand
alone, one off, short courses will not be sufficient, as staff require a further
period to adapt to their new role and to practise before they fully understand the
tasks involved. This will be provided through a mentoring programme where staff
who already have the skills and are more experienced in their revised role are
able to offer advice and information to staff who have only recently been
retrained.
6.1.2 Supporting Training Centres and Institutions of Higher Learning
The measures will be to:
a) Strengthen and equip existing Training Centres and Vocational Training

Institutions, to ensure that they are well staffed, have well designed courses for
managers and artisans and undertake regular review / standardisation of their
curricula. This is to be accomplished in a period of two years after the Policy is
adopted;
b) Divest and grant semi-autonomous status to the existing Training Centres.

Courses conducted at these centres will be paid for by public and private clients
at commercial rates. Institutions of higher learning will be linked to the Training
Centres; and
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Development and Strengthening the National Construction Industry

34

c) Accord special preference in the award of tenders to contractors and consultants

who participate in the training programmes conducted at the Training Centres.


6.1.3 Improving Implementation of Works and Service Delivery Mechanisms
Government measures will be to:
a) Increase contracting out implementation of works and delivery of services to the

private sector from the current level of 70% to 90% by June 2013;
b) Increase skilled manpower at all levels in the construction industry by June 2013;
c) Ensure that local contractors and consultants have the necessary technical and
management capabilities; and
d) Support the emerging consultancy firms and the development of small-scale
contractors.
6.2 Regulation of the Construction Industry
The Ministry in charge of Public Works will be responsible for policy implementation,
oversight on UCICO and the regulatory bodies and for coordination of the line
ministries and other stakeholders. The key actions will include establishment of a
Uganda Construction Industry Commission for effective coordination of key
stakeholders in the construction industry and strengthening of Regulatory Bodies and
Professional Societies for regulating the construction industry.
6.2.1 Regulating the Construction Industry
Government will regulate the stakeholders in the construction industry through the
Uganda Construction Industry Commission (UCICO). UCICO will be legally
established as a regulator of the construction industry. It will be established as a
semi-autonomous and self-accounting body through an Act of Parliament by the FY
2010/11.
The Commission will undertake the following measures:
a) Periodically review strategic issues that are crucial to the development of the

construction industry, develop priorities and establish reform objectives, targets


and appropriate performance indicators in the construction industry;
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Development and Strengthening the National Construction Industry

35

b) Periodically collate information on construction expenditure, monitor construction

costs, propose cost control measures and advise Government on demand and
public sector measures to level spending into the sector in case of elasticity in
demand;
c) Register, classify, monitor and evaluate performance of contractors, consultants,

suppliers and manufacturers rendering services in the construction industry;


d) Periodically assess and advise Government on levels of the construction levy

charged to contractors and consultants and its effective application in meeting


the objectives of this Policy;
e) Periodically develop measures to improve communication among industry

stakeholders to harness the commitment, experience and skills of industry


participants and to share the knowledge and experience in a manner which will
assist them to work together and appreciate each other; and
f) Continuously promote programmes and projects aimed at supporting Small and

Medium Enterprises (SME), enhancing skills in the industry, accessing training,


providing career guidance, promoting best design practices and research and
development.
6.2.2 Supporting the Regulatory and Professional Bodies
Government will give support to the Regulatory and Professional Bodies aimed at
strengthening the regulatory framework and support the development and the
operations of the professional stakeholders in the construction industry. The
measures will be to:
a) Support

the Secretariats of the three Regulatory Bodies i.e. Architects

Registration Board, Engineers Registration Board and Surveyors Registration


Board. The Secretariats will be made full-time and each headed by a Registrar.
Government will increase its financial support (subventions) to the Secretariats to
enable them perform the regulatory function;

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Development and Strengthening the National Construction Industry

36

b) Periodically review, in conjunction with the stakeholders, Statutes setting up the

three regulatory bodies to render them supportive of the objectives of this Policy
and any amendments necessary will be placed before the Legislature for
enactment;
c) Periodically review Professional Ethics and Codes of conduct for members of each

of the learned societies. Governments support to professional or learned societies


in the NCI will mainly accrue from a strengthened regulatory body for each
profession; and
d) Promote Government agencies to participate in the activities of the various

professional bodies, which aim at supporting this Policy or any other policies,
programmes and statutes for the better running of the national construction
industry.
6.3 Strengthening Participation of the Local Entities
Government will institute measures to ensure effective participation of the local
contractors and consultants within the five-year phase 2008/09-2012/13. A database
of local contractors, consultants, manufacturers and suppliers on areas where they
need assistance will be established to ensure their participation. The key actions will
include support to UNABCEC, UACE and other Business Associations.
6.3.1Strengthening the Contractors Association (UNABCEC)
Government will give support to UNABCEC to strengthen it to provide the needed
services to its members and develop its membership base. UNABCEC will as soon as
possible prioritise the activities under its mandate based on members needs. It will
initially deliver a range of core services and then expand as its resources and
demands from the membership increase. Government and donor support will be
provided in the form of technical assistance to deliver the initial core services within
the first three years following the adoption of this Policy.

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Development and Strengthening the National Construction Industry

37

Government measures will be to:


a) Procure short term Technical Assistance in FY2010/11 to assist UNABCEC in the

provision of training of trainers and coordinating the delivery of training to


contractors;
b) Conduct a contractors training needs assessment and develop appropriate

training courses in partnership with the training institutions;


c) Undertake a coordinating role in the provision of training to contractors;
d) Provide assistance for easy access to advisory services; and
e) Provide information relating to work opportunities to its membership through

UCICO.
6.3.2 Supporting the UACE
Government measures will be to:
a) Facilitate capacity building aimed at specific training needs;
b) Provide technical assistance where it is critically needed for the development of

the small and medium enterprises;


c) Facilitate participation and hosting of regional and international fora;
d) Take affirmative strategies and actions to enable its members access consultancy

work in the public sector including packaging projects strategically with the aim of
focusing on the involvement of the local consultants; and
e) Monitor the performance of the consulting engineers on public sector contracts

and, where necessary, requesting UACE for necessary action.


6.3.3 Supporting Other Business Associations
Government measures will be to:
a) Undertake a study of Business Associations in FY2011/12 with a view to

improving performance and encouraging formation of new ones; and


b) Provide support to the emerging Business Associations for capacity building.

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Development and Strengthening the National Construction Industry

38

6.4 Facilitating Access to Equipment, Credit and Work


Government will facilitate local contractors and consultants to access construction
equipment, credit and work. The key actions will include facilitating establishment of
a Plant Hire Pool, reviewing tender documents to make them less stringent,
establishment of a Construction Guarantee Fund, contracting out most of the work to
local contractors and consultants and promoting Joint Ventures.
6.4.1 Establishment of a Plant Hire Pool
Government measures will be to:
a) Update the Plant Hire Pool Study by June 2011; and
b) Operationalise the Plant Hire Pool by 2012.

6.4.2 Reviewing of Tender Conditions


The Government measures will be to:
a)

Allow for raising advance payments to a maximum of 30% for both contractors
and consultants on a case-by-case basis;

b)

Include a Clause on a Construction Procurement Aided Capitalisation Scheme


whereby a percentage of payment for certified works will be paid directly by the
employer to an equipment supplier who will supply agreed pieces of equipment
to the participating contractors;

c)

Institute a preferential and reservation scheme to improve work continuity for


contractors and consultants;

d)

Review requirements for bid securities, advance payment guarantees and


performance bonds to allow contractors and consultants use insurance bonds
on recommendations by UCICO; and

e)

Introduce a Maintenance Guarantee to cover the defects liability period instead


of retaining funds from the certificates.

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Development and Strengthening the National Construction Industry

39

6.4.3 Establishing a Construction Guarantee Fund


Government measures will be to:
a) Establish a Construction Guarantee Fund, managed by UCICO, to assist

contractors and consultants to obtain bid securities, performance bonds and


advance payment guarantees by June 2011;
b) Provide start-up fund of Ushs 500 million per year in FY 2010/11 and FY 2011/12

and
c) Introduce a Clause in contract agreements by June 2010 compelling contractors

and consultants to contribute to the Construction Guarantee Fund from execution


of public works.
6.4.4 Increasingly Contract out Work to Local Firms
Government measures will be to:
a) Reduce gradually direct labour units currently employed by Government to only

10% leaving the 90% of all work funded by Government for the private sector by
June 2013;
b) Increasingly contract out physical infrastructure maintenance works funded by

the Government to local contractors and consultants for execution;


c) Award framework contracts to enable selected contractors build capacity such as

procurement of construction equipment, equipping offices, etc;


d) Packaging work into appropriate projects to enable small-sized contractors and

consultants access work; and


e) Ensure prompt payment to contractors and consultants to improve their cash-flow

and performance.
6.4.5 Mandatory Sub-contracting
Government measures will be to formulate a Reservation Scheme for construction
contracts in line with the Public Procurement and Disposal of Public Assets
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Development and Strengthening the National Construction Industry

40

Regulations. The Scheme will provide for mandatory sub-contracting a minimum of


20% of the contract sum to local contractors and a minimum of 30% of the total
fees and expenses to local consultants.
6.5 Application of Labour-Based and New Technologies
Government will encourage use of appropriate types of technologies in construction
and maintenance of physical infrastructure facilities. The number and type of
employment opportunities to be generated will influence the choice of technology.
The key actions will include application of labour-based technology, setting minimum
percentage of works to be executed by labour-based methods, strengthening the Mt
Elgon Labour-based Training Centre, Mbale, and undertaking research in new
technologies.
6.5.1 Application of labour-based Technology
Government measures will be to:
a) Increase awareness and promote use of labour-based technology through

seminars and workshops. The aim of application of labour-based technology will


be to reduce over-dependency on expensive construction equipment, create
employment for the people including targeting the marginalized sectors of society
and contribute to poverty alleviation through boosting of household incomes;
b) Gradually increase use of labour-based technology targeted at achieving the

following minimum percentage of works technically feasible to be executed by


labour:
Main Roads

- 10%

District and Urban Roads

- 50%

Buildings

- 50%

Other Civil Engineering Works

- 30%

c) Strengthen and facilitate Mt. Elgon Labour-Based Training Centre in Mbale to

conduct courses in labour-based technology so that the minimum values of work


executed in various sectors by labour are achieved;
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Development and Strengthening the National Construction Industry

41

d) Compile and disseminate comprehensive labour-based and new technology

design standards and implementation guidelines; and


e) Develop small scale contractors to implement labour-based road works and build

capacity of officials, consultants and contractors in use of labour-based


technology.
6.5.2 Application of Research in new Technologies
Government measures will be to:
a) Facilitate materials research and testing centres; and
b) Incorporate the research findings of new technologies in the specifications and

standards for design and implementation of physical infrastructure facilities.


6.6 Increasing Participation of Marginalised Groups
Government will continue to advocate for the removal of any practices which prohibit
marginalised groups (women, youths, physically challenged persons, elderly persons,
etc) from gainful employment in the construction industry. At the same time child
labour in construction industry will be prohibited. The key actions will include
integration of concerns of the marginalised groups in planning, development and
maintenance of physical infrastructure facilities.
6.6.1 Integration of Concerns of Marginalised Groups in Policies and Plans
The strategy will be to ensure that concerns of the marginalised groups are explicit
and verifiable in the policies, plans and budgets of key stakeholders in the
construction industry. The policies, plans and budgets will take cognisance of
concerns of the marginalised groups.
Government measures will be to:
a) Regularly review policies, plans, budgets to establish their levels of sensitivity to

the needs of the marginalised groups in the construction industry and identify
gaps that should be addressed;

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Development and Strengthening the National Construction Industry

42

b) Periodically generate disaggregated baseline data upon which policy-makers and

planners will draw to design efficient and effective interventions that will respond
to the needs of the marginalised groups in the construction industry;
c) Disseminate guidelines to stakeholders aimed at achieving fairness in resource

and opportunity distribution, as well as providing an enabling environment where


women and men participate in, and benefit from, developments in the
construction industry in an equitable manner; and
d) Ensure that resources are allocated in a manner that responds to the identified

needs of the marginalised groups.


6.6.2 Integrating Needs of Marginalised Groups in Design and Execution of Works
Government will ensure that concerns of the marginalised groups are addressed in
the design and execution of physical infrastructure works.
Government measures will be to:
a) Incorporate concerns of the marginalised groups in specifications, standards,

manuals, tender documents and guidelines for physical infrastructure works; and
b) Periodically provide training and sensitisation of all stakeholders on issues and

concerns of marginalised groups in implementation of physical infrastructure


facilities.
6.7 Supporting Sustainable Economic and Social Development
Government will ensure that the National Construction Industry supports sustainable
national economic and social development. The key actions will include protecting
the environment, promotion of occupational health and safety of workers, and
provision of security to service providers in insecure areas.
6.7.1 Protecting the Environment
Government measures will be to:
a) Conduct

Environmental and Social Impact Assessments during planning,

development and maintenance of physical infrastructure and ensure that


adequate mitigation measures are provided for; and

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Development and Strengthening the National Construction Industry

43

b) Sensitise stakeholders in the industry on the importance of preserving the

environment and enforce compliance with relevant Government statutes.


6.7.2 Promoting Occupational Health and Safety at Work
Government measures will be to:
a) Ensure that contractors and consultants have comprehensive safety and health

schemes at work places prior to being allowed to participate in physical


infrastructure development and maintenance;
b) Consider only contractors and consultants, during procurement of public works

and services with gender sensitive health schemes which take into account all
people including the marginalised groups such as women and youths. The
maternity and paternity concerns will be given due consideration; and
c) Sensitise contractors, consultants and other stakeholders on the importance of

occupational health and safety of workers in provision and maintenance of


physical infrastructure.
6.7.3 Providing Security to Service Providers in Insecure Areas
Government measures will be to:
a) Ensure that quality and standard of the constructed physical infrastructure

withstand the negative impact of both natural and unforeseen disasters; and
b) Provide security for the contractors and consultants operating in insecure areas of

the country.

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Development and Strengthening the National Construction Industry

44

7.0 IMPLEMENTATION STRATEGY AND


FINANCIAL SUPPORT

7.1

Implementation Strategy

The implementation of the planned actions will be undertaken by the Ministry


responsible of Public Works and Transport in collaboration with Development
Partners, UCICO, line Ministries, professional regulatory bodies for architects,
engineers

and

surveyors,

UNABCEC,

UACE,

training

institutions

and

the

corresponding professional associations and the private sector.


Soon after the Policy is approved and adopted by the Cabinet, specific actions will be
undertaken to prepare for and ensure timely implementation. It is worthy to note
that some strategies are already being implemented by ministries and Government
agencies through their respective mandates and will be strengthened upon approval
of the Policy.
The specific actions to publicize the Policy, mobilize the required resources and
implement the action plan will include:
a) Publicise the Policy widely by producing and distributing copies to stakeholders

and conducting workshops/seminars to highlight key policy statements, strategies


and required actions;
b) Collaborate with MoFPED to identify the required resources for financing and

implementing the plan of action;


c) Lobby widely funding for implementation of the policy; and
d) Carry out bilateral contacts with donors to seek more support to fund projects

and programmes resulting from implementation of this Policy.


Monitoring and evaluation of the plan will be through annual financial and technical
audits and Mid Term Reviews of programmes and projects of Government
departments implementing the policy.

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The key milestones will include:


a) Procure short term Technical Assistance in FY2010/11 to assist UNABCEC in
delivery of services to its members;
b) Establish a Uganda Construction Industry Commission by June 2011;
c) Formulate a Reservation Scheme for mandatory sub-contracting a minimum of
20% of the contract sum to local contractors and a minimum of 30% of the total
fees and expenses to local consultants by July 2011;
d) A database of local contractors, consultants, manufacturers and suppliers
established by June 2012;
e) Undertake a study of Business Associations in FY2011/12 with a view to
improving performance and encouraging formation of new ones; Increase
contracting out implementation of works and delivery of services to the private
sector from the current level of 70% to 90% by June 2013; and
f) Increase skilled manpower at all levels in the construction industry by June 2013;
7.2

Financing Plan

The objective of Government is to establish a functioning construction industry


support framework. The support will total to US$ 4.0 million (Ushs 8.0 billion) over
the five-year period to be funded by Government and Development Partners.
However, Government shall seek more support from Development Partners for
financing programmes and projects arising out of implementation of this Policy.

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The key areas to be supported in implementation of the Policy are summarised in


Table 7.1 below.
Table 7.1: Budget for Implementing the Action Plan (US$ 000)
Item
1
2
3
4

6
7
8
9

Description
Review of Government
Policies and Strategies
Facilitate training functions
of client organisations
Establish UCICO
Support Secretariats of
Regulatory Bodies
Support UNABCEC, UACE
and other business
Associations
Facilitate establishment of a
Construction Levy managed
by UCICO
Strengthen and facilitate
MELTC
Strengthen research and
Development
Awareness training on crosscutting issues

Grand Total
1 US$ = Ushs 2,000

2010/11

2011/12

2012/13

2013/14

2014/15

Total

120

120

240

120

120

120

90

90

540

60

30

90

250

90

90

90

90

610

270

380

120

60

60

890

60

280

180

520

95

100

100

110

110

515

60

90

90

90

90

420

35

35

35

35

35

175

1,070

1,245

735

475

475

4000

7.2.1 Review of Government Policies and Implementation of Strategies


Support to Government departments shall need a total of US$ 0.24 million (Ushs
0.46 billion) for carrying out studies to review and evaluate potential policies that
may assist the development of the national construction industry.
7.2.2 Training of Client Organisations
The support shall ensure that Client Agency staff receive appropriate training in
procurement and contract administration. A training needs review shall be carried out
and training courses developed in association with training organisations. The
existing technical and training centres will be strengthened and equipped to provide
the necessary training and imparting of skills. The support will amount to US$ 0.54
million (Ushs 1.08 billion).
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7.2.3 Establishment and Operationalisation of UCICO


Establishment and operationalisation of UCICO as a Regulator of the industry will
require a total of US$ 0.09 million (Ushs 0.18 billion). The funds will be used for a
study to establish UCICO and start-up funds in the first year of the Policy
implementation.
7.2.4 Support to Secretariats of Regulatory Bodies
Support will be given to the Engineers Registration Board, Architects Registration
Board and Surveyors Registration Board to enable them employ full-time Secretariats
each headed by a Registrar and efficiently perform the regulatory function. A total of
US$ 0.61 million (Ushs 1.22 billion) as Government subventions will be used to
support the Secretariats.
US$ 0.25 million (Ushs 0.50 billion) will be utilised in the first year of implementation
to cater for employment of full-time Registrars and purchase of vehicles for the 3
Secretariats. In the subsequent years a total of US$ 0.09 million (Ushs 0.18 billion)
per year will be used for employment of the Registrars.
7.2.5 Strengthening of UNABCEC, UACE and other Organisations
The support to strengthen UNABCEC, UACE and other organisations shall aim at
enabling them to provide improved assistance and services to contractors in the
country. The financial support will be 0.89 million (Ushs 1.78 billion) over the 5-year
period. The support will enable provision of Technical Assistance in the first 2 years
estimated at US$ 0.26 million (Ushs 0.46 billion) plus annual operational funds of
US$ 0.12 million (Ushs 0.24 billion) for the Associations.
The operational funds for the Associations will be reduced by 50% in the last two
years. It is assumed that the Associations will have built capacity and expanded their
membership to generate adequate funds to run their business.

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7.2.6 Facilitate establishment of a Construction Levy


A total of US$ 0.52 million (Ushs 1.04 billion) in the initial three years will be used for
establishment of a Construction Levy, managed by UCICO. The funds raised under
the levy will be used to support training programmes and research initiatives aimed
at developing the national construction industry.
7.2.7 Strengthen and facilitate Mt. Elgon Labour-based Training Centre
Mt. Elgon Labour-Based Training Centre in Mbale will be strengthened and facilitated
to conduct courses in labour-based technology so that the minimum values of work
executed in various sectors by labour are achieved. The support will amount to US$
0.515 million (Ushs 1.03 billion).
7.2.8 Facilitate research and development
Facilitation of materials research and testing centres and incorporation of the
research findings of new technologies in the specifications and standards for design
and implementation of physical infrastructure facilities will total to US$ 0.42 million
(Ushs 0.84 billion).
7.2.9 Provide training and sensitisation of stakeholders on cross-cutting issues
Key stakeholders will be sensitised on integrating cross-cutting issues and concerns
of the marginalised groups through workshops and seminars. The funding will
amount to US$ 0.175 million (Ushs 0.35 billion).
7.3

Sources of Funding

7.3.1 Inputs from the Government


The Government Department shall meet the salary and recurrent costs of its staff
working on outputs of this Policy. It shall also contribute local counterpart funding for
supporting the action plan.

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7.3.2 Inputs from other Sources


Government will seek support from Development Partners to fund implementation of
the Policy. UNABCEC and UACE are currently funded by membership subscriptions.
This source of funds shall increase as the membership of the organisation increases
and is expected to fund some of the activities of the associations relevant to this
policy.
Government

will

seek

additional

funds

from

Development

Partners

for

implementation of programmes and projects arising out of this Policy. The World
Bank, EU, DFID and Danida have already indicated willingness to finance the
component of Capacity Building of Professional Associations, Business Associations
and MOWT staff.
The funding by World Bank and DFID under the Transport Sector Development
Project is estimated at US$ 1.6 million for Policy and Institutional Reforms for five
years (2010 2015).

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8.0 CONCLUSION

The need to develop and support the national construction industry has for the last
decade been a priority item on the national development agenda. Implementation
this NCI Policy shall greatly contribute to the Governments efforts in addressing the
need for sustainable development based on effective public/private sector
partnership.
The phased implementation of the NCI Policy, strategies and action plans will offer
the Government and all the stakeholders including the Development Partners an
opportunity to participate right from the start in developing, testing, monitoring and
refining a robust institutional framework. However, the success will largely depend
on meaningful cooperation and clear interrelationship amongst the Government,
Development Partners, and the private sector.
Since the Policy is based on development-focus derivatives of the Constitution of
Uganda 1995 as well as on existing policies and strategies that have been well
supported by the Development Partners, the outcomes of a well developed national
construction industry shall positively uphold the national aspirations for the
sustainable development of the country.
The planned eventual elimination of Force Account as a tool for service delivery by
the public sector will effectively lead to a changed role of the public sector from an
implementer to being responsible for policy formulation, setting and monitoring
standards, regulation, public procurement, and project management. Therefore the
client organisations shall identify personnel for training under this Policy, to assume
the responsibilities under the changed roles.
There is a wide scope for donor and Development Partner support to make this NCI
Policy a reality. The reforms that will be introduced in the operationalisation of this
Policy shall need to be supported by the stakeholders including donors and
Development Partners. A total budget of US$ 4.0 million (Ushs 8.0 billion) will be
required for developing and strengthening the NCI in the five-year period following
adoption of this Policy.

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However, further funding shall be required for setting up the physical infrastructure
for the UCICO upon a successful review in the fourth year. Also technical assistance
shall be needed to address the critical areas of training of trainers with respect to
imparting of managerial and technical skills to contractors. Government shall
therefore seek support from Development Partners to fund programmes and projects
resulting from implementation of this Policy.
It is therefore imperative that MOWT will open dialogue with all key actors of the
construction industry and work closely with all donors and other stakeholders in the
development of the national construction industry. The action plans only provide an
operational framework and when need arises, reviews will be undertaken to ensure
success of the stated strategies.
The existence of strong leadership and motivated staff in the business development
bodies, regulatory boards, and professional associations, commitment of Government
ministries to use of local contractors and consultants and positive assistance from all
support organisations to the industry will lead to the ultimate goal of a developed
national construction industry by the year 2015.

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