PPDA wants 30 per cent oil contracts for Ugandans

What you need to know:

Reason. This is aimed at promoting local content in the public procurement.

Kampala.

The Public Procurement and Disposal of Public Assets Authority (PPDA) wants the guidelines of at least 30 per cent of the value of works of contracts reserved for local contractors in the lucrative oil industry to boost local capacity.
The acting PPDA executive director, Mr Benson Turamye, told Daily Monitor yesterday that the guidelines of 30 per cent of contract value works being subcontracted to local companies already apply to procurements by government ministries, departments and agencies, but procurement tenders in the oil industry are not necessarily subjected to the same.
“Even when you go international, there should be endeavour to enforce or ensure national involvement to the extent of 30 per cent,” Mr Turamye said at an oil and gas workshop co-convened by the Office of the Auditor General, Inspectorate of Government, Ministry of Energy and Mineral Development, and German development agency (GIZ).

Promote local content
The 30 per cent requirement is contained in the reservation scheme guidelines PPDA rolled out last year in the bid to promote local content in the public procurement and on back drop of the Buy Uganda Build Uganda Policy.
The oil industry, however, does not specifically subscribe to the guidelines.
Ms Peninah Aheebwa, the director of technical services in Petroleum Authority of Uganda (PAU), the oil industry regulator, said currently when procurement tenders are announced, the first call is given to local service providers. Where there are no qualified options, the tenders are given to international contractors.
However, Mr Turamye argued that even under such circumstances when international contractors are given the contracts, there should be a deliberate attempt to enforce them to sub-contract or pair up with local contractors to boost their capacity in the otherwise complex fields.
Ms Aheebwa said: “We are pushing for joint ventures a lot to build our enterprise capacity.”
She said contracts in, among others fields, logistics, clearing and forwarding, supply chain management, catering, light air transportation, security and camp management are ring-fenced for Ugandan service providers, but there are untapped opportunities in other areas such as civil construction, domestic air flights and manufacturing where they could expand to.
Currently, all service providers, both local and foreign, are required to register on the National Suppliers’ Database manned by PAU to be eligible for contracts.
The discussions on local content and capacity in the industry have been amplified in recent months as the country gears up for investments in the zone of $20b (Shs74 trillion) over the next five years from the period 2019/2020.