Govt to borrow another Shs 1.2tn for roads
Govt to borrow another Shs 1.2tn for roads
The government’s request to borrow Shs 1.22 trillion to upgrade national roads around the nation has been approved by Parliament.
The funds are to be taken out of the OPEC Fund for International Development and the Islamic Development Bank. During a plenary session on Wednesday led by speaker Anita Among, members of parliament granted the proposal.
The monies will help with the renovation of the 100-year-old Masindi Port Bridge as well as the 20-year-old Mpara-Bwizi, Kiruhura-Bwizi, and Rwamwanja-Kahunge roads.
Robert Migadde, national economy committee deputy chairperson who presented an assessment report of the loan request, stated that as much as Uganda’s public debt remains within sustainable levels, the country is rated at moderate risk of debt distress.
The committee recommended that the ministry of Finance, Planning, and Economic Development renegotiates the risk premium of the loan to a lower rate and also have it fixed for the entire debt servicing period.
Further, the committee also implored ministries, departments, and agencies (MDAs) to observe strict project designs before sourcing for money, to minimize project delays by effectively compensating project-affected persons (PAPs) under the Upgrading of National Roads Project.
The government is expected to provide Shs 83.388 billion for land acquisition. The MPs also authorized the government to refinance the reconstruction, rehabilitation, and upgrade of major roads in the Masaka and Ntungamo districts at Shs 691.6 billion. Under the prefinancing agreement, 89.5km of Masaka-Mutukula road will be reconstructed, 11km of Nyendo-Villa Maria road will be rehabilitated, 3.5km of access roads to Masaka UPDF barracks and to Masaka Industrial Park will be upgraded, whereas 28.5km of Kikagati-Kafunjo road will be improved.
In a committee report on the prefinancing proposal, it was observed that the unit cost of a road under the project is valued at Shs 5.08 billion per kilometer compared to Shs 3.38 billion [for upgrading] as indicated under the annual budget performance report for the financial year 2022/2023.
The committee advised that the Uganda National Roads Authority (UNRA) and the Ministry of Works and Transport make sure the contractor produces the highest quality roads and bridges in order to obtain value for money, considering the high unit cost of construction.
The vote follows parliament’s approval of the government’s previous request last week to borrow an additional Shs 1.807 trillion from the World Bank and the Export-Import Bank of China to fund the Climate Smart Agricultural Transformation project and National Internet Fiber.
