A comparative study of local and foreign construction firms’ participation in donor funded road construction projects. a case study of Uganda

Abstract

The study sought to establish the reasons behind the low participation rates of local road construction firms in donor funded road construction projects (DFPs) in Uganda for a ten year period, beginning 1998. The objectives are to: identify all local and foreign construction firms which participate in DFPs, to examine factors such as technical and financial capacity which influence award of contracts to the firm, to assess the compliance with procurement guidelines in the selection and award of tender and to solicit key recommendations to be used to inform the study. The study adopted a cross sectional, causal- comparative and explanatory research design with a combination of qualitative and quantitative methods. A total of 80 respondents were interviewed from grade A+ road construction firms (40 local and 40 foreign). They were chosen using proportionate simple random sampling. Another 10 key informants were chosen from UNRA and donor community using non-probability sampling methods (purposive sampling). Primary data as well as secondary data were collected for purposes of triangulation of results. The findings of the study revealed that while there were instances of corruption by better placed firms, this was just a factor among the many other factors that reduced the chances of local construction firms from winning many contracts under the donor funded road construction projects in Uganda. Other factors highlighted were: capacity gaps, numerous procedures and other characteristics of DFPs. The study recommends that if the level of participation of local construction firms in DFPs is to be increased, the following should be done; creation of professional development schemes, formation of joint ventures by local construction firms, accessing cheap and long term financing, breaking down contracts into small lots, mandating foreign construction firms to sub contract local construction firms, using post qualification in tendering ,adopting punitive measures for corrupt firms and quickly putting in place a local construction industry development policy.