AfricaLive: Do you feel this is the right time for Uganda’s engineers to come together and ponder about the future of the industry?
Maurice R. Kairania: I believe it’s long overdue. When I graduated from University at the start of the century, there were only two or three major foreign construction companies operating in our country. We never anticipated that as our economy continued to evolve, there would be an influx of foreign players, especially from Asia. In our space, you find that out of 10 projects worth above $30 million, 8 are awarded to Asian companies. Local companies struggle to meet the prerequisite requirements of taking part in large contracts.
Aside from the constraints put on us by the contract requirements, we also have a culture issue. Most local companies don’t see the bigger picture, they want to operate within their own nucleus and only deploy the little funds they have raised themselves. Growth, therefore, becomes difficult due to a lack of required skills and lines of credit. We must, therefore, embrace collaboration with firms in other African countries to be able to compete and take on large projects.
AfricaLive: Please share with readers the story of EGISS engineering and how you want to position yourselves to achieve your goals going forward.
Maurice R. Kairania: I started off working in a consultancy and I thought I would probably keep doing that late into my career. The urge to chase my original dream of owning a company caught up with me soon. I also realised that opportunities for consultancies were thin and that competition was growing. As an engineer, I knew I had what it took to become a full-fledged contractor and knew the business dynamics in the industry very well. Contracting to me was also more interesting because I loved the idea of designing, as opposed to just doing advisory reports.
Aside from being interesting, there was a clear gap in the industry. We didn’t have enough technical people to help build our national infrastructure. I, therefore, chose to build a company that would be sustainable and multigenerational. I got started in 2010 by trying my hand in subcontracts and then proceeded to bid for public works projects in 2012.
Getting into public works required a bit more pedigree. I needed a project security facility from the bank, and a performance guarantee as well. It was pretty much a learning curve for me between the year 2010 and 2014. By 2015, we had all the prerequisites ready and were raring to go chase the larger projects. We were soon able to acquire a credit line of $400,000 to enable us to get some projects started.
We made a decision as directors to reinvest earnings back into our business while also committing to the expansion of our line of credit by servicing our loans properly. We knew that if we could convince the bank that we were in this for the long haul, we would increase our line of credit progressively. At the moment, we have a credit line of $2 million and are able to execute projects of $4 to $5 million. There is a big future for us if we combine efforts with other firms from around the continent so that our capital base can expand. A broader capital base means that we can take on bigger projects and the money stays on the continent.
Our government is trying to help companies like ours position ourselves better through a mandatory 30 per cent local content policy. Foreign companies that get contract awards of over $20 million will be mandated to subcontract at least 30 per cent of the work to a local company. Awarding 30 per cent of a job to a local company means nothing if we don’t have enough qualified and reputable local content firms. It is, therefore, important to build capacity through partnerships and collaborations with companies within the continent and beyond.
AfricaLive: With the African Continental Free Trade Area Agreement set to launch early next year, what opportunities do you anticipate and what markets will you be looking to expand into?
Maurice R. Kairania: We have a keen eye fixed on Southern Sudan because the country presents some glaring opportunities for us. It is close to where we are stationed, it needs a lot built and we have established some connections there. We are also looking at Eastern DRC as well as Burundi. When it comes to partnerships, we are looking for companies that have about 20 years’ experience and have done projects in excess of $15 million.
At the moment, we are into the building sector as well as earthworks and murram roads. In the near future, we want to bring in partners that can do paved roads from within the region and also places like India.
AfricaLive: Africa is facing an affordable housing crisis due to a rapidly growing population all over the continent. What approach should be taken to this challenge?
Maurice R. Kairania: We need to have categories clearly spelt out when it comes to housing. We have low, high as well as middle-income dwellings. Majority of our cities have slums in them. Unless we get rid of the slums we won’t build top-class modern futuristic cities. Those who dwell in slums must be moved into pre-prepared service estates that have reasonably priced houses. The slums then get to be turned into infrastructure spots that pave the way for modern high-class cities.
The satellite estates will relieve pressure from the cities and will help create more serenity and order. The creation of such satellite dwellings will involve stakeholders like the government, as well as the private sector. To attract private players, we must provide them with clear and affordable lines of credit.
AfricaLive: What would a truly sustainable future for construction and engineering look like for African continent and how can it be achieved?
Maurice R. Kairania: A sustainable construction sector must have defined classes when it comes to the companies involved. Companies should be able to apply and get upgraded based on their growth and achievements. The higher classes of companies are always assured of work and the same should apply to the lower classes. If the lower class companies are assured of contracts, then it will give them the capacity and motivation to grow and matriculate into the next class. Training must also be a big part of our agenda. We must train our engineers and other technical staff to compete.
As a company, we have invested heavily in training by bringing in experts from the procurement, risk management, as well as project management sectors to help train our staff. Collaboration must also be a key component of our sustainability efforts.
We need all barriers to trade and collaboration brought down immediately. We should be able to comfortably collaborate with a Kenyan or Tanzanian company in order to carry out big projects and make gains together. Collaborative ventures like these also help individual companies gain skills and experience.
AfricaLive: What is the main message you want to communicate about the future of your company and what’s your outlook for the construction industry in Uganda.
Maurice R. Kairania: We are looking to grow by seeking competent partners. I feel like we have hit a certain ceiling and a much overdue breakout is needed. We have established structures and have decent projects under our belt. In the next five years, we should be one of the biggest players in the Ugandan industry. We also want to expand our footprint all over the region and beyond.