The European Union has extended a Shs325 billion grant to the Ugandan government for the reconstruction of a 125 kilometre road-stretch from Mbarara to the Katuna, Rwanda border.
Speaking at the signing ceremony in Kampala Ms Syda Bbumba, the Finance minister said: “The investment will improve Uganda’s national and international trade and also promote regional and international integration.”
The reconstruction will be divided into two phases of Mbarara-Ntungamo at the cost of Shs154 billion (Euro 51 million) and Ntungamo-Kabale- Katuna at Shs198.26 billion (Euro 65 million).
Government is expected to pay an eight per cent tax on the grant as its contribution. Ms Bbumba said the project will contribute to the achievement of the Poverty Eradication Action Plan goals through the promotion of trade.
The two phased contracts were signed on Tuesday in Kampala with Ambassador Vincent De Visscher, the head of the delegation representing the EU and Ms Bbumba on behalf of the Ugandan government.
The northern corridor route, which is a major trade route that links Uganda to Kenya and also acts as a transit route to Rwanda, had deteriorated resulting into long travel times, high vehicle operation costs and road accidents, which Ms Bbumba said will now improve with the funds from the European Union.
Ambassador De Visscher commended government for strengthening the management of the road sector by establishing the Uganda National Roads Authority (UNRA) and the Road Fund recently.
He, however, cautioned that the government should ensure that there is direct flow of funds from the Uganda Revenue Authority to the Road Fund to guarantee adequate and timely funding for road maintenance if Uganda and its road users are to benefit from the investments in the sector.
He said huge investments in the road sector are threatened by the rampant overloading of vehicles and called upon the government to restart the operation of weigh bridges with a much more effective system that prevents the overloaded vehicles from damaging the road network.
UNRA reinstated the axle load control in July but full implementation of the measures has not been effectively implemented to-date. The Axle load control is meant to check the size and weight of heavy commercial motor vehicles to protect the lifespan of roads from overloading.
Proper funds utilisation
Ms Bbumba said her ministry will ensure that funds are properly utilised by UNRA in collaboration with Reynolds Construction Company, a firm that has been contracted to work on the project, to ensure that funds are used for the earmarked activities. Reynolds is also undertaking the reconstruction of the Masaka-Mbarara road, which is expected to be complete by mid 2011.
Funding from EU to Uganda has increased over years from Shs632.67 billion (Euros 210 million) in 2001 to Shs1.35 trillion (Euro 450 million) for the period between 2008 and 2013.