Gov't losing billions of money in delayed infrastructure projects

Aug 23, 2020

A July 2020 report by Africa Freedom of Information Center (AFIC) indicated that the government lost over sh300b in delayed public procurement.


The government has been asked to ensure timely compensation of project affected persons for different government projects such as roads and acquisition of land for public infrastructure projects to avoid loss of money paid to contractors in delayed projects.

A July 2020 report by Africa Freedom of Information Center (AFIC) a partner of CoST Uganda, an infrastructure transparency initiative indicated that the government lost over sh300b in delayed public procurement for works and transport, health, agriculture and education sectors.

Releasing the key project insights in the last six months of the project: "Promoting Fair Business Practices between Government and the Private Sector in public infrastructure projects delivery processes in Kampala," Cost Uganda reported that 91% of the project contracts are completed late.

To avoid the delays which affect pricing by the project contractors, CoST recommended that the government clears all impediments such as the acquisition of land and compensation of project affected persons, before contracting any project.

"We have recommended to the government to ensure that before a project is started, compensation is done to avoid delays," Olive Kabatwairwe, the CoST Uganda Programme Coordinator said.

Responding to CoST's concerns, the Director of Corporate Affairs at the Procurement and Disposal of Public Assets (PPDA) Edwin Muhumuza agreed with CoST, saying the delays affect prices of the projects.

He noted that some contracts demanded increased pay in cases where they have assembled their machines to start work, but are rendered idle because the projects have been affected by delays as a result of delayed compensation of the affected persons.

"Every contract has terms and conditions for which in case there is a delay, it can result in penalties. We get delays in some projects just because the affected persons have failed to provide for a right of way," Muhumuza said.

Muhumuza attributed some of the delays to delayed compensation of the project affected persons and some of them demanding unrealistic compensation from the government before they can give up their land.

He, however, said the government is working out modalities such as timely compensation and sensitization of the affected persons to ensure that the projects are completed in time.

Project delivery

Meanwhile, a midterm review on public infrastructure projects by CoST revealed that there is an increase in fair business practices between government and the Private Sector in public infrastructure project delivery processes.

Gilbert Sendugwa the Executive Director at the Africa Freedom of Information Center (AFIC) said fair business is very important for development since it also enhances transparency and creates room for fairness and good decision making.

"Over time, we observed that transparency has been low. This program is perceived to create a fair business. Cost and time overruns are also common, "Said Ssendugwa.

Kabatwairwe, on the other hand, noted that the project on fair business practices between the government and the private sector on public infrastructure is aimed at increasing competition in doing business with government agencies.

It is also according to Kabatwairwe, aimed at strengthening transparency in procurement processes of infrastructure projects.

"Through the ongoing Assurance process on 10 projects under this intervention, we have observed an improvement un proactive disclosure. Entities are gradually appreciating disclosure and publication of information across various platforms, off course we call for full disclosure as per the CoST IDS," she explained.

She, however, noted some of the challenges the interventions have observed which include bureaucracies in decision-making processes on disclosure of information, and slow action to commitments and recommendations as well as the impact of COVID-19 where the project lost three months.

Michael Chengkuru the AFIC Open Data Specialist noted that in the past three years what has been disclosed in the government portal is gradually increasing.

Presenting statistics on "Trends in Disclosure of procurement Data" Chengkuru said: "Even at individual levels, disclosure is increasing and this tells us something."

He said works and transport accounted for 75% of the disclosure but expressed concerns that the sector was not disclosing data at certain periods of the year.

Chengkuru also noted that overall, the key finding that struck stakeholders was the trend in the disclosure that tends to rise towards the end of quarters and the financial year, and this is very high with the works and transport sector.

Returned funds

The Commissioner Procurement, Policy, and Management Department in the Ministry of Finance Planning and Economic Development David Kiyingi said districts should not be castigated for returning unutilized funds to the treasury.

"The delays in the utilization of the funds is not on PPDA or Ministry of Finance but the law in place. Probably the entities should have accounts to see how best to keep these monies to avoid delays in project deliveries," said Kiyingi.

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