MPs grill Bahati over Lubowa Hospital Project

KAMPALA - MPs on the Parliamentary Committee of National Economy grilled the state minister of Finance David Bahati over the expenditures already approved for the construction of the International specialized hospital in Lubowa, Wakiso district.

Information tabled to the Committee indicates that despite the conflict that has marred the construction of the hospital, the government already issued promissory notes of up to sh318.2b to the Contractors Finasi /Roko construction SPV.

Designed as a public-private partnership, the total cost of the project is about sh1.4trillion.

A promissory note is a financial instrument that contains a written promise by one party to pay another party a definite sum of money, either on-demand or at a specified future date. The promissory note is cashed depending on the work done.
 
According to the partnership agreement signed with the developers Finasi/Roko construction SPV, the hospital, after eight years - two years for construction and six for operations, will be handed over to the government.

Roko, however, has since been ‘thrown' out of the project and a new Chinese company, yet to be disclosed has been brought on board. Roko has taken the matter to Court.

In the meeting on Thursday, the MPs tasked Bahati with explaining how the promissory notes were issued out yet according to the work plan, the expenditure so far done is not equivalent to work done.

MP Andrew Ajja (Kabale Municipality) argued that for this amount, the project civil works should be now complete.

"According to the agreement, civil works were to cost $79m. Which means the money has already been committed even before the project civil works start. So where is this project going to get money if at this time we have already issued the money that was supposed to be for civil works?" he asked.

The Committee Chairperson Syda Bbumba (Nakaseke North MP) proposed that in order to resolve the matter, the Auditor General should quickly carry out an audit of the hospital project performance.

"This is the second most expensive project after Karuma dam.

I am surprised that already this much has been approved as money spent yet there's not much to see. This is tax payers' money that we are committing. We are concerned and the auditor general should immediately come in and audit the works so that we are able to establish whether the money is equivalent to work done before we report back to the House," she said.

Bbumba wondered why the contractor has continuously relied on engineer Francis Wakabi yet his contract was not renewed by the Ministry of Health and another engineer appointed.

"Eng. Wakabi's contract was not renewed. It was canceled but he has since refused to leave. He is illegally in office. The Ministry of Health even appointed a new engineer. So what is he doing in that office? What is he approving?" she asked.

Bahati told the committee that despite the ‘administrative misunderstanding' between the contractors and Ministry of Health, the works are ahead of schedule.

"We want to assure members that the project is on schedule. The payment was based on the milestones. Let's review the milestones and then decide on whether we are on the right track or note," he said.

Bahati said according to the project, the promissory notes will be cashed upon project completion. He apologized to the Committee for last week's incident where they were denied entrance to the construction site to see the progress of the project.

He assured members that he is in touch with the contractors so that the committee can visit the site any time.

Members of the committee accompanied by the Ministry of Health officials were recently denied entry to a construction site where the government plans to build the hospital. The MPs demanded that Bahati should make a formal apology in Parliament.

He said the Government is working hard to resolve internal conflicts regarding the Lubowa hospital project.

"There are administrative challenges that the Government needs to handle urgently involving the players. I don't see any reason why there should be fights because this is a strategic project that we all need and support," he said.

The committee directed him to appear again next week with the contractors, ministry of health and the technical team from finance.

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