Members of parliament sitting on the Committee on National Economy have asked the Inspector General of Government (IGG) to investigate Kampala Capital city Authority over the 60 billion lost in foreign exchange off the 288 million dollars and also using 60 billion to manage a contract of 246 million dollars.
The committee on Monday, 13 February 2023 met officials from the Authority to get progress reports on the World Bank loan intended for the Kampala Institutional and Infrastructure Development Project of 2015 and the US$288 million from the African Development Bank meant for the Kampala City Roads Rehabilitation Project of 2021.
The World Bank loan, which was meant for road construction and upgrading as well as drainage systems, widening of pedestrian walkways and signaling at junctions in Kampala City, was approved in 2005.
KCCA’s Finance Director, Don Kitabire, said the project was challenged by financial loss worth US $ 17 million incurred through foreign exchange.
“World Bank uses currency called SDR, they changed money from SDR to US dollars so we had a loss which we however communicated to the Finance Ministry,” said Kitabire.
A total of 62.3 billion Shillings was lost in foreign exchange for funding allocated to Kampala Capital City Authority – KCCA for the second phase of the Kampala Institutional and Infrastructure Development Programme (KIIDP II).
The money equivalent to 17.08 million US Dollars was recorded as a loss in the process of converting money from the Special Drawing Rights (SDR), an accounting unit for transactions with member countries of the International Monetary Fund, to an acceptable currency.
The value of Special Drawing Rights is based on a basket of the world’s five leading currencies which include the United States Dollar, the Euro, the Japanese Yen, the Chinese Yuan and the British Pound. Uganda’s exchange was from Special Drawing Rights to the US Dollar, according to Don Kitabire, the Acting Director of Treasury Services in KCCA.
The Bukoto central Member of Parliament Eng. Richard Sebamala said the money lost in currency exchange should be investigated further to see how much money is lost off the 24 trillion we borrow for development and budget support.
KCCA also abandoned the eco bus project that was estimated at 12.2 million dollars for 15.2km of road without permission from Parliament. It will be noted that at the time of loan request this change priority was not accepted hence this being illegal.
MP Sebamala insists that the IGG should investigate the procedure for re-prioritisation and punish the people concerned.
The Kampala Institutional and Infrastructure Development Programme (KIIDP II) project that started on May 8, 2015, is aimed at widening, upgrading and constructing city roads, junctions, drainage and associated infrastructure. It is funded through a 175 million US Dollar loan from the International Development Association (IDA) of the World Bank and counterpart funding of 8.75 million US Dollars.
Documents indicate that as of September 30, 2022, The World Bank had disbursed 157.92 million US Dollars representing 90.24 per cent of the funding while 17.08 million US Dollars (9.76 per cent) was undisbursed due to exchange loss.
Hon. Lillian Aber (NRM, Kigtum District), was concerned that the project delayed and thus costing government a lot of money accrued through interest. The project was initially planned to end by 2020 but it has been extended to May 2023.
“We are looking at money borrowed which government has to pay for; the time we waste translates into money wasted. Have we even calculated how much we have lost?” asked Aber.
Although the project’s initial completion period was five years, up to May 31. 2020, this has been shifted four times further delaying the project to May 31 2023. Kitabire says that the project has faced several other challenges like the suspension of works, especially for the Lubigi channel.
Kitabire says that the project is estimated to have 85 kilometres of paved city roads at its completion and that 81.77 kilometres (96.2 per cent) had been constructed as of November 30, 2022, The roads include Kira Road, Makerere Hill Road, Nsalo Road, Kabira, Fairway junction, Mambule, Bakuli-Nankulabye-Kasubi, Makerere University Roads, Lukuli Road, Kulambiro Ring Road, Nakawa-Ntinda Road, John Babiiha, and Windsor Crescent, among others.