Deputy Speaker Irked by High Interest Payments to Contractors

The Deputy Speaker, Thomas Tayebwa, has tasked the Committee on Physical Infrastructure to look into the expenditure on payment of interest to contractors, and provide solutions to reduce the loss occasioned to government.  

Tayebwa’s directive was prompted by a matter of national importance raised by Hon. Richard Sebamala (DP, Bukoto County Central), during plenary on Wednesday, 04 May 2022.

He was concerned that the Uganda National Roads Authority is spending up to Shs334 million daily in interest being paid to contractors.  

“This means that by the end of this year, we shall be paying Shs1 trillion to contractors in interest alone and this means that we shall not be able to maintain some roads,” Sebamala said.

Sebamala called on the finance ministry to intervene, by requesting a supplementary budget to clear all outstanding interests.

Tayebwa, however, said that besides the intervention from the finance ministry, the Committee on Physical Infrastructure should provide a report with recommendations on how government can minimise high expenditures on interest, as well as ways to clear outstanding interest fees to contractors.

“We are losing a lot of money because of contracts that the government entered into. Majority of these contracts were signed based on confirmation of counterpart funding but after the contracts are signed and at the execution level, there is no support from the partners,” he said.

He pointed out that some of the entities that are faced with such challenges are the Uganda National Roads Authority (UNRA) and water-related projects.

“Some of these contractors are comfortable because they will have borrowed this money at a much lower rate compared to the penalties and interest they charge,” said Tayebwa.

He also tasked the committee to investigate the case in which government is spending colossal money for deemed energy.

“We are paying hundreds of billions for power we have not consumed and yet we do not even have money for connecting people to energy. We have people who are saying connect us and we start consuming. That money which you are paying for unconsumed power should be used to connect power using the free connection policy,” said Tayebwa.

Meanwhile, during the same sitting, Tayebwa tasked the Third Deputy Prime Minister and Minister without Portfolio, Rukia Nakadama, to ensure that farmers are provided with coffee seedlings.

“These coffee seedlings and tree seedlings that you give us are one of the ways that MPs are able to engage and work with the communities. This is very important to us, we need seedlings,” said Tayebwa.

He directed the Prime Minister to provide a statement during the next sitting on Thursday, 05 May 2022, on government’s plan to provide seedlings to farmers.  

Tayebwa was giving guidance on a matter of national importance raised by the Kabula County MP, Hon. Enos Asiimwe.  

Asiimwe said that being a coffee season, efforts by farmers to get seedlings through the Uganda Coffee Development Authority (UCDA) have been frustrated.

“You are aware that a Coffee Policy was passed in 2017 with the objective of supporting farmers in terms of production and productivity. Farmers have requested seedlings from UCDA but they say they cannot procure seedlings because finance ministry has not released the funds,” he said.

He asked Tayebwa to compel the minister to release funds for procurement of the seedlings, saying that farmers have already invested in clearing gardens.

Hon. Denis Sekabira (NUP, Katikamu County North) said that he faced the same problem, after mobilising over 1,000 farmers who needed seedlings.

“I contacted the Executive Director of UCDA who told me that there is no money to procure seedlings. Unfortunately, nursery bed operators have seedlings and farmers are ready but UCDA is not ready to procure seedlings,” said Sekabira.

Nakadama, however, questioned why UCDA raised the issue of no funds, saying that farmers are usually given seedlings and payments done later.

“Why is it now that UCDA is saying that they do not have money? When you apply for seedlings, they are given to the CDO then payment is claimed later. I am also a farmer who has been giving out seedlings,” she revealed.

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