For about six 7 years, the road sector has been taking the lions’ share of our national resource envelope. For example, in the current FY2016/17, the sector’s total allocation amounts to UGX 3.45tn, representing 13.1% of the UGX 26. 3tn national budget.
It is true for any economy to realize economic growth; it needs well developed transport infrastructure to smoothen transportation of goods as well as enhancing tourism development. Despite, the government desire to increase the paved road output in Uganda, there have been a few limitations.
High cost of road construction
In every financial year, Uganda National Road Authority (UNRA) proposes unit cost of road construction. In FY2016/17, the proposed unit cost for upgrading from gravel to Bitumen is UGX 2.9bn from UGX 3bn in FY2015/16. However, the policy statement further elaborates that the market rates will determine the actual unit cost through a competitive bidding process.
There has been a huge public debate on the cost of road construction in Uganda as opposed to other countries within the East Africa Region. Monica Azuba Ntege, Minister for Works and Transport in her response to the National Economy Committee’s concerns over the high cost compensation of UGX 200m per acre for commercial plots in Luwero for the Luwero Butalangu road.
She attributed the high cost of road construction in Uganda on the unfair government policies and taxation regimes on construction inputs, land tenure system that obliges compensation before land usage, the weak local construction leading to over dependency on foreign labour which is expensive, expensive imported construction materials like petroleum products, inflation, high bank interest rates and difficult of getting bank loans and guarantees among others.
The other point she didn’t point out is corruption which could be actually the reason for the high cost. Road construction in Uganda has been slowed down by the high-level corruption especially in the national authority responsible for road construction. The recent inquiry into the Uganda National Road Authority indicated that so far UGX 9tn has been used in the last seven years to construct 1,500km of roads. The same amount could have constructed 5,147km of roads basing on the international standards of cost per kilometer. These figures indicate an average cost Ugx 6bn per kilometer. This high cost has limited road output which has averaged at 140 Kilometers per year.
This high cost of road construction which as a result of a number of combined factors has left us with no value for money. A case in point is the proposed construction of the Luwero-Butalangu road. The maturity period of the loan that will finance the project is 20 years as is the life expectancy of the road.
The Deficit in paved roads.
According to the National Development Plan(NDP) II 2015/2016-2020-2021, roads in Uganda are categorized as National roads-21,000kms, Districts- 32,000kms, Urban-13,000km. This makes a total of 66,000 km road network with the exception of the community access roads which amounts to 85,000km. Currently only 4000kms of roads is paved, representing 6% of the 66,000km road network. This leaves 62,000km of the road network gravel. The NDP II targets to achieve more 2205km paved roads in the period of 5 years thereby realizing an increase of 6,000km of road tarmac.
As pointed out by the inquiry, UGX 9tn investment would have given us 5,147km of tarmac roads, translating into UGX 1.75bn unit cost per kilometre. This will require Government to solicit UGX 108.5tn to complete the tarmacking of the remaining 62,000km roads. The current national budget amounts to UGX 26.3tn. To achieve completion of the upgrading of the remaining 62,000 km of unpaved roads, it will require the country to relegate other sector and spend its entire current budget for 4 years.
This is an indication of the country’s limited resources to realize the completion of the above remaining road network in the limited time possible as most citizens may wish. The biggest chunk of the resources used to upgrade our roads are borrowed on addition to the sector being dominated by foreign constructors especially Chinese. This calls for change of strategy. The local construction sector as is the economy has benefited less. A country that took a decision to invest the biggest part of its national resources in the road sector should have first build the capacity of its local construction sector.
The need to change strategy
While appearing before the Parliamentary Committee on Commission Statutory Authorities and State Enterprises, Allen Kagina, the Executive Director of UNRA informed the committee of the potential capacity of Uganda Engineers to work on our roads but lack the finance to acquire equipment for road construction. Government should forego one road construction project and allocate those funds towards establishing a fund to provide low interest loans to local engineering companies to enable them acquire equipment and bid for these contracts.
The other idea is for government to go for first class murram instead of tarmac. For example, it isn’t economically viable for government to invest UGX 214bn contracting a Chinese firm, Shengly Engineering Co. Ltd to construct the 100km Kyenjojo-Kabwoya road when the communities through which the road is traversing are in dire poverty. The first-class murram would be a bit cheap and the rest of the resources would be invested in education sector to build the technical capacity of Ugandans to work on their roads or the agricultural sector like establishing water dams or distributing water pumps and other agricultural in puts to farmers to stimulate agricultural production.
The last alternative, would be for government to enable UNRA acquire more equipment and technical staff to undertake the construction of our roads. It is high time a decision beneficial to Ugandans is taken. Otherwise, it makes no economic sense to pride in the number of tarmac roads output with external financing dominated by foreigner contractors.