President Museveni (centre) and Ms Enrica Pinetti (third left) look at the artistic impression of the proposed international hospital at the ground breaking ceremony on June 1, 2017. MONITOR PHOTO.
The Shs4.2trillion supplementary budget passed by Parliament last week included a Shs298b vote for the controversial International Specialised Hospital of Uganda at Lubowa on Entebbe Road.
This brings to Shs774.4b the amount of taxpayers’ money sunk into the 264-bed hospital project since 2021, but without a definitive completion date nor update regarding status of construction despite everal deadline extensions.
While presenting the 2023/2024 Health ministry policy statement in 2023, Health minister Dr Ruth Aceng told MPs that construction was at 32 percent and there had been a revision in the completion timeline between the project owner, Ms Enrica Pinetti, and the government to December 2024.
The Finance ministry had earlier stated that construction was at 100 percent pending final touches.
The Prime Minister, Ms Robinah Nabbanja, told Parliament in January 2025 that construction was at 61.8 percent and was expected to be completed in February. But Dr Aceng told the parliamentary Health Committee in the same month that the same construction was at 45 percent.
Dr Diana Atwine, the Health ministry permanent secretary, which co-supervises construction of the controversial hospital project, told Daily Monitor yesterday that whereas the approved funds should be enough to complete the remaining works, she was unsure of the progress on the ground.
“I do not have any details or the latest information about the project. I have not been there yet. You should ask Finance about where the money is going,” Dr Atwine said.
Attempts to get an update from her Finance counterpart, Mr Ramathan Goobi, were futile as he did not pick up nor returned our calls.
The hospital project, which was first mooted in 2015 and construction flagged off by President Museveni in June 2017 as a private undertaking only for the Executive to make an about-turn in March 2019 with a request to Parliament for approval of a loan guarantee of a $379m (Sh1.4 trillion), that has now turned into one of government’s bottomless pit ventures.
Nevertheless, all calls for full accountability of all the monies sunk into the project construction, which site is guarded by the UPDF, have been disdainfully rebuffed. This notwithstanding, the Executive keeps tabling more requests for funds for the project.
At least two attempts by Parliament to conduct an on-site oversight inspection have been repulsed. Even a delegation of officials led by Dr Aceng, and Dr Atwine, was denied entry by security personnel in 2019. In one case, they were told to first obtain permission from the then Inspector General of Police, Martins Okoth-Ochola.
The Leader of the Opposition in Parliament, Mr Joel Ssenyonyi, in company of a group of MPs were last year in February turned away from the project premises by the commander of Kajjansi Police.
In 2023, a Daily Monitor journalist on assignment was arrested while attempting to access the construction site.
Billions gobbled
While presenting the supplementary budget last week, the junior Finance minister, Mr Henry Musasizi, defended the Shs298b vote to Lubowa, stating that the funds were part of Treasury operations, which also covered court settlements.
“Treasury operations require Shs380.496b, of which Shs298b is for promissory note obligations related to Lubowa Hospital’s completion. Additionally, Shs37 billion is earmarked for interest payments on the IMF Special Drawing Rights allocations, Shs42b for debt management fees under the rural electrification project, and Shs30 billion for court awards,” he said.
The minister said the supplementary budget will be financed through the Petroleum Fund, local revenue, non-tax revenue, domestic and external borrowing.
The request came under the auspices of the Supplementary Expenditure Schedule No.3 for the Financial Year 2024/2025 where Shs1.1 trillion was spent under the three per cent provided for under the Public Finance Management Act (PFMA) whereas Shs3.1 trillion needed prior approval of Parliament. Mr Musasizi said this is in line with Section 24 of the PFMA.
The minister presented the request before the parliamentary Budget Committee in the absence of both its chairperson, Mr Patrick Isiagi and deputy, Mr Remegio Achia. Shortly after the committee meeting, the Sheema Municipality MP and a committee member, Mr Dicksons Kateshumbwa tabled the majority report before the House.
Opposition lawmakers on the other hand strongly opposed additional financing to the hospital, labelling the hospital a “bottomless pit” that has drained taxpayers’ money with little to show for it.
“We cannot continue throwing money at a ghost project,” some MPs concurred, demanding a special audit before any further disbursements. They described the hospital as a symbol of government wasteful expenditure and impunity, questioning why no public official, including MPs, has been allowed to verify progress of construction.
Despite their protests, the ruling NRM party-dominated Parliament keeps supporting requests for extra funds.
The Kira Municipality MP, Ibrahim Ssemujju Nganda, in his minority report, revealed that the Shs298b for the hospital had already been disbursed under the 3 percent rule, which allows certain payments without prior parliamentary approval.
“This brings the total so far paid to Pinetti for Lubowa to Shs774.4 billion. I don’t need to remind the country where and when Uganda fell in love with Italian investor Pinetti. Mentioning her name is painful enough,” Mr Ssemujju said.
He further revealed that the committee responsible for approving these funds has been working in darkness, unable to verify progress on-site due to repeated obstruction by the project developer.
Even the Owner’s Engineer, tasked with monitoring progress on behalf of the government, was barred from accessing the site.
Phantom investment
“The Auditor General’s report on Treasury Operations for the year ending June 30, 2023, highlighted concerns that, although the Owner’s Engineer issued milestone certificates based on progress reports from the contractor, the engineer faced restricted access to the construction site. This limitation undermined their role in safeguarding the interests of both the Ministry of Health and the Ministry of Finance,” Mr Ssemujju added.
“In light of these issues, there is a significant risk of financial loss for Ugandans if additional funding is allocated to the project. It is recommended that the project be halted until a special audit report is completed and Parliament can deliberate on the findings,” he warned.
Earlier this year, Parliament approved Shs53 billion in January. The Ministry of Health in January tabled a shs1.5 billion supplementary budget for among others supervising construction of the project.
Mr Ssenyonyi told Daily Monitor yesterday in an interview that last year, he conducted an oversight inspection of various projects owned by private investors, including Lubowa hospital, but despite the government injecting significant amounts of money into these projects, there was no accountability, no Memoranda of Understanding, and in some cases, no clear indication of the government’s shareholding.
“The reality is that parliament is letting this country down. I won’t blame President Museveni and his regime alone because they are known for such actions. But Parliament, which is supposed to act as a gatekeeper, is doing the opposite. I was denied access to this facility, and even the Minister of Health was blocked when she attempted to inspect it.
After these incidents, we informed Parliament that we couldn’t continue funding the hospital without being allowed to assess progress on the ground. But we were let down by our colleagues, especially those from the NRM party, who always outnumber us during voting. They failed to grasp our concerns. I believe the government is using these schemes to siphon Ugandans’ money,” Mr Ssenyonyi said.
Mr Julius Mukunda, the executive director of the budget advocacy NGO, CSBAG, panned the project as another wasteful spending.
“It is not only a bad move but also a waste of taxpayers’ money. This is one of the ghost projects we continue to fund, yet there is no oversight. The audit reports showed that the Owner’s Engineer, who is supposed to monitor progress on behalf of the government, was denied entry,” Mr. Mukunda said.
He questioned why a project that was initially supposed to take two years has now stretched to over five years, with no clear indication of completion.
Similarly, Mr Marlon Agaba, the executive director of the Anti-Corruption Coalition of Uganda (ACCU), expressed disappointment, saying the government keeps allocating funds despite a lack of accountability.
“So many private projects have been pumped with money, and we see no value for it. Lubowa is just another example. I do not know if this is the government’s new way of stealing from Ugandans,” he said.
BACKGROUND
The Lubowa hospital project has been a subject of public and parliamentary debate since its inception in 2015. The Ugandan government entered into a contract with Pineeti (Finasi/Roko Construction Limited), a consortium of two private companies, to construct the hospital, which was intended to provide high-quality healthcare services. The agreement was formalised through a Public-Private Partnership (PPP) arrangement aimed at creating a specialised medical facility with advanced treatment capabilities.
The contract between the government and the consortium was signed on June 15, 2016, with the Ministries of Health and Finance representing the government. Under the terms of the agreement, Finasi/Roko was tasked with the financing, design, and construction of the 240-bed hospital located in Lubowa, a suburb of Kampala. The hospital was intended to be one of the largest healthcare facilities in the country, with state of-the-art medical equipment and specialised services.
However, the project quickly encountered issues, particularly regarding the funding mechanism and project oversight. The government committed to financing the project through a loan from Exim Bank of China, with the funds being channeled through the Ugandan government to the developer.
The total cost of the project was estimated at $378m (Shs1.3 trillion), a figure that has raised significant concerns among Ugandans, especially given the substantial amount of public funds involved. In February 2019, the Ugandan government sought parliamentary approval for the issuance of promissory notes to secure the required financing.
The government requested that the Parliament approve these notes, which were backed by the future revenues from the hospital. The deal was met with resistance from some lawmakers, who questioned the long-term financial implications and the accountability mechanisms attached to the project.
However, the government pressed forward, emphasising the potential benefits of having a state-of-the-art medical facility that could reduce medical tourism and improve healthcare outcomes for Ugandans.
On March 12, 2019, the Ugandan Parliament approved the loan request, despite reservations from opposition members. The approval was seen as a critical step toward the implementation of the project, but concerns about accountability and transparency remained.
Since then, the project has faced significant delays. In April 2022, reports surfaced that construction had stalled due to the lack of a contractor on site. There were concerns that the developer had failed to meet agreed-upon deadlines, and the hospital’s construction had not progressed as expected.
The project’s cost has also ballooned, with the government allocating additional funds in an attempt to keep the construction moving. In 2022, the Audit General found that a payment of $57m was commensurate with the 23 percent work done at the site, while $76m (Shs276.8b) was paid in excess. However, Ministry of Health officials indicated that construction was ongoing, but this could not be verified since the MPs were blocked from accessing the site.
Despite these setbacks, the government has continued to push for the completion of the hospital, citing the need to provide high-quality healthcare services to the population. The ministry says the total project cost was to be $249.9m (Shs910.4b) with the facility covering 85,000 square metres of built-up area. But that cost estimate was driven up midway, running into $379.71m (in excess of Shs1.4 trillion).
The ministry claimed: “$129.81m (Shs472.9b) represents the Time Value of Money or interest cost of payment that the government has to incur as a result of repaying Finasi/ROKO Construction over six years. The [money] represents an effective interest of 6.49 percent." Additionally, the ministry implied that the Lubowa Hospital would save Uganda a lot of money and increase access to specialised care.
At the time (2014), the government had estimated that the country was lo- sing $73m (Shs278b) per year through medical tourism.
Both the project and the project land are fully owned by the government but "the responsibility for the hospital development has been given to Finasi/ROKO Construction Ltd," according to the Finance ministry.
