)
)
The Ministry of Works and Transport is currently facing a massive financial burden, struggling under the weight of an inherited debt amounting to UGX414.5 billion from the defunct Uganda National Roads Authority (UNRA).
The lingering debt is now threatening to halt ongoing road projects across the country, exacerbating an already challenging situation in the vital infrastructure sector.
The Permanent Secretary of the Ministry of Works and Transport, Waiswa Bageya, voiced these concerns during an appearance before the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE).
Bageya pinpointed a critical miscommunication from the Ministry of Finance, Planning and Economic Development as a key factor contributing to the escalating crisis.
)
)
)
He specifically referenced a recent announcement by the Secretary to the Treasury, Ramathan Ggoobi, regarding the release of funds for the current quarter.
"Recently, when the Secretary to the Treasury, Ramathan Ggoobi, announced the release of funds for this quarter, I believe there was a mistake where he stated that UGX992 billion had been released to pay creditors," Bageya explained.
"I've tried to reach him to correct that error, but he hasn't responded. That money was for external financing, not government funds. So, creditors are already knocking at our door asking where their money is."
Permanent Secretary of the Ministry of Works and Transport, Waiswa Bageya
Mounting Arrears and Abandoned Sites
Emily Binyerekeho, Assistant Commissioner, Accounts at the Ministry of Works, provided an updated figure on the outstanding debt, confirming that as of June 30, 2024, UNRA had an outstanding debt of UGX997.7 billion.
While UGX583 billion was paid in the last financial year (2023/24), a substantial UGX414.5 billion remains unpaid. Bageya revealed the dire situation had necessitated the Ministry to issue a Cabinet memo detailing the escalating arrears in the road sector.
"We wrote a cabinet paper to explain how grave the situation was regarding payments to creditors. Most contractors had abandoned sites," he stated.
"Although the Ministry eventually received a supplementary budget that eased the situation, Bageya noted that "UGX400 billion is still a significant amount of money."
Costly Delays and Unbudgeted Expenses
COSASE's inquiry into UNRA's debt situation was prompted by revelations from the Auditor General, Edward Akol. As of June 30, 2024, the former UNRA management disclosed UGX997.722 billion in payables, with a staggering UGX781 million outstanding for over five years.
Akol further noted the costly consequences of these delays, noting that UGX27.660 billion in interest charges had accumulated on unpaid Interim Payment Certificates (IPCs). By November 30, 2024, ten contractors with outstanding IPCs worth UGX299.32 billion had suspended their works.
"For instance, UNRA incurred interest charges totaling UGX27.66 billion on overdue Interim Payment Certificates (IPCs) that were not settled within agreed timelines," Akol explained. He concluded that "These delays resulted in an average daily interest payment of UGX0.075 billion and a monthly loss of UGX2.305 billion.
These interest costs were unbudgeted for and diverted critical funds away from UNRA's core mandate of executing road construction projects." The ongoing financial challenges underscore the urgent need for a comprehensive resolution to prevent further disruptions to Uganda's vital road infrastructure development.