HIKING PRICES: Kabaale International Airport contractor asks for more time

KABAALE | INTERNATIONAL | AIRPORT

HOIMA - SBC Uganda Ltd, a joint venture of SBI International Holdings AG and Colas UK, the contractors of Kabaale International Airport in Hoima district have applied for more funding and an extension of contractual period following the increase in commodity prices that has affected the project budget.

The construction works kicked off in April 2018 after the Government acquired a loan of US $309 million (about sh1.1 trillion) from Standard Chartered Bank and UK Export Finance for the first phase of the project.  

The project is currently at 85% progress and the airport is going to facilitate the construction of the oil refinery in Kabaale Sub-county in Hoima.

The project was expected to be handed over to the Government in February next year but the construction has been pushed to 10 more months.

According to officials who preferred anonymity from SBC, the outbreak of COVID-19 and heavy rains in the area slowed down the progress of the work which affected the February 2023 deadline.

The project was also affected by the increase in prices of different commodities and hence this forced the company to apply for more funding.

According to the sources, by the time company signed for the contractor a litter of fuel was at sh4000 but now is at sh6500, a bag of cement was costing sh30, 000 but now is between sh37000 to sh40000 while a trip of sand was sh120000 but now is at sh150000. 

The variation of commodity prices has been a big challenge that affected the budget of the project.

Eng. Michael Mugerwa, the Executive Director of Uganda National Oil Company (UNOC), the supervisor of the project confirmed that the contractual period is going to be extended by 10 months from February of next year to December.

He said that during the COVID-19 Period, the workforce was reduced and this affected the project's progress adding that the contractor deserved more time because it was not his own making.

He also confirmed that the Contractor needs extra funds since they have used up to 80% of the total sum budget that was allocated to the project.

He noted that works on the project such as the construction of 15 housing units for Airport Staff, Air Traffic Control Tower, and fuel firm and turn pads have not yet started.

However the construction of the 3.5km runway is almost completed, Cargo terminal building and rescue firefighting system are complete while the airport apron which hosts the four biggest aircraft, air-ground lighting system and taxiway are all on the finishing level.

Once the project gets completed, air cargo will be landing at the airport to deliver oil refinery materials.

For the last two weeks, several people including Bunyoro Kitara Kingdom, Kikuube district official members of the civil society organization, members Kikuube elites group and Members of Parliament on the Trade and Industry Committee have visited oil and gas projects which include Kabaale International Airport and Kingfisher oil field in Buhuka parish Kyangwali sub-county Kikuube district.