CONTRACTING USING LOCAL CONSTRUCTION FIRMS

Contracting: road sector problems Direct execution by government no longer acceptable (donor opposition,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 their areas These can be small informal sector ones for labour supply for maintenance or to sub-contract to larger formal sector 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 investment: rather rent equipment as necessary 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 need a basic equipment package: credit or leasing can be part of a training programme

Contracting: advantages Provides a rural work base from which firms can expand to other types of construction to survive troughs A major contributor to rural employment and poverty reduction (maximise multiplier effects) And with the necessary support, a promotor of gender equality Guarantee road sustainability Construction sector is vital to all rural development infrastructure

Contracting: what to do to help Provide multi-level assistance to potential entrepreneurs (classroom and on-the-job training, guarantees of future work, credit to buy or lease 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