Dar es Salaam. Contractors and construction service providers in Tanzania have proposed seven key measures to cushion the sector against rising fuel prices, warning that escalating costs driven by global geopolitical tensions are threatening the viability of ongoing public infrastructure projects.
The proposals were tabled on June 12, 2026, during an emergency meeting convened by the Tanzania Contractors and Allied Services Association (TUCASA), where industry stakeholders discussed the growing pressure on fixed-price government contracts.
Presenting the resolutions, TUCASA Chairperson Samuel Marwa said the government should first formally recognize the current fuel price surge as a unique economic shock affecting public contracts and infrastructure delivery.
He said this recognition would pave the way for a unified policy response across all public institutions to manage the impact in a consistent and fair manner.
Among the key proposals, contractors want the government to temporarily allow firms under fixed-price contracts to submit verified claims linked directly to fuel price increases, which were not anticipated at the time of contract signing.
They also propose the establishment of a structured negotiation framework bringing together the government, the Public Procurement Regulatory Authority (PPRA), contractors, consultants, financial institutions and other stakeholders to agree on sustainable solutions.
In addition, the association is urging authorities to speed up verification and payment of legitimate contractor claims, warning that delayed payments are worsening cash flow constraints across projects.
For medium and long-term reforms, TUCASA is calling for a review of standard procurement contracts issued by the Public Procurement Regulatory Authority (PPRA) to include clauses that address major economic shocks, including sudden spikes in fuel and material prices.
They also propose a legal and administrative framework to guide how such shocks are handled in public contracts, as well as the introduction of an automatic price adjustment mechanism when costs of key inputs rise beyond an agreed threshold.
According to Marwa, most contractors are currently struggling under fixed-price agreements that do not allow for adjustments despite sharp increases in operational costs such as fuel, transport, and equipment maintenance.
Former TUCASA Chairperson Richard Mlay said the fuel price surge has significantly increased project costs, forcing some contractors to absorb losses or risk abandoning ongoing works.
He noted that rising fuel costs have disrupted financial planning, as transport of materials, machinery operations, and other construction activities have become considerably more expensive than initially estimated.
Industry players also pointed to ripple effects in manufacturing. Hafifa Bahfif, Sales Manager at Haz Factory, said the price of raw materials used in plastic pipe production has increased sharply, further pushing up costs for contractors in water and infrastructure projects.
A mechanical engineer from MERITECH, Ester Christopher, said stakeholders are not complaining, but rather presenting practical recommendations aimed at improving project delivery under changing economic conditions.
She added that continuous engagement between industry players and government institutions is essential to ensure reforms keep pace with real market dynamics and safeguard national development projects.
