Note: This is our record of what transpired in the meeting. Not verbatim.

Meeting With The Uganda National Road Authority (UNRA) – 3rd Convening

Discussed in the Committee on Commissions, Statutory Authorities and State Entreprises on September 28th, 2016

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Officials from UNRA today appeared before the parliamentary committee on Commissions, Statutory Authorities and State Enterprises to respond to queries raised by the Auditor General Report for the Year June 2015.

The team from UNRA was led by its Executive Director, Allen Kagina. Former Executive Directors of the entity, James Okiror and Peter Ssebanakita also attended the meeting since some of the queries arose at a time when they were the Executive Directors. The meeting was chaired by Committee Chairperson, Abdu Katuntu, Bugweri County, Member of Parliament.

The meeting mainly discussed the issues which they stood over yesterday (27th September, 2016) and they include the following;

Nugatory expenditure- arbitration award

The Auditor General reported that UGX 6.6bn was paid to Dott Engineering Services in arbitration that resulted from a dispute in the Centre of Arbitration and Dispute Resolution against Attorney General regarding a contract for the backlog roads maintenance programme for seven (7) roads in Kampala.

Management explained that the query arose as a result of the contractor making the following claims regarding the contract; sought for payment in Euros instead of Ugandan currency, extension of the contract due to security reasons at that time and increase the cost due to the extension of the period. However, management directed the Consultant (Contractor Supervisor) to carry out an evaluation and found out that all the contractor’s claims were baseless. Although, management argued that the contractor didn’t have a case, it and the Attorney General appeared before the Tribunal only once and without evidence.

The UNRA legal officer then (Marvin Byaryaruha) appeared before the committee and explained that they provided all the required documents to support the case to the legal officer in the Attorney General’s chambers. He further explained that the lawyer in the Attorney General’s chamber (Kosia Kasibayo) who handled the matter is now working with in Legal Department of UNRA. He added that by the time he left the institution payment of the court award hadn’t been yet effected and legal officer who took over after him is William Tumwine.

The chairperson had earlier informed the meeting that former Attorney General Peter Nyombi will appear before the committee tomorrow. Again, the committee resolved to summon the Solicitor General and the other legal officers (Kosia Kasibayo and William Tumwine) to appear before the committee tomorrow.

 Nugatory Expenditure – Payment of Interest

The Auditor General reported that a total of UGX 1.1bn was paid to an International Company as Interest on delayed payments for various payment certificates. Management explained that this was due to unavailability of funds. The committee again stood over the matter and directed management to present evidence indicating that there was no money to pay the company at that time.

 

Nugatory Expenditure – Payment to a legal firm

UGX 254m was paid to Agaba Muheirwe & Co Advocates in respect of legal fees for an individual plaintiff who sued UNRA for failing to give final advice on whether to halt or continue building a commercial building on plot No 587, Block 438 at Nkumba due to the on-going road construction.

Management submitted all the letters regarding the communications between Aron Musisi Kayanja and UNRA. In July 2012, Musisi Kayanja wote to UNRA seeking advice on whether to halt his construction or not. On 22nd October 2012, again Musisi sought for a final advice regarding his construction process. In August 2012, the then Executive Director of UNRA, Peter Ssebanakita wrote to the Government Chief Valuer to value the property, the letter was also copied to Macdonald, a consultant who was handling land acquisition for UNRA at that time. In November, 2012, Peter Ssebanakita again wrote to Kayanja indicating to him that his property won’t be affected by the road construction.

Eng. Peter Sebanakita explained that by the time he left UNRA, they had agreed that the road construction would not affect Musisi’s building. He further explained that the road design was realigned and it passed through the building but this was after he had left the institution. This was after finding out that the earlier design was going to affect a main water source. He requested that Chris Manyindo, the then project engineer who is still working with UNRA be summoned to give more details. The committee directed the current Executive Director, Allen Kagina to come along with Chris Manyindo before the committee tomorrow.

 Nugatory expenditure on Due Diligence for Katosi Road

Payment of UGX 58m was made to an Independent Consultant (Karoli Ssemogerere) to carry out due diligence on Eutaw Construction Company Incorporation for the road works on Katosi Road. The Auditor General further noted that while the contract for the Mukono-Katosi Road was signed on 15th November, 2013 the consultant was paid in July 2014 to travel to the USA for the exercise.

The exercise was for one month and the breakdown of the costs was as follows;

Payment Description                                  Amount US ($)

Per-diem for 20days                                    9, 000

Air travel                                                         6,000

Inland travel                                                  4,000

Contingency                                                  3,000

 Total                                                                    $22,000

The Legal consultant, Karoli Ssemogerere appeared before the committee and he acknowledged receipt of USD 22,500 to travel to America and carry out the due diligence on Eutaw Construction Company. Asked why he didn’t advise his client (UNRA) that the due diligence wasn’t necessary after the contract had been signed – He explained that this was necessary as per the contract and Rule 70 of the Public Procurement and Disposal of Public Assets Regulations. He further explained that he traveled to America between 14th August and 17th September 2014.

Although the committee had summoned him to appear before the committee with his passport. He didn’t come with it and the committee handed him to Parliament Criminal Investigations Department to escort him to his home and bring the passport.

Unaccounted for Advance – UGX.47.7bn to contractors to pay Project

Affected Persons (PAPs)

The Auditor General observed that a sum of UGX 47.7bn was advanced to and is now held up by various contractors for property compensations to Project affected Persons (PAPs) by roads construction projects. For instance, the Auditor General indicated that UGX 6.5bn advancement to Zhongmei Engineering firm for Olwiyo Gulu Project was not based on the valuation report approved by the Chief Government Valuer.

Other contractors holding the money include; China Railway 18th Group (Musita- Lumino-Busia Road)  UGX 12.9bn was advanced, but only  UGX 6.45m was transferred to PAPs, China Railway No. 3 Group (Kanoni-Sembabule-Villa) recieved UGX 12.9bn,  only UGX 5.98bn has been given out,  China Railway No.5 Group (Gulu-Acholibur) received Ugx 8.4bn as an advance and  only UGX 6.83m has been  used for compensation.  Lastly, Chongqing International Construction Company (Acholibur- Musingo Road) was given UGX 7bn and it has compensated PAPs using UGX 3.39bn only.

Management submitted the bank payment vouchers for compensation of PAPs to the contractors before the committee. It also submitted evidence indicating that money for compensation is included in the contract. It requested for more time to submit a report indicating that some PAPs received the compensations.

The committee observed that this money was advanced to these companies in late 2014 and early 2015 but the disbursement has been low. And that there is supposed to be an independent imprest account in a reputable bank in Uganda which UNRA is supposed to disburse compensation money and thereafter the contractors expend it to the PAPs.

The committee directed that management avail all the documents indicating advance payments to the contractors. The committee further resolved to summon the representatives of these contractors holding these monies to appear before the committee tomorrow.  Also summoned to attend is the Government Chief Valuer.

The meeting was adjourned to tomorrow 9: 30 am

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