COSASE Directs Chinese Firms to Refund Compensation Money

TAbdu Katuntu, the Committee Chairperson, directed the contractors to transfer the money to UNRAs Kampala Station Account No. 9030006387976 in Stanbic Bank by close of business today.
Chinese Contractors appearing before parliament's committee on Commissions, Statutory Authorities and State Enterprises.

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The Committee on Commissions, Statutory Authorities and State Enterprises-COSASE has directed five Chinese firms to refund the money advanced to them by Uganda National Roads Authority-UNRA for compensating Project Affected Persons - PAPs.


The affected firms include China Railway 18th Group Shillings 14 billion, China Railway No.3 Group Shillings 5.5 billion, Zhongmei Engineering Shillings 272.9 million, China Railway No.5 Group Shillings 8.4 billion and Chongqing International Construction Company Shillings 3.5 billion.  



The firms were contracted by government to undertake the construction of Musita-Lumino-Busia, Kanoni-Sembabule-Villa, Olwiyo Gulu, Gulu-Acholibur and Acholibur-Musingo respectively. UNRA advanced the companies Shillings 47.7 billion to compensate the project affected persons in vain.


While appearing before COSASE, the firms confessed to have been fixing part of the money to earn interest. The committee also learnt that the contractors would also invest part of the money in their personal businesses as they awaited payment instructions from UNRA.



The contractor's accounts in different banks have since been frozen on the committee orders. As a result, Abdu Katuntu, the Committee Chairperson, directed the contractors to transfer the money to UNRA's Kampala Station Account No. 9030006387976 in Stanbic Bank by close of business today.

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Earlier on officials from China Railway No.5 Group requested the committee to give them one week to refund the money, saying it is being held at their headquarters in China.

However, the Committee rejected the request, saying the contractor violated their agreement with UNRA, which clearly stipulated that the money be kept in a Ugandan bank.


MP Katuntu then directed UNRA to present the guarantee it had with China Railway No.5 Group, which was presented by Mary Kamuli Kuteesa, the Legal Director UNRA.

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Theodore Ssekikubo, the Lwemiyaga County MP suggested that the committee takes further action against the contractor. In his response, Katuntu said the matter would be discussed in their next meeting with UNRA after the money has been recovered from the contractors.


The committee investigations were triggered by the 2015 Auditor General's report, which showed that Shillings 47.7 billion advanced to the contractors for the compensation of projected affected persons, was unaccounted for, adding that there was no status report to verify the progress of compensation. 



UNRA then presented documents to COSASE indicating that only Shillings 15 billion was paid out by the contractors to the project affected persons. However, the Committee tasked UNRA to establish whether the said money was indeed paid to the beneficiaries since the payment isn't reflected on the bank statements before the committee.



In its audit report presented before the committee this afternoon, UNRA confirmed irregularities in the operations of funds. According to the report, UNRA instructed the firms to pay Shillings 19 billion of the Shillings 47.7 billion leaving a balance of Shillings 30.2 billion.