The Parliamentary Committee on National Economy has approved a loan request of USD 456.37 m (1.7 trillion shillings) for the upgrade and construction of national oil roads.
Oil and Gas Infrastructure Development in Uganda
The Parliamentary Committee on National Economy has approved
a loan request of 1.7 Trillion shillings (USD 456.37m) for the upgrade and
construction of national oil roads.
The loan request was presented in May this year by the Minister of State for
Finance in Charge of planning, David Bahati, and is to be financed by the Exim
Bank of China.
The roads totaling 363 kilometres will include design and construction of Masindi-Kasanja/Park
Junction, Tangi (Packwach) Juction-Paraa-Buliisa Road, Wanseko-Bugungu Roads, Hoima-Butiaba-Wanseko
and and Buhimba-Bulamagi-Igayaza-Kakumiro.
China Exim Bank will cover 85% of the commercial contract for
each package and Government will finance the remaining 15 %.
The move to develop the roads is meant to facilitate the first
commercial oil production by 2020.
Now the National Economy Committee chaired by Syda Bbumba
has approved the loan, on grounds that after visiting the oil region and seen
the progress of the works having finished roads will have a greater impact on the
Bbumba says there is a strong commitment to ensure that the
works are completed on time, despite the challenges of land compensation, failure
to implement local content due to the high attrition rate of local contractors,
cash flow constraints that have affected the flow of work among others.
“The expedited approval of the loan is critical because the pre-financing
ended in April 2019 and was extended to July 2019 which also expired and the
outstanding certificate from July 2019 will start attracting interest.” Bbumba
notes in a committee report.
Bbumba however says in the report that Government Agencies should desist
from making commitments on behalf of Government before seeking approval of
Parliament; and in future, if any individual or entity commits Government in
such a manner, they should be held personally liable and should be dealt with
in accordance with the law.
Bbumba’s also asks Government to work first on land acquisition
as it is impeding projects.
“Since land acquisition lies on the critical path for the
implementation of oil roads, Government should ensure that funds are ring-fenced
and always available before contracts are signed, to make timely payments to
the Contractors and project affected persons respectively so that project
deliverable are not delayed.”