Construction companies that cannot prove they have enough money and technical capacity to handle major projects could soon be shut out of government tenders as the State moves to stop delays in affordable housing projects.
The State Department for Housing and Urban Development is reviewing how contractors are assessed before they are awarded public projects, following cases where some firms secured tenders but failed to raise the resources needed to start work.
Principal Secretary Charles Hinga told the Committee on Housing, Urban Planning and Public Works that the government wants contractors to be matched with projects they have the financial and technical ability to complete within the agreed timelines.
The changes are expected to affect companies seeking work under the Affordable Housing Programme and other government-funded construction projects, as the State seeks to prevent firms with limited capacity from taking on contracts beyond their ability.
Hinga said the large scale of the affordable housing programme had revealed weaknesses among some local construction firms, as well as problems in project management and procurement.
“What we are looking at is something that is unprecedented in the market. the scale of the affordable housing programme had exposed weaknesses in the capacity of local contractors, as well as gaps in project management and procurement systems,” Hinga told the committee.
He said the government had found instances where firms won tenders but were unable to mobilise the finances, equipment and other resources needed to begin construction.
The State is now tightening its systems to keep unqualified companies from accessing public projects and to take action against contractors who fail to deliver after being awarded tenders.
The approach will see the government pay closer attention to the size of a contract against the ability of a company to execute it, with firms expected to demonstrate that they can meet the demands of the projects they bid for.
Hinga also linked delays affecting some affordable housing sites to procurement difficulties, limited contractor capacity and the shift to the electronic government procurement system.
He said the State Department had been working with the National Treasury to resolve problems affecting the evaluation and awarding of tenders under the new electronic procurement platform.
Despite the setbacks, the government said the challenges were not affecting the entire affordable housing programme.
Hinga said most projects were moving forward, while measures were being put in place to address problems at sites that had experienced delays.
“We don’t want to say that there is no problem. There are challenges, and we are walking around them,” he said.
The Parliamentary committee has called for a detailed review of projects that have stalled, including the challenges at each site and the steps being taken to get construction back on track.
Sirisia Member of Parliament John Waluke also called for a comprehensive status report on the stalled projects to establish what caused the delays and what is being done to revive construction.