UNRA Executive Director, Allen Kagina (Left) while appearing before the Committee of Parliament on Tuesday.
The Uganda National Roads Authority (UNRA) has revealed that the failure by Government to pay contractors for the works has left the Authority incur fines to a tune of Shs342M daily and about Shs10Bn each month.
The revelation was made by Allen Kagina, Executive Director of UNRA while appearing before Parliament’s Finance Committee that is currently scrutunising the impact of cash limit for the half year performance for the FY 2022/2023 budget performance.
Kagina remarked, “The interest accumulation on the debt we have just reported, interest is growing daily at Shs342M that is today and as the debt increases, this figure grows.”
According to Edna Rugumayo, Director Corporate Affairs at UNRA, the interest rates per contract vary between 10-15% per annum and the last time the Authority counted in September, the interest rate was to a tune of Shs302M per day, but this has since grown with the increment in debt from Shs528.502Bn at the end of FY2021/2022 to now 848.077Bn as of November 2022.
“The arrears’ position has increased by over 140% from Shs215 in 2020/2021 to Shs528Bn at the end of 2021/2022 largely because of the fact that every year, we are getting less and less funding so that each year when we end with arrears, the first quarter almost entirely goes to paying the previous year’s debt,” said Rugumayo.
She warned that if funds aren’t availed on time, the Authority will continue paying interest for a longer period as well as continue paying claims of contractors because when they reduce work, they charge for idle equipment and staff but focus has been put on the old projects that are almost exiting the Project in the Pipeline.
“Because of the squeeze in cash, we have halted the signing even though procurement is completed. So a number of projects that have been approved by the Solicitor General can’t be approved and yet contractors have put in money to prepare these bids, they have paid bid guarantees but we have held on because we aren’t sure we shall get money to even pay advance payment,” said Rugumayo.
Amos Kankunda (Rwampara County) called on the Finance Committee leadership to summon the Minister of Finance, Matia Kasaija in order to have what he termed a genuine conversation on the country’s financial position.
He said, “You see what is unfortunate is that we must be sincere to ourselves as government and appreciate that this is what is available and come out with open hands, plan and use that effectively. For you to engage with projects, owners of land, you commit and later on start incurring interest to this tune is a disservice to this government. We have to go into a genuine discussion with the Ministry of Finance and then agree to either stop and first handle the backlog and make sure it is effectively done.”
The same sentiments were shared by Enos Asiimwe (Kabula County) who noted, “Because clearly we want to know who isn’t doing their job. Paying interest of Shs342M a day, that alone is Shs10Bn a month and somebody is very comfortable.”
Herbert Tayebwa (Kashongi County) called for divine intervention for Uganda arguing that although a big chunk of the national debt is going towards road construction, the impact isn’t being felt by citizens who are still grappling with impassable roads, whose plight has been further worsened by the floods that have swept away bridges.
“To me it is unfortunate and I think we need prayers as a country. Do we need to continue to incur debt as a country which debts are attracting more interest when we haven’t ascertained our ability to pay. Because you are putting a lot but the impact isn’t being felt,” said Tayebwa.
In the current 2022/2023 national budget, UNRA was allocated Shs3.654Trn and of this, Government is supposed to bring on board Shs2.159Trn while external funding is to a tune of Shs1.495Trn.
