Posted on June, 22, 2022 at 08:33 am
About half of 69 flagship government projects are behind schedule, raising concerns of cost overruns, higher interest payments and delayed benefits to the public.
The multi-million dollar projects which were significantly behind schedule as of March are listed in the latest report by the Parliament’s Budget committee that scrutinised the 2O22/2023 budgets.
The Ministry of Finance Permanent Secretary, Mr Ramathan Ggoobi, who doubles as the Secretary to Treasury, initially promised to discuss implications of the delays on the economy and to rising loan burden after the reading of next fiscal year budget, which happened a week ago. Since then, he has not responded to our reminders.
Dr Joseph Muvawala, the executive director of the National Planning Authority (NPA), did not respond to our request for a comment.
The most notable include the Kampala-Jinja Expressway, Kibuye-Busega-Mpigi, Kampala Flyover Construction and Road Upgrading Project, Rehabilitation of the Metre Gauge Railway, East Africa Crude Oil Pipeline (EACOP), Development of new Kampala Port in Bukasa, the construction of the new Standard Gauge Railway, and Hoima Oil Refinery.
Only four out of the 69 projects are on schedule, according to findings by the parliamentarians, while the rest are either awaiting financing, at feasibility study or project idea stage.
According to the analysis by Parliament Budget Committee, some of the successful undertakings include capitalisation of strategic public corporations, which include the Uganda Development Bank (UDB), Uganda Development Corporation (UDC), Uganda Telecom Ltd (UTL), and Uganda National Oil Company (UNOC).
lndustrial Parks Development at Namanve, Bweyogerere, Luzira, Soroti, Moroto, Mbale, Masaka, Jinja, Mbarara, Kasese, Luwero-Nakaseke, Arua, Gulu, Fort-Portal, Kabale, Hoima, Oraba, Onaka are also listed as “on schedule”.
A July 2020 report by Africa Freedom of Information Centre (AFIC) a partner of CoST Uganda, an infrastructure transparency initiative, indicated that the government lost more than Shs300b in delayed public procurement for works and transport, health, agriculture and education sectors.
CoST promotes “transparency by disclosing data from public infrastructure investment, helping to inform and empower citizens, enabling them to hold decision-makers to account”, according to information on its website.
In a report titled, promoting fair business practices between government and the private sector in public infrastructure projects delivery processes in Kampala, which provides insights into key project in the past six months, CoST Uganda reported that 91 percent of the contracts are completed late.
A separate May 2017 study by the Finance Ministry Budget Monitoring and Accountability Unit (BMAU) titled, Delayed implementation of government projects: To what extent is it a problem of poor planning and budgeting? found that 75 percent of the projects delayed due to “inefficiencies in planning and budgeting”.
Other problems flagged in the report include delayed initiation of projects, poor timing and negotiation of land acquisition and inadequate capacity of technical staff to plan and cost projects which results in overruns in time, cost and quality.
Loan repayment
In January, Works and Transport minister Gen Katumba Wamala told lawmakers that the government loses about Shs123m each week in loan interest payments on projects that, among other things, are delayed by funding shortfalls.
Two months later, in March, he attributed the delayed Standard Gauge Railway (SGR) construction, which is part of a regional northern corridor infrastructure project, to budget cuts.
The government expected to secure $2.1b from Export-Import (EXIM) Bank of China to bankroll the 273-kilometre Malaba-Kampala first phase of the SGR project, but the fund mobilisation ran into headwinds as domestic politics and the outcome of a wide evaluation of Beijing-financed overseas infrastructure projects led Xi Jinping’s government to tighten grant and loan rules.
Under the plan, Kenya was to construct the SGR segment from Mombasa via Nairobi and Naivasha to Malaba border to connect with the Uganda led that was expected to link to South Sudan and Rwanda, helping to cut cargo and passenger transportation costs and time from the coast to inland countries.
Whereas Kenya commissioned the Mombasa-Nairobi stretch of SGR in June 2017, financing gaps handicapped completion via Naivasha to Malaba, Uganda’s side of the project has remained wet in the wings, stalling progress by other partner states.
China Harbour Engineering Company, a Chinese firm, was contracted to execute the works that has gone nowhere due to lack of money.
In its May 2017 report, the Finance Ministry Budget Monitoring and Accountability Unit raised delayed procurements, land acquisition and compensations alongside incorrect timing of planned activities as bottlenecks to infrastructure upgrade.
The study identified gaps in the capacity of technocrats in planning and costing projects and late release of funds. Others challenges include unforeseen circumstances, drought and understaffing in some ministries, departments, agencies and local governments.
In the past, delayed payments to contractors, poor equipment, bureaucracy and change in work scope have been cited as some of the reasons frustrating completion of government projects.
Officials have attributed some of the delays in vital projects such as the Busega-Mpigi expressway to Covid-19 disruptions and associated lockdowns that choked supplies as well as the project’s intricate terrain. The road was supposed to have been completed in May 2022, but the deadline has since been pushed to 2025.
The government is locked in a Shs52.4b dispute with a construction company in a claim arising out of a dispute to construct the Mbarara – Ntungamo – Kabale – Katuna Road.
On December 29, 2010 government contracted Reynolds Construction Company Limited (RCC) to reconstruct the Mbarara – Ntungamo – Kabale – Katuna Road at €65.8m. The European Union (EU) is funding the project.
The contract, according to government statement, was to last 36 months with completion on August 2, 2014. It was extended to August 2016.
Arising from the extension of the completion date, RCC claims prolonged costs of €14.1m which the government disputes.
Source: Monitor