KAMPALA, Uganda—The Parliament of Uganda’s committee on National Economy has declined to grant government permission to borrow JPY (Japanese Yen) 5.706 billion (approx. $ 49.19 million) from the Japan International Cooperation Agency (JICA) but instead advised her to borrow JPY 3.891billion for the completion of construction works of the New Bridge across the River Nile at Jinja.
In their submission to the house, the Committee said: “The additional amount required to complete the construction works at the new Nile Bridge is over stated by JPY 1.815 billion. This is because the cost of JPY depreciation against the USD is estimated to be JPY 3.077 billion, while additional cost resulting from higher bid prices is JPY 0.814 billion. This totals to JPY 3.891billion, lower than what is being requested for,” Hon. Bbumba Syda Namirembe, the Committee Chair person.
The request was presented to this House by the Hon. Minister of Finance, Planning and Economic Development on May24, 2017 and accordingly referred to the Committee for consideration.
The committee observed that JPY 6.174 billion has been disbursed as by the end of June 2017 out of the original loan of JPY 9.198 billion which represented a disbursement rate of 67% with less than one year to end of project. This also implies that 33% of the initial loan remains undisbursed.
The committee therefore advised that with 18% of the time remaining for the project to end, only 43% of the project has been executed, leaving road and tourism infrastructure outstanding. The longer it takes to complete the project, the higher the risks of facing higher costs in completing the project.
The rise in the project cost which has pushed government to borrow additional funds was caused by among other things; delay in obtaining clearance of project goods by URA (Uganda Revenue Authority); delay in issuance of work permits to foreign workers by Government; and lack of skilled labour specialized in bridge technology.
To this end, committee recommends that government develops technical skill transfer programs in all projects contracted to foreign companies to facilitate development of a critical mass of local skilled labour to be used to maintain the established infrastructure. In this case, consultants should provide onsite training /knowledge transfer to UNRA counterpart-t project engineers on the various supervision activities of the bridge works at no additional cost.
They also advised URA to establish a clearance system for government project goods to reduce delays in implementation of projects.