August 31, 2018—More local firms have been invited to sign up for a pre-qualified list to have any chance of winning contracts to service Uganda’s budding oil and gas sector as the country moves towards First Oil by the end of 2020 and the government is intent on encouraging as much local content as possible.
On September 1st, the Petroleum Authority of Uganda PAU) invites applications for interested individuals and firms to be listed on the National Suppliers Database (NSD). All companies servicing the oil and gas sector are required to be registered on the NSD and failure to do so means no chance of winning any contract. Applications for online registration are being considered until June 30, 2019.
PAU executive director, Ernest Rubondo said on Thursday,”Contrary to last year where registration would be open for only two months, this year it (the NSD) will remain open until the said date. This intended to provide an opportunity for new companies to register throughout the year,” he said.
Rubondo said registering on the NSD, which is used internationally as a reference for supplier contracts, will improve the visibility of the local companies so that they can be located in case there are opportunities that demand their specialized services.
By the end of December 2018, PAU will publish a list of individuals and entities registered on the NSD and this will be updated three times until August 31, 2019. Certain areas have been ring-fenced strictly for local companies.
“We therefore call upon all new companies that are not yet on our date base to take advantage of this chance and register with us. Only registered companies will be allowed to bid for supplier contracts for the oil and gas sector. Registering with us has a number of opportunities that will help companies to compete favourably for opportunities” he said.
According to data from the Authority, there was an increase in the number of companies registered for NSD from 513 in 2017 to 1712 in 2018 representing an increase of 233%. This is expected to increase in 2019. Of the 1712 companies registered in 2018, 716 are foreign, (dominated by Chinese) while the rest are Ugandan.
The foreign registered companies originate from 44 countries with 149 companies coming from China, 61 from United Kingdom, 47 from France, UAE, Nigeria, Kenya having 33 companies each among others.
Rubondo said although there was an increase in the local companies from 378 in 2017 to 996 in 2018, this number is very low compared to how many companies are in Uganda and the opportunities available in the oil and gas sector.
“The value for Money Audit on national content undertaken by the Auditor General placed the current level of national participation at 28 pc. Out of the $133 million spent on contracts, purchase orders and call offs, only 28 pc were undertaken by Ugandan companies. We are doing everything possible to increase this percentage to 80 pc by 2040 and we believe that registering these companies is one way of doing that” he said.
This year’s registration will be web-based. Some of the requirements include a Certificate of Incorporation or registration with the Uganda Registration Services Board (URSB), a Tax Clearance Certificate from Uganda Revenue Authority (URA), a Social Security Clearance Certificate, a banker’s reference letter and a valid and recognised National Identification.
Companies already on the database are also required to update their information and show need to still be considered on the NSD 2019.
According to Emmanuel Mugarura, the CEO of Association of Uganda Oil and Gas service Providers (AUGOS) who represented NewPlan, one of the companies that was the first to be registered on the NSD in 2017, registering has opened up new opportunities for the company that were never available before the NSD.
Mugarura said, “We still have a lot of challenges as local companies that deter us from completing favourably. However when you are registered with PAU, the chances if getting opportunities are much higher than if the company remains in hiding. After all registration is free and there is nothing real to lose. I call upon all Ugandan companies to stop complaining about being sidelined and take the first step which is registering on the NSD.”