THE health ministry paid a sh3.8b penalty to Spencon because of failure to pay on time, a ministry official has said.
The ministry in 1998 hired Spencon to construct its headquarters in Kampala and Jinja Referral Hospital, which were completed in 2005.
Mary Nanono, the permanent secretary, explained that the money was paid according to the contract, adding that the interest on delayed payment was according to the agreement.
â€œWe can provide all the documents relating to this contract. There was no manipulation.
â€œThis was a genuine demand because we had to pay this money,â€ she told the parliamentary accounts committee.
â€œWe contracted various projects to Spencon, which included construction of the ministry headquarters, Jinja, Entebbe, Kisoro and Kamuli hospitals.
â€œAt the time the projects were completed, we didnâ€™t have funds to pay them, which attracted a penalty,â€ Kenneth Mwijukye, the senior accountant, added.
The Spencon management confirmed that all the payments were in accordance with relevant clauses of contract agreement between them and the health ministry.
The firm also pointed out that the ministry still owed them large sums of money, but did not reveal the details.
The health ministry officials were recently appearing before the parliamentary accounts committee chaired by Nandala Mafabi, to explain the payments.
Although they acknowledged that the firmâ€™s claim was genuine, they complained about the interest expenditure.
The committee argued this could have been avoided had the outstanding certificates been paid on time.
â€œThis could have been a genuine demand, but our concerned is that this payment was irregular in the sense that it was made without verification.
â€œIt is not clear why this payment had to involve State House and why the ministry relied on calculations by Spencon,â€ Mafabi said.
Ministry clarifies on sh3b payment to Spencon