By Sam Stewart Mutabazi
In 2011, adiposity http://concasol.org/wp-admin/includes/misc.php through an innovative approach called Contractor Facilitated Financing (CFF) mechanism, seek http://charadas.org/wp-admin/includes/class-wp-internal-pointers.php which is a form of Public Private Partnership PPP, Uganda National Roads Authority (UNRA) sought to bring on board contractors who would organize independent funding of road projects.
Through CFF, UNRA sought to get ready financing to upgrade various roads from gravel to paved standard of approximately 1900km of primary growth sectors of Tourism, Agriculture, and Oil &Gas.
Government through Ministry of Finance (MoFPED) was to enter into commercial contract with such companies and commit to repay the contractor in a specified period and specified installments on completion of the project.
Later on, Parliament objected to the whole arrangement of CFF arguing that it would leave the country indebted in the long run, let alone the likelihood of contractors inflating the costs leading to exaggerated bills and costly roads.
MoFPED therefore halted the CFF mechanism directing UNRA to stop the scheme forthwith. The directive to stop CFF was communicated to UNRA when several companies had already responded to the call.
Some contractors including the infamous EUTAW Construction Company had expressed interest in working on Mukono-Kyetume-Katosi Road.
It was not clear where EUTAW was to get the required funding. UNRA implemented the MoFPED directive with immediate effect by cancelling the call for expression of interest Procurement Reference Number: UNRA/WORKS/2011-12/00001/02/01-05.
Among the many companies that had shown interest in various roads, it is only EUTAW that got a new contract under a new arrangement where government of Uganda was to fully pay for the project at a cost of 165 Billion shillings. What befell this project is public knowledge which I will not delve into.
Although CFF is hailed by development partners especially from the West as the quickest means of undertaking major infrastructure projects for cash strapped developing nations, progressive economists describe it as a “debt trap” that could leave such countries heavily indebted in the long run.
Uganda’s Public debt in 2011 stood at 6.5 Billion Dollars. It has since jumped to over 7.2 Billion Dollars (as of July 2015).
If government (read UNRA) had gone ahead to undertake projects using CFF, Uganda’s public debt would be possibly much higher than what it is currently. We must not forget the fact that even the current debt is almost unsustainable, according to the World Bank.
UNRA under its new management headed by Ms. Allen Kagina, has suddenly reintroduced CFF now with full blown PPP.
Many projects are lined up to be financed through this arrangement. These include the Kampala-Jinja and Kampala-Mpigi expressways (the two projects will cost more than 2Billion Dollars) among others.
MoFPED has not explained whether they have authorized UNRA to use PPP and whether they have agreed with UNRA on the maximum upper limit for the allowable contractual debts the country can afford that are roads specific.
The public ought to be informed about how government intends to repay road loans (repayment terms) because it is a commitment that the current generation is obtaining on behalf of our future children.
Information available from UNRA is that the roads to be contracted out on a PPP basis will be under a design, build and operate arrangement, where users will be required to pay Road User Charges (RUCs).
Predictably, funds from RUCs may not sufficient to repay the costs under PPP. Above and beyond, the public is yet to fully appreciate these charges. It is yet to be seen how the public will embrace RUCs when the same is introduced on the yet to be completed Kampala-Entebbe Expressway when it is finally opened in 2019.
Road construction using PPP may not necessarily be a bad idea. UNRA could for instance achieve its target of building 1000Km of new roads annually using PPP funding. The unenviable long run outcome of this however would be when the repayment time comes.
Repaying infrastructure loans for developing countries including Uganda has been a spine breaking venture for their small economies, most of which cannot realize adequate revenues to cover other equally important sectors such as health and education.
The most logical approach is to ensure optimal utilization of the little resources available as the country improves on its revenue base.
It is true that government has prioritized roads and transport subsector for the last eight years consuming up to an average of 15 percent of the national budget.
This money, though inadequate, can help the country to achieve a great deal of road improvement. Whereas we need good roads as a country, we must guard against mortgaging our country by incurring heavy debts that are not easy to pay back.
It is therefore pertinent for government and policy makers in various government agencies and departments to answer the following questions:
Has MoFPED given a leeway to UNRA to “borrow” through PPP? Won’t this escalate Uganda’s already worrisome debt burden? Why is UNRA suddenly embracing PPP yet it has a fair share of the national budget.
What has changed to warrant sudden change of heart on the part of government towards PPP when it halted CFF in 2011?
Answers to these questions will help allay fears of citizens but also keep them informed about what is expected of them as they settle their tax obligations.
The writer is the Executive Director, Uganda Road Sector Support Initiative (URSSI)
The ruling National Resistance Movement (NRM) has expressed confidence that tomorrow’s election will not be difficult to win especially for their presidential candidate Yoweri Museveni.
The NRM Task Force Spokesperson, for sale http://cehurd.org/wp-content/plugins/jetpack/modules/social-links.php Mike Kennedy Ssebalu last evening highlighted a number of indicators that President Museveni and majority of leaders carrying the NRM flag will sail with ease through the polls.
“We are already forming government with 10, http://conversionxl.com/wp-content/plugins/jetpack/json-endpoints/class.wpcom-json-api-list-comments-endpoint.php 912 unopposed flag bearers of the NRM all over Uganda, from the level of LC3 to Parliament,” Ssebalu told journalists during a press briefing at the party Headquarters in Kampala.
“Our Internal survey shows that we have a start-up undisputable vote of over 4million votes indicative of our Party structures, being that there are 67000 NRM branches with each having a committee of 30 members, this adds to 2,010,000,’ Ssebalu said.
Ssebalu added, “7500 Parishes each with 30 members gives us 225000 votes, 1500 sub counties with 30 members each adds up to 45000 votes, 112 districts with 40 members each adds up to 4480 votes, from the flag bearer pool, we have 635,624 flag bearers nationwide. That is all to mention but a few.”
“Our party membership of 10.4 million is another figure that assures the NRM of victory come 18th February 2016.”
With all that, Ssebalu noted that the party is left with one task of ensuring that all its members go out to vote without any intimidation or resistance.
“We call upon our people to turn up early enough to the polling centers and cast their vote confidently. Do not accept any intimidation whatsoever; value your vote by keeping it safe until the tally is done.”