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Gov’t resumes compensation of property owners

By Vision Reporter

Added 6th August 2014 04:08 PM

The government has lifted a temporary suspension it slapped on compensation of people whose properties were affected by the construction of roads intended to boost Uganda’s primary growth sectors of tourism, agriculture and oil & gas

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By Joel Ogwang

The government has lifted a temporary suspension it slapped on compensation of people whose properties were affected by the construction of roads intended to boost Uganda’s primary growth sectors of tourism, agriculture and oil & gas

How the suspension occurred

Following reforms in the finance ministry’s payment system, all persons eligible for compensation were required to possess valid Tax Identification Numbers (TINs).


Tarmacking of the Kaiso- Tonya section of one of the 'oil roads' in western Uganda road.  Photos/Joel Ogwang

This decision forced the Uganda National Roads Authority (UNRA) to suspend compensation of people whose properties had been valued by Chief Government Valuer (CGV) along 13 roads under construction pending acquisition of TINs.

“We are stuck with sh30b for compensating people along eight on-going projects but we have stopped compensation,” Dan Alinange, the UNRA head of corporate communications said.

“As a result, all people who were expecting their money by the end of August 2014 haven’t been paid, but how are we going to get TINs from villagers in Kisoga (Buikwe) and Kanoni (Mpigi) who don’t have them and may never receive any other payments from government? How many Ugandans even have TINs? In fact, in Uganda, it is easier to open a bank account than get a TIN.”

Out of the 13 roads and Nile bridge works, works on the 74km Mukono-Kyetume/ Katosi- Nyenga road was the most affected, resulting in riotous demonstrations where the residents attacked EUTAW Construction Company Inc. workers, blocking them from accessing sections of the road. Similar scenes occurred on the Mpigi- Kanoni road.


Kolin workers install pipes along km 0-5 on the Hoima- Kaiso road

However, in a letter to finance minister, Maria Kiwanuka, the works and transport minister, Eng. Abraham Byandaala requested for a withdrawal of the TINs requirement, arguing that most property owners seeking compensation were didn’t have them.

“If getting my TIN is hard, how about my mother in the village who dropped out of primary school?” he asked.

“Our villagers don’t have these things. I have written a letter to my colleague the minister of finance (Maria Kiwanuka) and I hope they consider it. I am sure they will change (and abandon TIN requirement.”

TINS suspended

Amidst the suspension, UNRA engaged the finance ministry to suspend TINs so that payments go on to expedite construction works since the government would suffer penalties arising from delays in projects completion.

In their dialogue, UNRA and the ministry of finance agreed to set up a special account at Bank of Uganda (BoU) to cater for compensation of property owners, says Alinange.

“We are resuming compensation of property owners in a week’s time,” he says. “Property owners will not be required to have TINs to access their monies for now.”

The resumption of compensation will come as sweet music to property owners along the 92km Hoima- Kaiso- Tonya road, a key artery to exploring the vast oil resources in the Albertine Graben in western Uganda.

Apparently, sh15b has so far been paid out to 4, 000 property owners along the new road, says Alinange. “We have paid most people,” he says. “Right now, we have only about 500 people left to be compensated along kilometre 0-5 from Hoima town.”

According to documents seen by Business Vision, about sh350m will be paid out to compensated people on the Hoima- Kaiso- Tonya road contracted to Kolin Construction Company, a Turkish firm. Sh312m has also been earmarked for compensation on the Fort Portal- Bundibugyo and Ishaka- Kagamba (sh34m) roads in western Uganda.

The bulk of monies for compensation will be paid on the Mukono- Katosi/ Kisoga- Nyenga where sh8.2b is up for grabs, alongside the Kampala- Entebbe expressway (sh7.8b), Mpigi- Maddu- Sembabule (sh7.2b), Kampala- Masaka (2b) and Gulu- Atiak- Nimule (sh1.5b), among others.

“We have so far paid out sh1b to peoperty owners along the Mukono-Katosi/ Kisoga- Nyenga road,” says Alinange. “Most of them were those who were claiming up to sh200, 000 whilst many who exceed it will be paid starting next week.”

Byandaala welcomed the suspension of TINs, saying; “There is no logic in asking people who will use the TINs for a one-off payment to get them. It is a big problem getting TINs in Uganda. We are grateful that with compensation resuming, on-going works on the ‘oil roads’ will resume, with the contractor accessing the remaining 5kms of the road.”

No money lost ukono road

EUTAW, the contractors of the Kyetume-Katosi/ Kisoga- Nyenga road that was recently commissioned by President Yoweri Museveni, is in the spotlight over their submission of fake bank and insurance guarantees en route to accessing sh24.8b advance payment from UNRA to kick-start construction of the road.

UNRA revealed that whilst the US-based company is under investigation from the inspectorate of government, no financial losses have so far been caused.

“Usually we advance contractors between 15% to 20% (of the total project cost) to contractors to kick-start construction works,” says a source. “We advanced sh24b to EUTAW, but no money has been lost. We will recover every coin from them.”

Alinange noted that EUTAW had acquired 70% of its construction equipment, set up a camp, hired workers and procured seven vehicles for the supervision consultants, Arab Consulting Engineers Ltd and project managers.

“We will recover the sh24.8b advanced to EUTAW when they start submitting payments certificates,” he says.

“On every certificate submitted, we will cut off money to recover the advanced money. We are also hearing people say that they are seeing Chinese workers on site but the contractor has a right to hiring any person. As far as we know, EUTAW has not sub-contracted any other company because they would have told us.”

Gov’t resumes compensation of property owners along primary growth sector roads

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