Private sector implementation
 
The development of a local contracting industry in developing countries, able
to mobilise and effectively utilise local human and material resources in the
development and maintenance of infrastructure, is seen as an important means to
promote local employment and improve efficiency. Small-scale contractors can
play a key role in the implementation and maintenance of rural infrastructure
services, and are recognized as being important sources of employment creation,
yet they often face enormous obstacles in obtaining public contracts. For
example, tenders are often designed for large enterprises, the tendering system
may not be transparent, and small-scale contractors frequently do not have the
skills or resources to carry out the work that is required. A thriving local
contracting industry needs the development of a conducive environment, the
production of appropriate contract documentation, the training of local
contractors, and the establishment of an efficient contract administration and
supervision capacity in local government agencies.
Work carried out by the ILO has shown that the constraints on the use of
labour-based technologies by the private sector have more to do with the general
problems faced by small-scale contractors than with any basic difficulty with
the technologies themselves. This has a significant bearing on how one should
foster the proper development of a local construction industry. When changing from Government
executed operations to private sector implementation, a serious contracting authority
has to address these issues through the creation of an enabling environment.
In seeking to develop local capacity in the construction sector, i.e.
contractors as well as consultants, it will be important to look at the
environment in which they operate. This includes the capacity and ability of the
client organisations to cope with their new and changed role as contract
managers and supervisors, as well as the ability of local contractors to
efficiently run their construction business and to effectively develop and
maintain public infrastructure. Local consultants herein often complement the
supervisory capacity of the client organisations.
Without compromising on the demands of the finished product, the ILO has
successfully demonstrated in a number of countries, the viability of private
sector executed labour-based programmes. These programmes include training and
capacity building at various levels to all partners involved, both public and
private sector, in technical, managerial and financial aspects of infrastructure
works. This training not only deals with contracting parties and contracting
methods in a decentralized context, but also with an appropriate set of bidding
procedures, announcements of works, submission of bids, bid opening, evaluation
of bids, contract awarding, contract documents, mobilization and contract
implementation, payment of works, disputes and arbitration and contractor
registers.
These contract documents also form an appropriate entry point to ensuring the
compliance of certain, minimum working conditions related to labour standards,
such as minimum wage, non-discrimination, the elimination of forced and child
labour, the right to organize, protection of wages, safety and health and
insurance against work accidents.
The real challenge now being faced by governments is to facilitate real
market driven growth and competition for the construction industry. This means
setting up programmes and incentives to truly encourage the domestic private
sector to be a viable option to government force account operations and
international contractors. For this to happen, contractors associations and
construction councils alike that are serious in development, must take on
responsibility in developing structured training and mentorship programmes and
be fully professional, and to the extent possible, self-funding operators.
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Ghana
A small contractor development project in Ghana provided
comprehensive business and management training to the staff of 93
companies working on labour-based road rehabilitation projects. In
addition, over 100 Government engineers and foremen were trained in labour-based
works and contract management. A nationwide expansion of the project
resulted in the rehabilitation of over 1,500 km of roads and 3,500
culverts in the period August 1989 to December 1996. The cost of
rehabilitation ranged from $10-11,000 per km, with 2,500 workdays of
employment created per km. During the first 8.5 years of its
implementation, the programme created some 4.4 million workdays (or 20,000
work years) of temporary employment, implying also, at an average wage
rate of approximately $1 per day, that some $4.4 million was injected into
the rural economies as direct cash wages. Substantial indirect spin-offs
in terms of employment creation were obtained through investments in
housing improvements, local production of hand tools, farm rehabilitation
and social expenditure. An interesting recent development is the
establishment of associations of labour-based contractors, which have
benefited from training in ILO-assisted programmes.
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Further reading
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Contractor's Handbook for labour-based road works - PDF 1,855 Kb
Roads Training School, Roads Department, Ministry of Works and Supply, Republic
of Zambia, 2004
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Development of contractor registration scheme with a focus on small scale civil
work contractors - PDF 555 Kb
Uriyo, A., J. Mwila and L. Jensen, National Council for Construction and ILO,
September 2004
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Manual for supervision of labour based road rehabilitation works
- PDF 5,896 Kb
Tembo, S. and F. Blokhuis, ILO, 2004
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Training Guidelines on Small Scale Contracting - PDF 2,889 Kb
Bjorn Johannessen,
International Labour Organisation
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The Urban Material Source Book - A guide for community managed and
labour-based upgrading of low-income urban settlements - PDF 131 Kb
George Simba and Jan Fransen, 2000
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Contract documents for small contract in the road sector - PDF 53 Kb
David Stiedl, 2000
- Employment-Intensive Infrastructure Programmes: Capacity building for
contracting in the construction Sector
- PDF 2,936 Kb
Peter Bentall, Andreas Beusch and
Jan de Veen, 1999, ISBN 92-2-111581-X35
- Employment-Intensive Infrastructure Programmes: Labour policies and
practices - PDF
2,133 Kb
David Tajgman and Jan de Veen, 1998, ISBN 92-2-111034-630
- Basic conditions of employment act, 1997
– Ministerial Determination: Special Public Works Programmes
- PDF
34 Kb
Government Gazette South Africa, January 2002, Government of South
Africa
- Basic conditions of employment act, 1997
– Code of good practice for employment and conditions of work for Special
Public Works Programmes
- PDF
51 Kb
Government Gazette South Africa, January 2002, Government of South
Africa
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CTP 70: Feeder Roads Improvements and Maintenance by Contract - PDF 130 Kb
Tor Hernes, 1987
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