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National Economy Committee approves UGX 1.7 Trillion for Oil roads

FILE PHOTO: Oil road

Kampala, Uganda | THE INDEPENDENT |  The Parliamentary Committee on National Economy has approved a loan request of 1.7 Trillion shillings (USD 456.37m) for the upgrade and construction of national oil roads.

The loan request was presented in May this year by the Minister of State for Finance in Charge of planning, David Bahati, and is to be financed by the Exim Bank of China.

The roads totaling 363 kilometres will include design and construction of Masindi-Kasanja/Park Junction, Tangi (Packwach) Juction-Paraa-Buliisa Road, Wanseko-Bugungu Roads, Hoima-Butiaba-Wanseko and and Buhimba-Bulamagi-Igayaza-Kakumiro.

China Exim Bank will cover 85% of the commercial contract for each package and Government will finance the remaining 15 %.

The move to develop the roads is meant to facilitate the first commercial oil production by 2020.

Now the National Economy Committee chaired by Syda Bbumba has approved the loan, on grounds that after visiting the oil region and seen the progress of the works having finished roads will have a greater impact on the economy.

Bbumba says there is a strong commitment to ensure that the works are completed on time, despite the challenges of land compensation, failure to implement local content due to the high attrition rate of local contractors, cash flow constraints that have affected the flow of work among others.

“The expedited approval of the loan is critical because the pre-financing ended in April 2019 and was extended to July 2019 which also expired and the outstanding certificate from July 2019 will start attracting interest.” Bbumba notes in a committee report.

Bbumba however says in the report that Government Agencies should desist from making commitments on behalf of Government before seeking approval of Parliament; and in future, if any individual or entity commits Government in such a manner, they should be held personally liable and should be dealt with in accordance with the law.

Bbumba’s also asks Government to work first on land acquisition as it is impeding projects.

“Since land acquisition lies on the critical path for the implementation of oil roads, Government should ensure that funds are ring-fenced and always available before contracts are signed, to make timely payments to the Contractors and project affected persons respectively so that project deliverable are not delayed.”

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