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Parliament Allows Gov’t To Borrow Shs 1.22 Trillion For National Roads Upgrade

Parliament has okayed a request by the government to borrow Shillings 1.22 trillion from the Islamic Development Bank, and the OPEC Fund for International Development for upgrading national roads across the country. The House approved the request during a plenary sitting chaired by Speaker Anita Among on Wednesday.

The funds will facilitate the rehabilitation of the Masindi Port Bridge designed for 100 years lifespan; Katine-Ochero road, Kiruhura-Bwizi-Rwamwanja-Kahunge road, and Mpara-Bwizi road, each designed to last for 20 years. Robert Migadde, the National Economy Committee Deputy Chairperson who presented an assessment report of the loan request stated that as much as Uganda’s public debt remains within sustainable levels, the country is rated at moderate risk of debt distress.

The Committee recommended that the Ministry of Finance, Planning, and Economic Development should renegotiate the risk premium of the loan to a lower rate and also have it fixed for the entire debt servicing period. Further, the Committee also implored Ministries, Departments, and Agencies (MDAs) to observe strict project designs before sourcing for money, to minimize project delays by effectively compensating project-affected persons – PAPS under the Upgrading of National Roads Project.

The government is expected to provide 83.388 billion Shillings for land acquisition. The House also authorized the government to refinance the reconstruction, rehabilitation, and upgrade of major roads in the Masaka and Ntungamo districts at Shillings 691.6 billion. Under the prefinancing agreement, 89.5km of Masaka-Mutukula road will be reconstructed, 11km of Nyendo-Villa Maria road will be rehabilitated, 3.5km of access roads to Masaka UPDF barracks and to Masaka Industrial Park will be upgraded, whereas 28.5km of Kikagati-Kafunjo road will be improved.

In a Committee report on the prefinancing proposal, it was observed that the unit cost of a road under the project is valued at 5.08 billion Shillings per kilometer compared to 3.38 billion [for upgrading] as indicated under the annual budget performance report for the financial year 2022/2023. The Committee recommended that given the high unit cost of construction, the Ministry of Works and Transport as well as the Uganda National Roads Authority (UNRA) should ensure that the contractor delivers the best quality bridges and roads to achieve value for money.

The approval comes after Parliament, last week approved an earlier request by the Government to borrow up to 1.807 trillion Shillings from the Export-Import Bank of China and World Bank to finance national internet fiber and the Climate Smart Agricultural Transformation Projects.

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