Effects of foreign contracting firms on capacity building of local contractors in road projects

The construction industry in Tanzania is very crucial to national development by being allocated over 15% of annual state budget. But the local contractors have had very little market share due to their poor performance leaving a greater part of the market to foreign contractors who indirectly siphon our national wealth to their countries thus increasing our poverty. The main objective of this study is to evaluate the effect of foreign contractors in capacity building of local contractors with regard to the improvement of local contractor’s market share and offering quality and timely products. The research evaluates the performance of local subcontractors of foreign firms in road projects and examines the contribution of government initiatives aimed at capacity building of local contractors. The study assesses the barriers to capacity building between local and foreign contractors and attempts to formulate strategies deemed to improve co- operation between foreign and local contractors. The study has established that in construction projects executed by foreign contractors where local contractors are employed as subcontractors or joint partners, their capacity to execute own projects is significantly improved. But most local contractors still lack capital and equipment to expand their market share in construction industry. The study recommends an establishment a policy that requires foreign contractors to form joint-venture with local contrators in order to bid and execute construction projects.