CONTRACTING WITH LOCAL CONTRACTING WITH LOCAL CONSTRUCTION FIRMSCONSTRUCTION FIRMS

Afternoon, Monday 22 NovemberAfternoon, Monday 22 November

Contracting: sector problems

Force account no longer really possible (donor opposition, very inefficient, but feasible if it could be properly managed)

Must develop small construction and maintenance enterprises located outside the capital to do small jobs in remote areas

These can be small informal ones for labour supply for maintenance or to sub-contract to larger formal equipped ones for spot improvement works

Decentralisation of management trained in contract management also necessary

But sustainability of a rural construction sector difficult because conditions for survival are not there

Contracting: contractor difficulties

Demand for construction weak and variable so firms must have access to working capital and be polyvalent

Jobs are small so firms must be also Firms must minimise fixed investment: rather rent equipment

and stick to labour-based works Contractors can be predatory and not always competent.

Good contract management and training must be provided They suffer from slow disbursement procedures: contract

administration must be efficient Good trained ones cannot invest in a basic equipment

package: need credit as part of a training programme

Contracting: advantages

Provides a rural work base from which firms can expand to other types of construction

A major contributor to rural employment and poverty reduction (maximise multiplier effects)

And with the necessary programmes, a promotor of gender equality

Guarantee road sustainability Construction sector is vital to rural

development

Contracting: what to do

Provide multi-level assistance to potential entrepreneurs (classroom and on-the-job training, guarantees of future work, credit to buy basic equipment package)

Implement simplified contracting procedures Make sure payment procedures are efficient

and rapid Finance rural infrastructure (roads, clinics,

schools, etc.) Provide effective contract supervision,

sanction corruption and incompetence

Links to other modules

Maintenance Labour-based works Environment Gender Poverty reduction Corruption

References

Contracting: references

Local contractor development Small enterprise support Capacity-building in the construction

sector.pdf

Private sector implementation