Members of Parliament on the National Economy Committee have
threatened to block loan approvals for infrastructure projects until the government
releases counterpart funding for several projects that have stalled.
The MPs sounded the warning while meeting the Minister for Water and
Environment Sam Cheptoris on Wednesday to receive a report on the progress of
external loan funded projects in the water and environment sector in the last
The committee chairperson Syda Bbumba noted that several projects have stalled
despite the loans being approved due to delays by the government to release
funds it had committed towards the projects.
Bbumba accused the ministry of lying to Parliament by stating funds are
available whereas not.
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She noted any delay in project implementation has a significant effect on the
economy. She suggested that approval of loans be suspended until the matter of
counterpart funding is sorted.
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Cheptoris, however, blamed the Finance Ministry for not releasing funds.
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The Kilak North MP Anthony Akol noted that the minister had made a
genuine observation and it was the committee’s duty to invite the finance
ministry for an explanation, he, however, supported Bbumba’s suggestion to
suspend borrowing until the issue was fully addressed.
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Most of the funds are meant for compensating Project affected Persons and
Bbumba says it is a very high cost which affects project implementation.
Commissioner Gilbert Kimanzi appealed to the committee not to
suspend loans arguing that usually, project implementation proceeds even
without funds for compensation as long as consent agreements have been signed
with affected persons. He notes that compensations are made in batches until
all the affected persons have been compensated by the end of the project.
He said the African Development Bank is open to this arrangement before a
project is commissioned and even the World Bank has come on board and agreed to
flag off projects as long as there is part compensation of Project affected Persons.
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Among the projects that have stalled due to delayed remittance of counterpart,
funds is the Kampala Sanitation Programme Phase II financed by the African
Development Bank to a tune of 26.8m Dollars, the project was meant to end in
May this year.
Also affected is the 76.7m Dollar Farm Income Enhancement Project 2 financed by
the African Development Bank. This project is now awaiting an official request
for an 18-month extension from the Ministry of Finance.