Business
Gov’t to lose sh130m per day in road deal
Publish Date: Apr 10, 2014
Gov’t to lose sh130m per day in road deal
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By Pascal Kwesiga

The Government will lose over Sh130m per day to the contractor if the construction of Hoima-Kaiso-Tonya road is stopped, Court has heard.


The road project manager, Khalil Odongo, in his affidavit in support of an application by Uganda National Roads Authority (UNRA) seeking to overturn a recent interim order that stopped the constructions works said, government will have to pay over sh130 to the constructor if the order is maintained.

UNRA’s lawyers Alex Kibandama and William Tumwine pleaded with the deputy High Court registrar (Land Division), Michael Otto Gulamali, to set aside an earlier order he issued halting construction works saying completion of tarmacking of the 92kms road on time is key for the planned Oil and Gas production. The government plans to start producing Oil and Gas in 2017.

The government commissioned the tarmacking of the road two years ago to link the country to the vast oil reserves in the Albertine Graben and Kabaale – a proposed site for the 60,000 barrels per day oil refinery in Hoima district.

Kibandama said the road is crucial to national importance since its key in the development of Oil and Gas resources. “The monetary impact the stoppage of construction works will cause to the country is immense. The government will lose over sh130m to the contractor every day,” he argued.

Kibandama submitted that the project manager calculated the costs after establishing the amount of money the contractor will be spending on workers and hired equipment on a daily basis.  The freezing of road construction, the lawyer argued, would be a breach of contract on the part of government and the contractor would be entitled to lay time related claims.

He submitted that the government had already compulsorily acquired the land of the affected residents under the law and stressed the need for court to allow the contractor to continue building the road so that “The government can deliver a finished project by December 2014. Be mindful of the damage that will be caused if the order is maintained,”

Kibandama also argued that a comprehensive property valuation and compensation was done saying that government cannot disregard the rights of the affected residents to a fair and adequate compensation.

According to court records, over 600 people affected by the project were not adequately compensated. The residents dispute figures published by UNRA in the media showing that they were paid compensation in millions of shillings.

Their lawyer Godfrey Magabi said it’s not in dispute that government provided money for compensation “but it (money) went to other people known to them (UNRA),”

He argued that setting aside a recent court order would render the main application for a temporary injunction nugatory, adding that it would also enable UNRA to continue violating the rights of the affected people.

“They have gone ahead with construction despite a court order, a party that has violated court orders cannot seek remedies from court. They are now seeking orders and powers from this court to continue violating the rights of the people,” Magabi said.

UNRA, he argued, wants to have a court order set aside so that the contractor – Kolin Construction, can complete the remaining 15% of the road works since they have so far covered 75%.

Mafabi brought to court’s attention to payment documents from UNRA’s lawyers showing that Joseph Asiimwe who was paid the highest amount of money in compensation received sh41, 400.

The payment receipts showed that another resident was paid as low as Sh17, 250. “This is compensation for land measuring 0.3 hectares. If that is fair compensation, then I have problems in my understanding,” Mafabi said.

UNRA’s lawyers did not comment on the payments documents in their response to Mafabi’s submission. Yoramu Kyamanywa, one of the residents’ representatives said, it’s the residents who stand to lose heavily if the road project continues without fair compensation not government. “The government rules on behalf of the people not to violate peoples’ rights,” he said.

Kyamanywa explained “There is an old woman whose property was valued at sh9m but she was paid sh241, 000. They robbed over eight millions from her,”

Kibandama said construction works were continuing in Kabwoya rift valley land which is owned by government. Gulamali maintained the interim order and set April 22 as the date for ruling on UNRA’s application.
 

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