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Archive for the tag “Kampala-Jinja Expressway”

Interesting findings from the AG report on “Central Government and Statutory Corporations” – Part One!

Ugandan shillings

Here I will Travers through the report of Auditor General of Uganda’s Annual Report for the year ended 30th June 2015. This is on: “CENTRAL GOVERNMENT AND STATUTORY CORPORATIONS”. I will take the quotes and stories that seem to show parts of how the Government of Uganda works and what the Auditor General have cared about addressing in this specific report. Take a look! This here is Part one!

What it contains:
“This is Volume two of my Annual Report to Parliament and it covers financial audits carried
out on Central Government Ministries, Departments, Agencies, Universities and Uganda
Missions abroad” (…)”Section 2 presents my findings and audit opinion on Government of Uganda Consolidated Financial Statements including major observations” (P: 25).

kampala road work

Nugatory expenditure:
“Government paid UGX.26.1bn during the period under review as delayed settlements of obligations arising from contracts for construction services, Court awards, and contributions to international organizations etc” (P: 34). Comment: The government has no issues wasting giant sums of settlements it seems, shouldn’t’ there be away to not use the money on these settlements?

Unsustainable pension liability:
“The Ministry of Public Service recorded an outstanding pension and gratuity liability of UGX.199,255,907,539 as at 30/6/2015 (up from UGX.108,681,159,047 as at 30/6/2014). It was noted that the gratuity and pension arrears continue to accumulate, a fact which the Accounting Officer has attributed to inadequate budgetary provisions over the years” (P: 35). Comment: There been press release from the Ministry of Finance, Planning and Economic Development during 2015 doesn’t seem like they want to fix it, instead blame the pensioners. Well, they have learned from their master right?

Understocking of the Government petroleum strategic reserves:
In 2012, the Government of Uganda and a private petroleum company entered into a concessional agreement to refurbish, restock, maintain and manage the petroleum strategic reserve facility at Jinja. Despite the concession requiring the operator to ensure that 40% (12million litres) of the storage capacity of the products is available at all times, I noted during inspection in September 2015, there was only 274,000 litres of petrol and 331,000 litres of diesel in stock compared to the required stock levels of 20,000,000 and 10,000,000 litres respectively” (P: 38). Comment: Doesn’t seem like they follow the guidelines from 2012 and proves that the Governmental agencies doesn’t follow the plans they have or have the procurement to buy what their supposed to. This here is just barely enough considering the use of oil and diesel!

JinjaRoad Roundabout Kampala

Construction of Kampala-Entebbe expressway:
“It was observed that the unit cost for the Kampala-Entebbe expressway was US$ 2.315 million per lane kilometre while the similar expressway was US$ 1.204 million per lane kilometer” (…)”This is less than half of the cost of Kampala-Entebbe Expressway which is US$.9.261 million per Km” (…)”However, a review of the services provided by the consultant’s revealed duplication of activities as the originally recruited private firm serves the same purpose as the international firm” (P: 38-39). Comment: This here has been discussed and been put out there, but still proves the misuse of funds, especially when one of the reasons is that you have two companies that have the same role on the site, instead of only one, and that adds the price per kilometer of roads.

Mismanagement of funds under the Ministry of Local Government (MoLG):
“the diverted funds revealed that UGX.3,827,011,454 remained unaccounted for and UGX.635,621,910 was questioned due to inappropriate accountabilities” (P: 39). Comment: Unaccountable use of funds is a beauty and proves that funds have been used without waivers or accounted for; where it has been used is something that we can ask, but they could by Kit-Kat bars in Masindi or extra bottle of cokes in Lira for all we know.

Abim Hospital 2014 P3

Fixed budget allocation for essential medicines and health supplies:
The annual budget allocation of UGX.218bn for essential medicines and health supplies to all health facilities across the country has remained constant since 2011/2012 despite the remarkable increase in the number of patients” (P: 42). Comment: That the money are stagnate while the amount of patience goes up shows quickly; why the hospitals doesn’t have the necessary medicine? That is the simple reason why they don’t have enough.

Regional coordination and monitoring framework for Northern Corridor Integration
Projects:
For example amounts totalling to UGX4.2bn was disbursed to fund the power interconnection and the Hoima-Lokichar-Lamu oil pipeline. However, the protocols do not provide for regional coordination and monitoring as well as the audit framework to provide an independent assurance on the utilization of joint funds” (P: 43). Comment: Money to a project that don’t have a framework for the regional coordination and can’t utilization of the funds, that means they are just sitting in the fund, without any use or monitoring it.

Compensations of Project Affected Persons (PAPS):
“Review of the compensations for the Project Affected Persons (PAPs) on the two projects of Mukono-Kyetume-Katosi road and LPC Busega revealed inconsistencies in the names of the PAPs appearing in the Chief Government Valuers report and those compensated” (…)”A sum of UGX.1.3 bn paid without resolving the inconsistencies was questionable” (P: 44-45). Comment: That already over-expensive road project that has gone over margin and had issues with the contractors of the road-building. So that the government haven’t compensated the once that lost land where the road where built. Therefore the project is even more expensive, since this will be add-ons to the ones that already registered and billed for.

Budget performance-Budget shortfall:
“21 entities budgeted to receive UGX. 2,272,017,747,273, out of which UGX. 1,481,698,945,173 was received translating into a 65% out-turn for the financial year. This left a funding gap of UGX. 790,318,802,100 (35%)” (P: 55). Comment: This here proves how the budget is underfunding and not procuring from the Ministry of Finance, Planning Economic Development (MoFPED) to deliver the cash in-due time to the projects and other state entities that supposed to get funding to do their work. The ministry with biggest shortfall was the Ministry of Energy and Mineral!

MoFPED – Payment of avoidable interest on VAT:
“It was noted that as of November, 2014, the outstanding VAT obligations for BIDCO stood at UGX.744,420,170, included in this figure was late payment interest charge of UGX.168,747,557. Accordingly, a sum of UGX.700,000,000 was paid to URA towards settlement of the tax arrears” (P: 93). Comment: Bidco got to pay less to cash to URA then expected in a settlement, instead of paying everything they needed as they hadn’t cleared in their VAT. So the government was not getting what they we’re entitled so the company of BIDCO got off cheap.

AfDB STATS

Payment of the fourth instalment under ADB Subscription:
“It was noted that the payment of Uganda’s 4th instalment of UDS.1,293,299 which became due on 16th March, 2015 had not been made. As a result, the callable shares related to the missed instalment had been suspended in line with the Board of Governors resolution on the sixth general capital increase of the bank meeting” (P: 95). Comment: This here proof that they don’t take the place in the Pan-African Bank institution, only take the loans from African Development Bank, but not taking charge in paying dues to it.

Presidential Initiative on Banana Industrial Development (PIBID):
“It was noted that the PIBID project has been operating without an approved strategic plan. The strategic plan is supposed to guide the budgeting process by creating integrated link with the annual work plans which feed into the budget to ensure effective service delivery and achievement of set project objectives” (…)”During the financial year 2014/2015, the PIBID project had a budget provision of UGX.9bn out of which only UGX.2.7bn was released as vote on account and as a result, activities worth UGX.6,682,145,000 were not under taken. (P: 100- 103). Comment: 6,3bn was not released so that is under the double, but not triple of the ones that has procured to the PIBID.

Department of Ethics and Integrity:
“Directorate’s approved structure/establishment indicated that whereas 60 posts were approved, only 46 had been filled by the year-end leaving 14 vacant” (…)”that withholding tax amounting to UGX.4,662,524 due to URA was not withheld from seven (7) service providers and as such, funds were not remitted. Failure to withhold tax exposes the entity to a risk of penalties and interest charges by URA which may lead to nugatory expenditure” (P: 111-113). Comments: This here proves the defaults on the hiring of people in the department and also mismanage off tax.

This here must been seen as interesting; the report is big, so there is more to come. This here will be series with many pieces as the actions of government is to interesting to NOT be put on blast. Peace.

Reference:
Office of the Auditor General – The Annual Report for the Year Ended 30th June 2015 – Central Government and Statutory Corporations 30th June 2015.

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KJE (Kampala-Jinja expressway): As expensive as it could be or more

JinjaRoad Roundabout Kampala

Kampala-Jinja Expressway KJE) the PPP road project that cost the double in 2 Years time:

Today UNRA put out a tender for the KJE or Kampala – Jinja Expressway. That will be a Public-Private Partnership, which means that the government project will be financially funding through the investors that will get back on their investment through the tolling of the commuters and traffic on the road after building the project/road. UNRA has the official follow-up of the KJE and will oversee that the company or companies that they keeps up with the set standards. Though it worrying to see how the numbers has gone up for the project from $ 0,5USD Billion in 2013 to Ministry of Transport set the contract for $ 1USD Billion on the same project. Here is the main quotes from different sources and I myself wonder if this in the re-up for a similar “Project 1034: Mukono-Katosi Road Scandal” with Corruption and also bad practices with financial issues since they did not follow “due diligence” on the contracts on that. But let’s hope, here is what that is out there now.

IMF reports in 2013 saying that the cost of the project would be $ 0,5USD Billions, that funding aren’t made with government money, but through PPP funding. This is all a part of the main issues which is this: “An additional investment of $200 million on the needed connectivity (e.g. roads, bridges) for the start of oil production in 2018 is also anticipated” (…)”Roads. The program mainly includes construction of roads linking Kampala with Jinja and with Mpigi, expected to start in FY2013/14 and be completed in five years at a cost of about $500 million each”  (IMF, 2013).

“According to the Uganda National Roads Authority (UNRA) spokesperson Dan Alinange, the government has hired the World Bank’s International Finance (IFC) as advisor to help in the tender process” (…)”The six-lane, 77km Kampala-Jinja road will be the first PPP road project in Uganda and the second toll road in the country after the $470m Kampala-Entebbe road that is currently under construction” (…)”Alinange added: “We want to reduce congestion on this corridor for Uganda. We are aware there is enormous appetite for this sort of project and that’s what gave us confidence to structure Jinja-Kampala as a PPP” (RTT, 2014).

“The project involves the development of a six-lane 77-km road project. The project aims to improve road infrastructure in Uganda, improve road safety and facilitate trade and tourism. The project will be developed on a design, build, finance and operation (DBFO) basis. The total project investment is estimated at around US$1 billion” (Martin, 2014).

“One of the roads is the Kampala-Jinja expressway estimated at about $800m (about sh2.13 trillion). The new road will help decongest the old Kampala-Jinja road that forms part of the Trans-African highway” (…)”Construction of the 80km state-of-the-art road is expected to commence in 2015. About sh200b has been earmarked for compensation of the affected people” (…)Eng. David Luyimbazi said: “The investor will recover the money through charging a toll fee from road users over a 20- 25-year concessional period.” (Ogwang).

Background from the WB:

“In 2011, PPIAF provided follow-up support to identify and prioritize potential PPP projects. Ten priority projects were identified, including the Kampala-Jinja road, which is now under implementation with the International Finance Corporation (IFC) appointed as the transaction advisor” (…)”In May 2014, IFC’s Advisory Services in PPPs signed an advisory agreement with the GOU, through the UNRA, to develop a 77 km greenfield expressway between Kampala and Jinja” (World Bank, 2015).

More from PPIAF:

“One of the priority projects – Kampala-Jinja – road is now under implementation with IFC appointed as the transaction advisor. PPIAF recently approved a grant in partnership with Trademark EA (TMEA) and IFC to support two main tasks: the development of a tolling policy and an investment appraisal guidance tool, and strengthening the Uganda National Roads Authority (UNRA’s) capacity to implement PPP projects” (…)“In May 2014, IFC’s Advisory Services in PPPs signed an advisory agreement with the GOU, through the UNRA, to develop a 77 km greenfi eld expressway between Kampala and Jinja with a possible extension to include the 17 km Kampala Southern Bypass. Together with the existing Kampala Northern Bypass the expressway would form a ring road around Kampala City. The project, with an estimated capital cost of $1 billion, will seek a concessionaire to design, build, fi nance, and operate the road as a tolled facility” (PPIAF, 2014).

KJE:

“The project involves the construction of a green field dual carriageway expressway between Kampala and Jinja. The road extends from the boundary of the jurisdiction of the Kampala Capital City Authority (approximately 3 km from the city centre) to Jinja town tying in with the proposed New Nile Bridge. Consequently the nominal length of the project road is about 77km. The existing road, which will remain as a free alternative is a class 1 asphalt paved road in a fairly good condition” (UNRA, 2014).

“The Uganda National Roads Authority (UNRA) is the implementing agency for the planned KAMPALA JINJA TOLL EXPRESSWAY. It will link the capital with the important industrial area of Jinja. Past plans have been for four to six lanes for the 77-kilometre road. Cost estimates have also varied from USD 700 million to USD 1 billion. There are reports that the ministry of transport will be floating a USD 1 billion Public-Private-Partnership (PPP) tender and that the International Finance Corporation (IFC) will be the lead financial adviser. Construction could commence in 2015 with commissioning in 2020. COMESA has declared it to be a priority Project that is an important component of the Mombasa-Kampala – Kigali northern corridor” (APA, 2014).

Progress on Capacity improvement projects around Kampala:

Kampala – Jinja Express Highway (Funded under PPP), 77km, Detailed Engineering design completed Construction will be financed under PPP. Transactions Advisor (International Finance Cooperation) is assisting in structuring the project into a bankable PPP Project. Tendering for financing and implementation is expected in May 2015″ (UNRA, 2015).

Here is the tender dropped from UNRA today:

UNRA - KJE P1UNRA - KJE P2

Also this:

Reference:

Africa Project Access (APA) – ‘Africa Project Newsletter: Issue 234’ (Nov. 2014) link: https://www.wko.at/Content.Node/service/aussenwirtschaft/NEWSLETTER-234-November-2014.pdf

Martin, Miguel – ‘MegaProject 334: Uganda to tender Kampala – Jinja Expressway next year’ (17.10.2014) link: http://infrapppworld.com/2014/10/megaproject-334-uganda-to-tender-kampala-jinja-expressway-next-year.html

IMF – ‘IMF Country Report No. 13/375: UGANDA FIRST REVIEW UNDER THE POLICY SUPPORT INSTRUMENT’ (Des. 2013) link: https://www.imf.org/external/pubs/ft/scr/2013/cr13375.pdf

RoadTrafficTechnology – ‘Uganda plans to float $1bn PPP tender for Kampala-Jinja road in 2015’ (17.10.2014) link: http://www.roadtraffic-technology.com/news/newsuganda-plans-to-float-1bn-ppp-tender-for-kampala-jinja-road-in-2015-4409054

Ogwang, Joel – ‘Govt joins World Bank to build $1.5b road projects’ link: http://www.newvision.co.ug/mobile/Detail.aspx?NewsID=641587&CatID=3

PPIAF – ‘PPIAF Supports Uganda’s Roads PPP Program’ (July 2014) link: http://www.ppiaf.org/sites/ppiaf.org/files/publication/Impact-Story-Uganda-Roads.pdf

UNRA – ‘Investor Teaser June 2014: Design, Build, Finance & Operate: Kampala Jinja Expressway (77km) & Kampala Southern Bypass (17km)’ (June, 2014) link: http://www.inspiratia.com/Content/Files/View.ashx?FileID=cb5ec032-d0e6-4218-a24e-c248fd2c6d19

UNRA – ‘ROAD INFRASTRUCTURE KEY TO DEVELOPMENT’ (2015) link: http://www.eagle.co.ug/ads/UNRA2015.pdf

World Bank – ‘Partnering to Support Uganda’s Roads PPP Program’ (25.09.2015) link: http://www.worldbank.org/en/news/feature/2014/09/25/partnering-to-support-ugandas-roads-ppp-program

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