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Hawk-eyed MPs throw out finance Minister’s supplementary request

The Finance Minister Matia Kasiaja (left) consults with his Director for budget Kenneth Mugambe (center) and the UNOC CEO Proscovia Nabbanja

Kampala, Uganda | THE INDEPENDENT |  For the second time in two months, members of Parliament’s Budget Committee have humiliated Finance Minister Matia Kasaija over his baffling requests for funding.

Late January Kasaija’s request for sh481 billion shillings to recapitalise Bank of Uganda was thrown out and the central bank also came out to deny requiring the money. Now members of the Budget Committee have dismissed the Finance Minister over several irregularities surrounding the Supplementary budget request to finance government’s investment in the East Africa Crude Oil Pipeline Project (EACOP)

The Minister in the company of the Director Budget Kenneth Mugambe appeared before the committee chaired by Kachumbala County MP Patrick Isiagi on Tuesday to offer justification for supplementary schedule 5 which totals to US$130m (Shillings 481bn).

One of the discrepancies that MPs highlighted was the fact that the supplementary Budget request schedule 5 had been tabled under a non-existent vote. The request had been made under vote 311 which is a vote previously belonging to the Uganda National Oil Company (UNOC) that is now receiving funds under a subvention from the ministry of finance.

The anomaly was spotted by the Kumi County MP Charles Ilukor who noted that the issue was highly irregular and one which the committee could not ignore.

Isiagi noted that the only solution to the issue was for the minister to return before Plenary and retable a correct supplementary budget schedule with the corresponding vote number of 008 belonging to the finance ministry which will be receiving the funds.

The minister had earlier told the committee that the funds are required before the end of March 2021 to enable Uganda National Oil Company (UNOC) sign of the Final Investment Decision (FID), the minister told the committee that negotiations for the shareholders agreement and the Tariff and transportation agreement for EACOP will be concluded prior to end of March.

In his justification for the Supplementary Budget the minister told the MPs that following the signing of the shareholders agreement, all parties are required to honor their obligations related to historical costs and equity contribution.

Kasaija disclosed that government’s 15% equity contribution through UNOC is US$213m of which US$70m is required as initial contribution and $60m required to settle historical costs.

However the minister faced stiff resistance from committee members who demanded to know why the ministry was seeking funds to finance a project for which an agreement was yet to be signed.

Muwanga Kivumbi the Butambala county MP observed that the correct procedure was to bring any agreement to Parliament for approval before funds are approved.

The Kumi County MP Charles Ilukol noted that the minister had omitted to disclose to MPs the source of funding for the supplementary schedule.

The MPs were also skeptical about approving $60m for historical costs which according to the minister are cost incurred on Land acquisitions/compensations, studies, surveys and Front End Engineering Designs.

Dokolo Woman MP Cecilia Ogwal stated that the minister should provide details of the land acquisition and compensation, she also queried the funds required to cover costs for studies and surveys.

The committee declined to listen to any more explanations by the minister and Isiagi asked him to choose a date that he felt would best be appropriate for him to return with all the relevant documents and respond to the MP’s concerns.

The minister said he needed to consult first before committing to return before the committee.

 

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