The government of Uganda will see more than 3000 jobs mount up and over shs 120bn saved if it invests Roko Construction Limited, one of the successful enterprises in the country; said officials.ROKO was established in Uganda in 1969 as a construction and engineering company.
Last week, the government listed a proposal before parliament in quest of approval to acquire shares worth more than Shs202b in Roko Construction Limited.
ROKO which employs approximately over 3,000 employees with the vast majority being Ugandan staff and a small percentage expatriate is ranking top in the construction industry and is known to produce an exceptionally high standard of workmanship which is reflected in all the projects they have so far completed.
‘’The motion is premised largely on;the absence of a Government owned construction company which has subjected the Government to contract foreign companies that have flooded the market and repatriate the funds back to their home countries .Also ROKO’s continued ability to handle government projects that require quality and technical ability’’, said a source.
Other groups include; the need to build capacity of local firms in strategic sectors and industries; the need for Government to set Quality standards in the construction industry among others.
It should be noted that currently, the company is a contractor for Government projects such as the Parliament of Uganda, the Inspectorate of government, the Uganda Cancer Institute and the Ministry of Finance, Planning and Economic Development.
‘’Roko Construction Limited has always set the standards for construction works in Uganda with the highest quality thresholds in the execution of all their construction projects’’, said an official.
As such, ROKO was the first construction firm to get International certification standard (ISO standards) in the construction industry in Uganda and has to date maintained the standards.
Over the years ROKO has executed most of the major major building jobs in Uganda including;Workers House, Crested Towers, the Namugongo Shrine, Bank of Uganda, Mapeera House, Acacia Mall, Rwenzori Towers, DFCU Towers, Imperial mall and apartments Entebbe, the Latitude Hotel, Mestil among others.
With a current portfolio value of government and private sector works amounting to UGX 1,064.7 billion, an employer of over 3,000 employees and one of the largest taxpayers in construction, Roko Construction Limited is a key player in the construction industry as well as the economy as a whole.
Further justification for Government’s intervention is the fact that the Company has a pipeline of contracts worth UGX 1,204 billion equivalent of works that it is negotiating with prospective clients in the Oil and Gas, Tourism and Government Infrastructure sectors. This pipeline will enable the company to expand further and create many new employment opportunities for Ugandans.
ROKO and the Ministry of Finance, Planning and Economic Development on behalf of the GOU are set to enter into a Share Subscription Agreement wherein ROKO prepares and offers for sale and Government accepts to purchase 150,000 shares. Following the acquisition of shares, the company shall pay Government its dividends at a rate of 4.35% and also redeem the shares as per the Shares Subscription Agreement.
With the Government liquidity injection in ROKO, a five-year cash flow projection of the company reveals free cash flow increases 12-fold over five years, from UGX 1.02 billion in 2022 to UGX 122.9 billion in 2027.
This analysis demonstrates that Government support for 3 the Financing Plan, together with Governance and Management Reforms, will therefore positively impact the Company’s viability and financial position.
To date the company continues to exhibit consistency in the execution of their construction works in line with the International certification standards.
Additionally the company is undertaking New Projects; In the last 9-months ROKO has successfully concluded projects such as the Electricity Regulatory Authority Headquarters, the Insurance Regulatory Authority Headquarters, the Busoga Institute of Technology, Mbarara Central Market, Uganda Hotel Tourism and Training Institute (Phase1), Makerere University School of Public Health (Phase1), National Social Security Fund Fit out among others.
‘’Therefore, having stood the test of time in the construction industry, Roko Construction Limited is a worthwhile investment for the Government of Uganda’’, revealed an official from Roko.
The company wants government to regard to pillar 10 of the introduction to NDP III on increased role of the state in facilitating development through wholly or jointly investing with the private sector.
Furthermore, the company asked government to consider Chapter 2 (2.4.1) (ix) on Emerging Issues under the National Development Plan III on the need to support the private sector particularly local SMEs to develop capacity to drive industrialization effort, increase exports, create jobs and increase local content.
Also ,it notes that the strategic objective (v) of the National Development Plan III on supporting private sector development through provision of affordable financing for production and Business should be considered given that Roko Construction Limited employees 3000 Ugandans and up to over 13,000 induced jobs;
Roko Construction Limited has on average been paying approximately UGX 15.1 billion in taxes wherein it has been ranked among the top tax payers and UGX 1.4 billion in pension contributions.
The company has obligations to financial institutions and creditors that are systemically important to the much needed national economic recovery amounting to UGX 202.4 billion;
Roko’s creditors have credit linked effect on their suppliers and hence other sectors of the economy;
According to official from Roko, the company needs to execute the current projects successfully and reduce the cost of funding it is currently experiencing.