Africa-Press – Uganda. CONSTRUCTION|BUSINESS
Uganda National Association of Building and Civil Engineering Contractors (UNABCEC), and NCBA Bank have signed a Memorandum of Understanding that will see UNABCEC members receive up to sh500m worth of bid bonds in 24 hours.
A bid bond guarantees compensation to the bond owner if the bidder fails to begin a project. Elizabeth Muhebwa, the UNABCEC Executive Director said that the deal is an effort to support the growth of Uganda’s construction industry.
“This is an important step in the Association’s vision to be the lead engine for growth and development of the construction industry in the region,” Muhebwa said.
“With this MOU, Uganda is stepping up to fill major gaps in the industry that constrain the growth of smaller contractors and impose barriers on their ability to tender for big work packages and thus improve capacity,” she added.
Mark Muyobo, NCBA Bank Uganda Executive Director, Corporate Banking and Structured Solutions said that the partnership is aimed at bolstering the construction industry as part of NCBA’s broader strategy to support the economy through infrastructural development.
He noted that the deal will bolster Small and Medium Enterprises (SME) businesses who get contracts to run big projects but have constrained cash flows due to ever fluctuating economic situations in the business environment.
A Makerere University study, ‘An investigation into the causes of the delays and cost overrun in Uganda’s public sector construction projects’ by the university’s department of Civil Engineering lecturers Ruth Apolot, Henry Alinaitwe and Dan Tindiwensi, attributes the delays in Uganda’s projects to delayed payment to contractors among other things.
