Local contractors have petitioned the Parliamentary Committee on Physical Infrastructure, accusing Uganda National Roads Authority (UNRA) of failing to clear their outstanding arrears amounting to UGX 500 billion, accrued since 2021.
Appearing before the Committee, the President of the Uganda National Association of Building and Civil Engineering Contractors (UNABCEC), Eng. Jameson Olonya UNRA said that UNRA had accumulated arrears of over Shs500 billion since January 2021.
He said that the arrears had greatly affected their operations and livelihoods. He noted that many of the contractors had acquired bank loans which continue to accumulate interests. He also said that the contractors have pending responsibilities, yet unpaid by Government.
Olonya cited also cited tax penalties to the contractors due to delays in remitting Value Added Tax which has forced contractors’ accounts to be seized, as well as loss of confidence in them by commercial banks financing their work.
He appealed to Parliament to intervene to have them paid their arrears of the services rendered. He also mentioned that Ministry of Works and Transport, Ministry of Water and Environment, Ministry of Lands, Ministry of Health, Ministry of Education and Sports, and various district Local Governments had also delayed payments to local contractors.
Responding to the Concerns, UNRA Executive Director, Allen Kagina attributed the outstanding arrears to budget cuts in the sector which had constrained UNRA from meeting its payment obligations.
Kagina who was presenting a paper to the committee on the impact of poor cash flow on the implementation of NDP III projects said that the COVID19 pandemic was to blame partly which greatly affected revenue performance in the Financial Year 2019/20, 2020/21, and 2021/22.
The Executive Director said the authority has a deficit of UGX 573.3 billion, with UGX 414.15 billion needed for development projects and UGX 159.17 billion for maintenance projects.
She was concerned that construction firms were likely to lose interest in contracts due to the non-payment and delayed payment of the contractors.
She appealed to Government to release 100 percent of the annual budget to mitigate the negative impact of budget suppression on the road network. She also proposed for review in the procure,ment process that could see all new procurements stopped and priority is given to maintenance activities.
State Minister for Works. Hon. Musa Ecweru, who had told the committee that the President expressed discomfort with budget cuts on the sector, noting obstacles in the chain of work.
MPs were concerned that the delay to clear these arrears was likely to stall the ongoing road construction projects.
Ntoroko District MP, Hon. Gerald Rwemulikya was concerned that the non payment of contractors and delayed release of funds for infrastructure construction was greatly affecting progress in development. He said the contractors in Ntoroko have not gone on ground because they have no funding.
Mawokota County South, Hon. Yusuf Nsibambi supported the idea to have more resource allocation to UNRA to resolve the matter. He said that there is no development without funding.
Bugabula County South MP, Hon. Maurice Kibalya proposed to have the committee meet the President over the matter. He said that it is only the President who has the solution for the matter.
“Let us make a resolution to schedule an appointment to meet the constitutional Minister of Finance who is President Yoweri Museveni. Let us take him through the cries of the people and let him read these documents,” Kibalya said.
Namutumba District MP, Hon. Mariam Naigaga supported the idea to have the committee interface with the President and develop ways to better budget allocation to the works and transport sector.