President Museveni recently “decreed” that the army/UPDF would take over construction in the education and health sectors because of corruption by public officials.
It is disingenuous for the president to use corruption as the excuse for this move. The UPDF is equally corrupt (Kaweweta, Eria Mubiru and J2E Investment 76B scam/NAADS/OWC etc). The issue though is once the disease is diagnosed shouldn’t the disease be treated! We all know there is NO political will to fight corruption.
Uganda National Roads Authority (UNRA) has issued a statement that the UPDF through their “commercial arm” National Enterprise Corporation (NEC) is to take up road construction in line with the directive.
Museveni's directive clearly did not include the roads sector. What this shows is that this is a clearly orchestrated move! NEC being a commercial arm of government is required to compete like any other commercial enterprise. This sets a bad precedent!
Next will be a government move that ALL printing services be provided by UPPC or New Vision! Or that it will only pay suppliers who bank in government owned banks (HFB/Post Bank)!
Where does that leave the private sector? Economies are developed by the private sector. Privatisation was driven by the fact that the government had no business doing business and they were bad at it.
Legally this cannot work. UNRA relies on reservation schemes to justify this move. The Public Procurement and Disposal of Public Assets (PPDA) Act provides that the Authority consults with a competent authority/relevant stakeholders, the public procurement contracts to be subject to a reservation scheme should be specified, and SHALL designate the particular sectors within a specified geographical area that are eligible to participate in the reservation scheme.
It goes on to list the reason for reservation schemes to wit promote the use of local expertise/materials, participation of local communities/local organisations/SMEs/business ventures, apply specific technologies, and promote registered associations women/youth/PWDs. Reservation schemes are intended to provide space for disadvantaged groups!
The PPDA Act also clearly states that defence and national security organs shall comply with the Act. NEC as the UPDF’s commercial arm is therefore expected to follow the Act.
In the event that they would like to utilise their resources force account mechanisms would be ideal. Force account mechanisms work when undertaking works of a PDE using personnel and equipment of the PDE or of another PDE.
Supplies should be procured in accordance with the Act, overhead costs would be less than a contractor would have charged. The accounting officer is required to make available, materials, employees, tools and equipment, adequate for the works.
The overhead costs envisaged are those incidental to mobilising other contractors relative to the costs of the construction. It, therefore, begs the question - how has UNRA arrived at the savings purportedly expected? NEC would be using its personnel and equipment.
UNRA’s statement indicates they will provide experts “in a deliberate up skilling initiative” clearly NEC isn’t bringing expertise as the president purports!
If the UPDF are so skilled perhaps they should divert their energies to building respectable accommodation for the personnel in the armed forces.
I believe this “decree” is misguided and unlawful. The economy cannot recover from the shocks of the pandemic if the government chooses to sideline the private sector. It contravenes the WTO multilateral trading rules and the EAC Treaty to mention a few.
Consideration has to be had to rules of development aid partners who have heavily funded the construction industry. The construction industry should rally together and fight this with ALL they have got! The private sector will do well NOT to sit this out! You are going to be blown to smithereens! Your survival depends on it!
The author is a public procurement specialist with 12 years’ experience as an advocate in the Attorney General’s Chambers/ ministry of Justice & Constitutional Affairs.