KAMPALA- The Executive Director, Uganda National Roads Authority (UNRA), Allen Kagina has revealed that Ugandan taxpayers are incurring interest of Shs250 Million daily on unpaid works and services carried out by contractors and suppliers.
“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.
She made the revelation while appearing before Parliament’s National Economy Committee, during the consideration of the loan request to borrow Shs324.922Bn for the construction of Laropi-Moyo-Katuna- Kamuganguzi Road Project, where Denis Oguzu raised concern over the abandoned projects in the country and the interest accrued to the contractors.
Oguzu remarked, “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. What is happening to this project, let us get real about this country. We can’t continue being in deceit and incur costs on Ugandans.”
The development comes at the time the Auditor General in his December 2023 report to Parliament revealed that Uganda was incurring fine to a tune of Shs2.2Bn through interest charges on delayed payment to project contractors, with the financial statements of both UNRA and Ministry of Works and Transport, recording an outstanding payments amounting to Shs804.26Bn.
According to the Auditor General, out of the Shs804.26Bn, UNRA accounts for the lion share of the accrued debt worth Shs588.77Bn, while the Ministry of Works and Transport’s share stands at Shs215.49Bn, thus translating into a daily interest payment of Shs1.61 for UNRA and Shs590.38 million for Ministry of Works and Transport.
The Auditor General warned that the long outstanding payables is an indication of poor budgeting and causes a risk of litigation and payment of penalties (Interest) for delayed payments, citing that by 30th June 2023, UNRA paid out Shs11.93Bn in-respect of interest charges for the Interim Payment Certificates (IPCs) which were not paid in the agreed timelines.
