A section of Busega-Mpigi expressway as of last year. PHOTOS | COURTESY | UNRA
The cost of construction of the Busega Mpigi Highway has escalated by more than 500 percent of the initial project cost—Shs547.5 billion—on account of adjustments to the road design and realignment of the road from the original route.
Payments in the form of idle time to the contractor are also said to have been a major factor in the cost escalation. Under the terms of such contracts, the government has to pay a contractor for idle time once such a contractor deploys workers and equipment on site, but cannot commence work on account of failure by the government to meet its obligations in as far as facilitation of work is concerned.
Failure to facilitate work can be by way of failure to hand over designs or a project site in time. This means the taxpayer will be forking out in excess of Shs2.5 trillion for the 23.7km road, ranking it among one of the most expensive road projects in the country.
Escalation warning
The matter of escalated costs first came to the fore last month following the release of the report of the Auditor General for the period ending June 2023, which revealed that the cost of the road had more than doubled by the end of February 2023.
“The Busega-Mpigi Expressway project has experienced significant cost escalation from Shs547.5 billion to Shs1.35 trillion as at March 31, 2023 due to inadequate detailed designs at contracting,” the report reads.
However, sources familiar with the road project, which is part of Africa’s Northern Transport Corridor, stretching from Kenya to the Democratic Republic of the Congo through Uganda, revealed that the cost has escalated by more than 500 percent. This sparked off fears that it might turn out to be one of the most expensive road construction projects ever to have been undertaken.
Mr Bageya Waiswa, the Permanent Secretary in the Ministry of Works, confirmed the escalation, but dismissed claims that it had reached the 500 percent mark.
“They said that there were redesigns and changes in alignment of the road, which have caused an escalation of the cost, but that could not have escalated to 500 percent,” Mr Bageya Waiswa said.
According to the AG, the escalation in the cost of the project was on account of the fact that the government, through the defunct Uganda National Roads Authority (Unra), hurriedly awarded the contract to the joint venture of China Civil Engineering Construction Corporation and China Railway 19th Bureau Company Limited.
“Unra, on June 18, 2019, entered a contract with the contractor for civil works for the construction of Busega-Mpigi expressway at a contract sum of Shs547.543 billion without the engineer’s estimates and detailed designs to support the contract amount,” the report notes.
Idle time
Sources within the Works ministry revealed that the government had hurriedly entered into the tendering process and handed China Civil Engineering Construction Corporation and China Railway 19th Bureau Company Limited the contract before designs were complete. This, our sources added, meant that work could not commence.
The artistic impression of the same section of the road.
“Unra’s excuse at the time was that it was under pressure to enter the tendering process because they needed to start disbursing funds from the African Development Bank [AfDB] lest it either paid commitment fees on undisbursed funds or even risk having the bank cancel the loan altogether. That is the excuse that Unra always gave whenever they would go into the tendering process when there were no complete designs,” our source revealed.
The Office of the Auditor General had also pointed out in its latest report that the government had, as of March 31, 2024, incurred commitment fees of $1.55m (Shs5.7b) on undisbursed donor funds due to delayed utilisation.
According to sources within the defunct Unra and those in the Works ministry, the government started paying the contractor for idle time almost immediately after the award of the contract because designs for the road were incomplete. It is not clear how much China Civil Engineering Construction Corporation and China Railway 19th Bureau Company Limited were paid for idle time, but Unra had by the time of its winding up been paying contractors at least Shs300m a day for idle time.
Redesigns, realignment
According to our sources, the cost of the project has escalated partly on account of the redesigns that paved the way for the introduction of interchanges.
“The original design did not have any interchanges all the way from Busega to Mpigi yet there are many other roads like the one to Mityana and Entebbe, to be served. That meant that concrete works, which were not in the original bills, were introduced,” our source revealed.
Saturday Monitor further understands that one of the other changes to the original design was a realignment of the road to pass through a swamp. Our source revealed that the realignment had increased the length of the road by at least three kilometres.
Information available to Saturday Monitor indicates that the realignment means that most of the road is now going to be a very long bridge, similar to the 1.4km Nambigirwa Bridge on the Kampala-Entebbe Expressway.
There are, however, contradicting accounts on the part of officials of the Works ministry in regard to the effect that the realignment of the road would have on the cost of the project. Whereas some suggested that the realignment had introduced costs in terms of filling the swamp with rocks and immense concrete works, others said it would actually help the government make a saving.
“There was an effort to bring down the cost at some point. Yes, there would be a cost of passing through the swamp, but realignment would bring down the cost because you will have avoided resettlement and compensating project-affected persons and other social issues that come with working in settlements,” one of the officials said.
Bageya Waiswa said both the redesign and realignment of the road are the subject of an internal probe appointed by General Katumba Wamala, the Works and Transport minister.
“The minister has appointed a technical team to review that alignment and establish what could have happened and advise the ministry for appropriate action. We are waiting for the report,” Mr Bageya Waiswa said.
Works stall
At the same time, Saturday Monitor has established that work on the project, which is more than three years behind schedule, has stalled on account of lack of funds. The Auditor General’s latest report indicates that project funds have since run out.
The report noted that the Shs168.8b that was budgeted for the project had been fully utilised.
“By May 2024, the original contract funds for civil works were fully depleted, with physical progress at only 40.86 percent, and certified works worth Shs30.8b remained unpaid, posing risks of delayed payments and legal claims,” the report notes.
Our sources revealed that the government has embarked on negotiations with the AfDB to avail it more funds to complete the project. The contractors have in the meantime remained on site and are being paid for idle time.
Mr Bageya Waiswa said he did not have any information in regard to the negotiations and how much the government is paying the contractors for idle time.
Elsewhere, it has emerged that 1,527 project affected persons (PAPs) are yet to be paid at least Shs51 billion as compensation for their land. This prompted Auditor General, Edward Akol, to sternly warn that “delayed payments, unplanned costs, and funding shortfalls” are threatening cost containment and timely completion of a project.
Work on the Busega Mpigi expressway commenced in May 2020 and had been expected to be completed in the middle of 2023. The completion date has since been pushed to September 2027.
