ANDREW NIWAMANYA: UPDF in construction! Facts, logic and solutions in a crisis

The UPDF engineering brigade has received praise for constructing some government infrastructure at a lower cost than private companies. This is not purely factual.

The biggest cost pushers in our industry are among others
1. Material/ inputs
2. Labor
3. Equipment
4. Capital

UPDF by far would beat any private company because we are not on a levelled ground. Its inputs are tax exempt, its labor is on a regular payroll shouldered by tax payers and most of its equipment is purchased using tax payer’s resources, its capital is interest free thus UPDF has a head start. Every other local firm would beat UPDF given the same conditions. It is not that UPDF is cheap, it is because it is over subsidized. This doesn’t require rocket science to realize that its costs would surpass that of most companies in an open competition.

The office of the auditor general often does value for money audits which have shown consistent improvements irrespective of a few challenges like poor quality in puts. These reports inform PPDA and IGG to streamline our industry. Every year PPDA suspends unscrupulous firms. With UPDF clandestine expenditures, I am yet to tell how it will be audited.

His excellency emphasized delays in public procurement and corruption. Is UPDF immune to corruption? Big NO. On a quick google search, observer 29 2020, 2 charged over fuel theft of 32Bn from total, stealing food in Somalia (daily monitor august 3, 2016), extortion by its personnel, impersonation is all awash in media.

His excellency, the reason your government is terrible at doing competitive business is because there is no reward for innovation yet the consequences of failure are high hence people concentrate on laws than actual work. A well-deserved 6Bn handshake to URA caused a storm thus should remind us of such. The cost of compliance in Government is what drives costs high. If a road to be completed in 2 years takes an extra one to be completed because of the government bureaucracy, all designed to reduce corruption, then you won’t expect such a road to be cheap.

UTL and UBC, whose workers receive fat budgets and good payrolls don’t match even new entities because it’s not governments expertise to do business but policy so that cost of cost pushers are lowered. Unfortunately, tax payers always shoulder the mistakes and incompetence of such entities instead of transferring the risk to private players.

I propose the following feasible solutions to address your reservations;
1 Issue a directive to fast track automation of government procurement with deadlines. PPDA has released a circular that it will transfer our data to the new system on 15th July 2021. This can eliminate delays and corruption since the system can be made with strict implementing deadlines.

2 Capitalize UDB with a construction fund for growth of the industry employing thousands of Ugandans. The agricultural fund has made us a country of surplus. Construction industry will be a major export in the region if well-developed than suffocation.

3 Provide federal guarantees to reduce the procurement costs and give local companies a muscle to compete with international players.

4 Empower the office of auditor general and IGG to do timely audits and intervention.

5 Engage stake holders with knowledge of the industry like UIPE, ERB, UACE and UNABSCEC

6 Streamline investment policies and encourage fair taxation. It’s better to heal the sick than try to resurrect the dead.

7 Reserve and build capacity for UPDF to do work being done by foreign companies instead of fighting with our wanainchi companies. As a pan Africanist and in the spirit of East African community, it will be reprehensible to ring fence a government body in such a growing and promising industry.
The men who built America were individuals with innovation not government bodies shielded from competition and its economy is still by far driven by Silicon Valley companies. NASA and CIA still uses private contractors for efficiency.

Mr. President, failure to reverse this decision will kill the construction industry in Uganda. The economy will continue to be foreign-led, and the State of Uganda will continue to serve the interests of this foreign capital.

For God and My country. I SERVE