The executive director, Uganda national Roads Authority Allen Kagina has revealed that Ugandan taxpayers are incurring interest of 250 million shillings daily on unpaid works and services carried out by contractors and suppliers.
Kagina explained that the interest comes from the debt UNRA has with the contractors.
She made the revelation while appearing before Parliament’s National Economy Committee, during the consideration of the loan request to borrow 324.922 billion for the construction of Laropi-Moyo-Katuna- Kamuganguzi Road Project.
“The interest comes as a result of the debt we have, the outstanding IPCs to contractors and suppliers. It changes because when we got first quarter, we paid off a little bit of the debt, but of course we accrue new debt. It is currently growing, but that also changes daily, but it is currently growing at Shs250M per day,” explained Kagina.
During the meeting Denis Oguzu Lee – Maracha Mp raised concern over the abandoned projects in the country and the interest accrued to the contractors.
Denis Oguzu Lee wanted to know if the Ministry of Finance has failed to meet their obligations which is why costs are rising highly.
“UNRA continues to accrue interest because they aren’t doing something. How do these costs arise on Government? Is it because the Ministry of Finance is failing to meet their obligations? Because every day, costs are accruing, contractors are moblised, even that road Koboko-Yumbe that the Minister talked about, you took the contractor there, you deceived the West Nile people, the contractor has escaped, there is no one on ground.” Oguzu remarked,
The development comes at a time the auditor general in his December 2023 report to Parliament revealed that Uganda was incurring a fine to the tune of 2.2billion shillings through interest charges on delayed payment to project contractors, with the financial statements of both UNRA and Ministry of Works and Transport, recording outstanding payments amounting to 804.26 billion shillings.
The Auditor General warned that the long outstanding payables is an indication of poor budgeting and cause a risk of litigation and payment of penalties for delayed payments, citing that by 30th June 2023, UNRA paid out 11.93billion in respect of interest charges for the Interim Payment Certificates which were not paid in the agreed timelines.
