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

Meeting with the Uganda National Road Authority (UNRA)

Discussed in the Committee on Commissions, Statutory Authorities and State Entreprises on September 30th, 2016

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For the last 5 days, current and former UNRA officials have been appearing 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 committee is chaired by Bugweri County Member of Parliament Hon Abdu Katuntu.

On both 28th and 29th September, 2016 the committee commenced discussions on the unaccounted for advance of UGX 47.7bn to contractors to pay Project Affected Persons (PAPs) by roads construction projects, as raised in the Auditor General’s report. Although, UNRA officials had attempted to respond to members’ concerns, they weren’t satisfied and resolved to summon the contractors who are holding the money.

The contractors appeared before the committee yesterday but didn’t have the necessary documents and the committee directed them to go back and collect the bank statements for the accounts holding money for the PAPs.

As per the statements submitted, the committee found that these companies have not only been trading this money but have also used it for their operation costs as opposed to its intended purpose of compensating the victims of road construction projects.

For instance;

  1. China Railway 18thGroup (Musita- Lumino-Busia Road) was advanced UGX 12.9bn and only UGX 6.45m has been transferred to PAPs.

The company’s representative explained that they received the money on 26th February 2015 and shifted it to a special account for land and property compensation. However, this particular company has been fixing UGX 10bn since the time they received the money so as to generate interest. Yesterday when they went back after the meeting they redeemed the account with all the money. The committee further found out that this particular company has accumulated worth UGX 1.17bn in interest from this money meant for PAPs.

  1. China Railway No. 3 Group (Kanoni-Sembabule-Villa)  was also given UGX 12.9bn as an advance. The representative of the company reported to the committee that they have compensated PAPs UGX 7.6bn and used UGX 5.7bn for their operations and the remaining balance on the account is UGX 65m.
  2. China Railway No.5 Group (Gulu-Acholibur), recieved Ugx 8.4bn, it has compensated using only UGX 6.83m. The representatives explained that they received the money on 23rdDecember 2014 and changed it US Dollars and sent it to China. They are currently having a balance of UGX 2.5bn only.
  3. Chongqing International Construction Company (Acholibur- Musingo Road) was given UGX 7bn. The representative claimed that it has compensated PAPs using UGX 3.39bn only. According to the Bank Statement submitted to the committee, the Company received the money on its General Account on 12thNovember 2014 and it took 9 months to transfer the money to a special imprest Account (11th September, 2016). In this period they were using the money for their operations. Even after establishing the imprest Account, the contractor continued to withdraw money from the Account for its operations. The statements indicated that they withdrew more than UGX 5.6bn for their operations.
  1. The Auditor General indicated that UGX 6.5bn advancement to Zhongmei Engineering firm (Olwiyo-Gulu) for compensation of PAPs. In the first place, the Auditor General indicated that the advancement to this company wasn’t based on a valuation report approved by the Chief Government Valuer.

The company representative informed the committee that they also engaged in fixing some of this money which earned them UGX 40m in interest. The company used the money from time to time for its operational activities on the project. He further informed the committee that they have paid the PAPs most of the money and they remain with a balance of UGX 79m. However, there is an instruction to pay PAPs about UGX 1.6bn which they do not have.

According to the Contract Agreements signed between the contractors and UNRA, this money for PAPs is supposed to be on a special imprest account. And its withdraw/disbursement to PAPs is after authorization by UNRA. However, these companies traded and used this money for their operations without UNRA’s authority.

Former UNRA, Executive Director Peter Ssebanakita informed the committee that during his time, compensation of PAPs was handled by UNRA but the policy of disbursing money to contractors to pay compensations started in 2014. This was during the time of the then Executive Director SsebugaKimeze, who wasn’t around in the meeting. The current management under Allen Kagina informed the committee that for the new projects, compensation is handled by UNRA itself.

The committee faulted management for failing to supervise these contractors which led to the misuse of public resources. The committee directed UNRA to conduct an audit in one week for the above projects in relation to money for PAPs and the audit to should establish;

  1. The amount of money still remaining on the Accounts.
  2. The operation of the Accounts in relation to the contracts.
  3. Confirm the payment of UGX 15.1bn to PAPs as claimed by the contractors.
  4. Establish the validity of all the bank guarantees given by these contractors.
  5. Submit to the committee by close of business today, the accountabilities for the UGX 15.1 submitted to UNRA by the Contractors.

The committee resolved to;

  1. Communicate to the banks today, holding these accounts to withhold any withdraw of money from the accounts by the contractors.
  2. Ensure that all the money used and even the interested that was generated by the contractors recovered.

UNRA, Executive Director, Allen Kagina informed the committee that she will be travelling on official duty next week for the meeting with World Bank. She assigned Eng. Joseph Otim to take lead of the team when they will appear before the committee on 11th October, 2016 with an audit report.

The committee indicated that it will review the report and undertake remedial measures.

The chairperson adjourned the meeting to 9:30 am, 11th October, 2016.

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