PARLIAMENT | PAU | NSSF

KAMPALA - MPs have raised a red flag over the delay by the Petroleum Authority of Uganda (PAU) to remit sh1.78b of its employer contributions to the National Social Security Fund (NSSF).

The parliamentary committee on budget said Tuesday (January 31, 2023) that it was informed that PAU had not remitted to NSSF employer contributions amounting to sh1.78b from July 2022 to December 2022 which it said is illegal.

The committee noted that it was also informed by PAU that this (failure to remit the money) was on account of poor releases in the first half of the financial year 2022/23.

“Only 41.6% (sh26.5b) of the approved budget of sh63.7b was released,” it reported.

The report was presented to the House that was chaired by Deputy Speaker Thomas Tayebwa by committee vice-chairperson Ignatius Wamakuyu, for consideration and approval

Attracting penalties

The committee also observed that NSSF employer contribution is a statutory and contractual obligation and the arrears will attract interest and penalties.

It recommended that the Government should make financial releases to PAU as per the approved cash flow plan for the remaining quarters of the financial year 2022/23 and release sh1.74b to PAU to settle outstanding NSSF contributions.

“PAU should adhere to the law and ensure that NSSF contractual obligations are met,” the committee added.

The committee also heard that PAU is monitoring and regulating six key projects being implemented concurrently.

These, include the Tilenga, Kingfisher, Development Area (KFDA), the East Africa Crude Oil Pipeline, Kabaale Refinery Project, Kanywataba and Ngassa deep and shallow exploration contract areas.

It observed that Uganda has moved into the development and production phases with first oil expected in 2025.

However, it said, PAU has a total funding shortfall of s45.5b in the next financial year. The funds are required for the following critical activities: Recruitment of an additional 47 staff (sh7.916b), National Petroleum Data Repository Infrastructure Project (sh3.228b), retooling project for PAU (sh6.573b) and National Oil Spill Response and Monitoring Infrastructure Project, sh17.827b.

“The committee recommends that the Government allocates additional sh45.5b to enable PAU to effectively execute its mandate in the oil and gas sector,” it said.

On January 24, 2023, Uganda officially launched an oil drilling programme as it seeks to join the club of oil-producing nations with a mega-project that has incensed environmental groups.

President Yoweri Yoweri Museveni officially commissioned the start of a drilling campaign on the Kingfisher oilfield described by PAU as a “milestone”.

The Kingfisher field is part of a $10b scheme to develop the country’s oil reserves under Lake Albert and build a vast pipeline to ship the crude to international markets via an Indian Ocean port in Tanzania.

There are an estimated 6.5 billion barrels of crude under this lake, of which about 1.4 billion are recoverable. The reserves are expected to last up to 30 years, with production peaking at 230,000 barrels a day.