Joint Communique on the Occassion of the State Visit to Uganda by Her Excellency Samia Suluhu Hassan, President of the United Republic of Tanzania, 10th – 11th May 2022 (10.05.2022)

Civil Society Coalition on Oil and Gas (CSCO) – Civil Society Statement on the Announcement of the Final Investment decision for Uganda’s Oil and Gas Sector (07.02.2022)

Ugandan and DRC CSOs’ Communique Rejecting Secret Agreements Signed for the Lake Albert Oil Project in Uganda (13.04.2021)

Joint Communique between the President of the Republic of Uganda and the President of the United Republic of Tanzania on the Implementation of the East African Crude Oil Pipeline (EACOP) Project on the 11th April, 2021 at the State House Entebbe, Uganda (11.04.2021)

President Museveni letter to Hon. Monica Azuba Ntege – Ruling out external or internal borrowing for development infrastructure (18.09.2019)

Another look into the Oil-Road Cost: “Package 2” Hoima-Butiaba-Wanseko Road!

In the newest report of Oil Roads, which is expected to borrow funds for. The China Exim Bank is supposed to be provider of 85 % of the cost of the operation and building of the roads in these projects. I will only look into one of them, as I have previously looked at this significant one.

This is the Hoima-Butiaba-Wasenko Road. A project that was supposed to start in 2015 and was clocking in funds from the state budgets in 2017. Back in 2015, the road was estimated to cost $126m USD. Today, with the recent report, the same road is costing $179,538m USD. That is jump of nearly $50m in a five years time. In addition, of these bloated funds, 85 % of it will be loaned from China and the rest 15% covered by the Government of Uganda (GoU).

In 2017, this project was designated the China Communications Construction Company (CCCC), which signed a deal in January 2016. However, by the time of the report 2019, it is another Chinese Company who has the contract. This is Chongqing International Construction Corporation (CRC) Ltd. With the recent contract, the loans are clearly getting direct back to the Chinese, as their corporations are the ones with the contracts to build. A clever way of borrowing and then getting returns.

With this mind, we can see the changes, see over the years how the price has changed. If Members of Parliament was afraid of the price per kilometre in the past. They should be now. As the changes of price on the same project has changed significantly. There is no doubt, that the Chinese government are getting added loans on each of the packages in this deal. As this is just one of the roads in question.

This is 111km is now costing 659,921,964,460.17UGX in Ugandan terms or 659bn shillings and that equals to about 5,9bn shillings. Therefore, the prices has sky-rocketed and the price per kilometre is abnormal and extremely costly. The overpriced asphalt and the consultation is in absurd levels. The previosly estimated price for this road was about 444bn shillings. Therefore, we can see rising price between the years in both currencies. About 200bn shillings growth in 5 years. 

To many cooks and too few ingredients. They are boiling soup on nails on this one. Wonder how this will end. As I felt in 2017, that the pricing of this particular road was a bit too much, but now they have just escalated it.

We can wonder whose eating, but someone is. We just don’t know who, because there been designated funds to build this one in the past and it has still not commenced. Surely, this road will be built, but at what point. However, with the added loans, the pressure should be on. Also, to secure the oil so it makes financial sense too. That the added value is there. It got to be. Because this project is over the top. This is the real OTT service, paid for by the Chinese and the tab is all taken by the Ugandans. Peace.

Uganda National Oil Company: Press Release (14.05.2019)

Uganda National Oil Company (UNOC): Dr. Josephine Wapakabulo resignation letter as Chief Executive Officer (13.05.2019)

UNOC Signs Memorandum of Understanding With CNOOC to Start a Partnership in Exploration in the Albertine Graben (05.09.2018)

The Uganda Budget Framework Paper FY2018/19 for Energy and Mineral Development is saying that the External Financing is the key for this Sector – Period!

The Budget Framework Paper for Financial Year of 2018/2019 for the Ministry of Energy and Mineral Development is really revealing how the financing of the sector is and how the state is involved with the manner. Also, how low-key the main factors are and lacking transparency is hitting the Energy Sector of Uganda. Not that is surprising, since the agreements, the licenses and the tenders are usually kept behind closed doors.

However, the main part of the Framework Paper is evident of the issues at hand:

The indicative budget ceilings for the Ministry of Energy and Mineral Development have been rationalised in line with the sector priorities and national priorities as communicated in the Budget Call Circular and in the Presidential Directives. The ceilings for Vote 017 for the FY 2018/19 are as follows: Wage Recurrent is UGX 4.23Bn; Non-Wage Recurrent is UGX 74,04Bn; GoU Development is UGX 307,84Bn and the Development Partner contribution is UGX 1,608.41Bn. Under Vote 123 ceiling is UGX 81.98Bn is for the GoU Domestic Development and UGX594.00Bn is from external financing” (Energy and Mineral Development, Budget Framework Paper FY 2018/19, 2018).

The building of vital infrastructure, the refinery, the pipelines and energy production facilities are all dependent on funding from abroad. If it is grants, loans or paid-in-full agreements done in secrecy. Because, there are more than the shadows of this budget framework paper. It is saying a lot and the votes for the future is showing the future too. That the Ugandan economy is prospering, as the budget are needing all funding from afar to be able to build needed infrastructure. Also, needs the grants for the Rural Electrification, the ones who the state has even borrowed to do.

Therefore, this Budget Framework Paper is showing the troubles ahead. This isn’t voting for better economy, know this is dependency and also proving how much the donors and partners are involved in making sure the economy gets addicted to it.

When it comes to the refinery, the details are clearly still in the wind: “The process of selecting of the Lead Investor is still progressing and the negotiations are ongoing between Government and the selected investor. The process is expected to be completed in FY 2017/2018. There after FEED and ESIA for refinery development will be undertaken with the Lead Investor on board” (Energy and Mineral Development, Budget Framework Paper FY 2018/19, 2018). So the selecting of it is not finalized, well, for some thought Russians had secured agreement and the reason for Museveni to visit Moscow. Clearly, that ship has sailed, we can wonder if Total or any other company would do this. As Total has the biggest chairs of licenses in the Lake Albertine Basin. Time will tell, but another proof of lack of transparency, when the Ministry has to write this.

Procurement Bottlenecks including lengthy bidding processes that require no-objections from the external financiers at each stage of execution. There is need for PPDA to revise guidelines for procurements relating to flagship projects. In addition, the following measures need to be considered: financing agreements are signed, project is almost ready to kick off. PPDA should reduce the administrative review timelines that sometimes stall progress” (Energy and Mineral Development, Budget Framework Paper FY 2018/19, 2018).

This here is initially following the guidelines of the First Amendment of the 1995 Constitution of 2017, the Land Amendment that the National Resistance Movement put forward before the Age Limit. That would fit the narrative of the Ministry and their wishes. It is like reading the same idea, to give more power to the state and able to land issues quickly.

What we can learn, also and which is important, these developments, these infrastructures projects couldn’t have been built if it wasn’t for external loans, externals grants or direct aid, if not on the license fees and the parts that is taxed. However, the grand amount and the majority of the projects needs the external funding.

This is not surprising, it is to be expected because Museveni doesn’t want to use his money. He want to spend other people’s money and also the money of the future. To benefit him today, that is why the deals are done in the secrecy…. We don’t know the reasons and the value of the licenses, the ones who is to build the refinery, even the grand agreement between the Corporations who will build the Pipeline. We know that certain companies has failed to build the dams and used bad material, but that is because of the Chinese Contractors has saved money, while being paid-in-full.

President Museveni blessed that deal and got scraps back. Time will tell, but this isn’t a good look. Not because I want it to be bad, but because the money says so. Peace.

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