Chinese firms lower road construction rates

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Construction of the Entebbe Express Highway

Construction of the Entebbe Express Highway. UNRA says the works are on track. The highway is designed to ease the amount of traffic that is synonymous with Entebbe and Masaka roads. PHOTO BY faiswal kasirye  

By Richard Wanambwa

Posted  Monday, August 11   2014 at  11:00

In Summary

Clearing the air. Chinese construction companies have out-competed firms from Europe and America in getting tenders to construct roads in the country, causing worry among stakeholders on the future

The entry of Chinese firms into road construction in Uganda has seen the billing rates per kilometer brought down as compared to the past when the work was dominated by European and American firms.

According Uganda National Roads Authority (UNRA) head of Corporate Affairs, Mr Dan Alinange, four years ago the agency would spend $1.2m (Shs3.1billion) on a kilometer but this has now dropped to about $800,000 (Shs2.1 billion), following the entry of several Chinese firms in the construction sector.

“We advertise our tenders internationally and receive responses from all over the world. Many of the Chinese companies are technically competent and financially cheaper,” said Mr Alinange in an interview over the weekend.

There have been reports that government agencies like UNRA favour Chinese firms over local and other international firms yet their quality of work is wanting at times.

“The Chinese firms are competent and do work of similar quality like the Europeans and Americans,” said Mr Alinange. “The people bad-mouthing Chinese firms are just finding it hard to compete with them.”
He added: “Our only fear is that these prices will escalate after the Chinese have kicked out all the other competitors. We have to find a way of keeping other competitors around.”

However, the dean of School of Engineering at Makerere University, Eng Umaru Bagampadde, said despite government favouring Chinese firms, their quality of work does not compare with counterparts from Europe and America.

He said Chinese firms are only interested in dominating the market but the reality is that they do not make profits out of these contracts.
“Most of these Chinese firms are owned by government of China and they are assisted by Chinese banks which give them money and time.

They want to establish local dominance and after that they will hike their prices. They only care about breaking even now, not making profits,” said Mr Bagampadde.

The Soroti Municipality MP, Capt. Mike Mukula, who has interests in construction, said Chinese firms have formed a cartel and are now difficult to defeat.

“They are cheaper and everything is shipped from China and this gives them advantage over other firms that depend on bank loans to buy equipment,” Capt Mukula said.

‘UNRA projects on track and corrupt-free’

The Daily Monitor caught up with Mr Dan Alinange, the head of corporate affairs at UNRA one of the government departments that are allocated large sums of money on reports of fraud and corruption surfacing among leading taxpayers to question how these funds are utilised.

UNRA head of corporate affairs Dan Alinange
UNRA head of corporate affairs Dan Alinange. FILE PHOTO

What are the criteria employed in picking which road to construct?
The public needs to know that before a road is selected for upgrading, studies are carried out to assess the social, economic and environmental viability of the project.

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