Funds for controversial Lubowa hospital project approved

Parliament on Tuesday approved financial support for the construction of the International specialized hospital of Uganda project at Lubowa despite protests from a section of MPs from both sides of the House.

State Minister of Finance David Bahati last month presented to Parliament a request to authorise the government to issue Promissory Notes of up to US$379 million for the project designed as a public-private partnership.

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.

In this case, the Investor will put in his money to establish the hospital and the government will pay back this money later. The implication is that the government will guarantee clients to the hospital.

Bahati informed the House chaired by Speaker of Parliament Rebecca Kadaga that according to the partnership agreement signed with the developers Finasi/Roko Construction SPV the hospital, after 8 years—2 years for construction and 6 operations—will be handed over to the government.

"The problem of non-communicable disease has been increasing and the government has signed an agreement with the developer to construct the hospital and after 8 years, hand it over to the government. The money that would be collected from private patients will also be collected and taken to the consolidated fund," Bahati said.

Bahati explained that the government spends sh300b annually to treat people abroad and hoped that once the proposed construction of a sh1.4 trillion facility is done, such expenditure will be saved.

The hospital that will also serve the region will offer services for conditions such as cancer, kidney transplants, heart and brain surgery and other conditions requiring specialized treatment not available in Uganda.

"Government has been spending substantial amounts of money about $73m annually to send persons abroad for medical treatment because we do not have a specialized hospital to treat conditions that has been referred abroad. We believe that once this hospital is completed, these cases will be now managed from here," Bahati said.

Bahati emphasized that the money will not be paid immediately but the developer requested the government to issue a Promissory Note as assurance that the Company would be reimbursed for completed project works.

However, during the debate, some MPs opposed the guarantee arguing that government should rather first address issues of poorly equipped hospitals and lack of drugs in public hospitals.

Other MPs question the financial capacity of the investor and why the government had decided to ‘lend' her money."

MP Cecilia Ogwal (Dokolo) reading one of the allegedly letters written by the President said, wondered how issues of financial support came into question.

"The president said the investor would only be guaranteed of patients but not money. Who then smuggled in the issues of finances? There is something wrong here," she said.

MP James Waluswaka (Bunyole West) proposed that rather than giving the investor a guarantee of such monies, the government should use it to build hospitals in areas that do not have any health facility.

William Nzoghu (Bukonzo County) who had prepared a minority report requested Parliament to reject the request saying the investor had no money.

"How can you given investor money, land and then you believe that the project is good?" he asked.

When the matter became heated, Kadaga put a question and members voted for the funding.

Meanwhile, the lawyers of the late Victoria Luwedde, one of the two daughters of the late Price Yusuf Ssuna Kiweewa have written to the Attorney General contesting the land ownership on which government intends to construct the hospital.

Through Mulira & Co. Advocates, the lawyers argued that land on which government intends to put the Hospital belonged to Prince Suuna.

"We are to state that our clients will challenge both developments unless the government first recognizes Ssuuna's ownership of the land and our clients' interest in it and after full and adequate compensation has been made according to the country's constitution," the statement reads.

Peter Mulira, one of the partners, argued that in 2013, the Commissioner for Land wrongly converted Ssuuna's mailo land into freehold land.

 But while in the House the Minister of Lands Betty Amongi presented documents dismissing the allegations that the land belonged to Ssuuna.

"This land legally belongs to the government. It has no encumbrance on it at all. Ssuna's family tried to challenge its ownership in court and the case was dismissed," she said.