Gov't Moots Contractor Facilitated Financing for Infrastructure Projects

The amendment of the procurement law will ensure efficiency in procurement through contractor facilitated financing.

This is contained in the Public Procurement and Disposal of Public Assets Amendment bill 2019. 

The amendment seeks to introduce regulations on pre-financing, where an investor or contractors use their money then it is paid overtime in form of a loan by Government. 

It also introduces the design-builder contractor concept where the design and construction services are contracted by a single entity hence saving funds and time.

The bill also seeks to reduce the statutory timelines for bidding evaluation as well as display period with exception of complex procurement, reduce stakeholders in the procurement circle and also provide for electronic Government procurement.  Others are early involvement of procurement professionals in the profession.  

According to the Minister of Finance in-charge Planning, David Bahati who introduced the bill on before the finance committee, several investors have approached Government seeking to invest in Uganda then get paid later, but this has been slowed down by the absence of loans. 

He says that the current PPDA system is inefficient and has resulted to delays amounting to 12 to 24 months of projects which gets so expensive for Government.

He cited an example of the Karuma Hydro Power Project. He says statistics from PPDA indicate that the average procurement lead time is above the statutory timelines by 50%. 

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The bill also seeks to enhance the export credit system which is a guarantee or financing arrangement which allows a foreign buyer of exported goods and/or services to defer payment over a period of time.   

It also proposes that the Secretary of Treasury will issue guidelines on how two or more entities can use collaborative arrangement to acquire a specific product service or works.   

The Chairperson of the Finance Committee Henry Musasizi says the layers in administrative reviews will be reduced, but also a proposal to promote Ugandan products through sub-contracting.

The proposal also prioritizes special interest groups like youths and women in procurement. He says pre-financing is a good move for Government as it is one of the ways to raise revenue.

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Musasizi, however, questioned why Government plans to give powers to the Secretary and yet the regulator already exists.