Alarm as KCCA spends Shs10b per km on urban roads

Barely a year after the 2006 election campaigns during which he promised the construction of new tarmac and laterite roads, President Museveni, according to a May 30, 2007 article published by this newspaper, was jolted by the sharp rise in road construction costs and called for an audit.

At the time, the cost of constructing a kilometre of road had shot up from an average $300,000, not adjusted for inflation, (about Shs510 million) in 2000 to more than $850,000 (about Shs1.5 billion). 

Fifteen years later, little or nothing has changed as the unit cost per kilometre of roads constructed continues to rise to astronomical levels both for national and urban roads.

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Authorities in Entebbe Town are currently tarmacking a 1.5km stretch at a whooping Shs25b, according to highly placed sources. The Uganda National Roads Authority (Unra) averagely spends Shs2b to Shs3b to tarmac a km.

However, the cost is higher within the city.

Kampala City Lord Mayor, Erias Lukwago, last month revealed that the cost for a road within the jurisdiction he presides over is at a staggering Shs10b, which he said needs to be investigated.

In his state of Kampala address on May 31, Mr Lukwago spoke with candour about “the sloppiness and incompetence exhibited by some of the contractors, which has resulted in inordinate delays and shoddy work on some sections of the road.”

This means that additional exorbitant costs are incurred in completing and repairing the just-built roads.
For instance, Lukuli Road in Makindye Division, which is only 7.71km, was constructed at a cost of Shs70.5b. This means that each kilometre cost at least 10b Shs.

The Kabuusu-Bunamwaya-Lweza road in Lubaga Division, which stretches for about 8km, cost at least Shs93b. This means that each km was constructed at a whopping Shs11.7b.

The Kulambiro ring/Najeera stretch measuring about 9.77km cost Shs90.4b, meaning that each km cost Shs9.2b.

The Acacia Avenue stretching 9.77km was constructed at a cost of Shs90.4b, meaning each kilometre cost Shs9.2b.

“Our Internal Audit Directorate and the Capital City Public Accounts Committee reports have unearthed many accountability issues perpetrated by individuals many of whom have since left the institution, but these reports have been in futility with little or no follow-up actions undertaken,” Mr Lukwago added.

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Some of the instances in which no action was taken include is cited by the Lord Mayor in the 2020 Capital City Public Accounts Committee (PAC) report, which details the blatant use of lumpsum prices, which tend to facilitate the haemorrhage of funds through issuance of overpriced contracts. A contract design of city roads that was estimated to cost Shs92.6b in August 2015 had a 70 percent increment in a period of only 10 months.

High cost

There has been so much discussion on the unit cost per kilometre of roads in the country, with authorities arguing that the costs are driven by market dynamics while some critics cite syndicated corruption in the procurement sector as among the factors.

The Shs10b per km cost, according to Mr Lukwago, was fixed for roads projects under the World Bank funded Kampala Institutional and Infrastructure Development Project (KIIDP), and yet the unit cost per km for tarmacking 69.7km of roads within the city funded by the African Development Bank (ADB) is Shs2.5b.

Some of the roads under KIIDP include; Namirembe-Luwuum (1.5km), Archer (0.75km), Mengo hill (0.75km), Nakivubo channel (0.5km), Mpabaana (0.75km), Luzige (0.3km), Mutebi (0.45km), and  Semugooma (0.4km) totalling Shs23.9b and the for 5.4km contract was awarded to Stirling Civil Engineering Ltd.

The others are Jakaana (0.65km), Nsooba (0.75km), Kafeero (0.8km), Lumasi (0.55km), Muganzi-Awongera (1.6km) and Waligo (4.2km) in Kawempe Division. Also included are Bakuli market lane-1.0km, Nakibinge-Bawalakata-2.9km, Mackay-1.6km, Sembera-1.5km, Concrete Box Culvert at Sembule and Nalukolongo Channel, which totals Shs54.9b, and the 15km contract was awarded to Energo Projekt Niskogradnja.

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Kulekana-2.1km, Nsambya-Katwe-0.95km, Jjuko-1.3km, Kevina-1.2km, Appas-1.3km and Bugolobi-Namuwongo Link-0.4km, totalling Shs31b for the 7km contract was awarded to Abubaker Technical Services & General Supplies Ltd. A review of the Capital City Public Accounts Committee reports for the FYs 2016/2017-2017/2018-2018/2019 exposes damning revelations. 

During the construction of the Bakuli-Nakulabye-Kasubi road, the cost increased by 35 percent, leading to a loss of at least Shs4b.

On the same road, as a result of a contract variation for the Bakuli market lane of about 1.0km connecting to Lungujja Road—a distance of 1.6km—the price increased by Shs8.6b, which means an extra 0.6km stretch was constructed at an astronomical Shs18.6b.

In another variation, Kisaalita Road measuring 0.7km in Nakawa Division previously costed at Shs1.3b was substituted for Banda Central Road measuring about 0.9km at a rising cost of Shs2.6b.

This means that an extra 0.2km on Banda Central Rd cost Shs1.3b. In per km comparison, the 0.2km extension was at a rate of Shs6.5b per km whereas the initial 0.7km Kisaalita Road was costed at Shs1.8b.

We reached out to City Hall for a comment but were told there is no substantive director for engineering and technical services.

According to City Hall, Kampala Capital City Authority (KCCA) has a road network of 2,110km, of which only 620km is tarmacked and 1,489km unpaved.

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Nakawa division has the longest network of 180km of tarmacked roads as the Central Division trails with 148km and Makindye with 114km.   Makindye has the longest network of 391km of unpaved roads followed by Nakawa, Lubaga, and Kawempe.

Since the creation of the City Authority in 2011, it pitted the Executive against its implacable foe — the Lukwago-led political leadership at City Hall.

This creates two centres of power that often clashed in regard to the execution of works including urban infrastructure.

In this FY, the authority plans to reconstruct and upgrade a total of 69.7km of roads, 5km of associated drainages, 134km of pedestrian walkways and signalise 22 junctions, using a $288m or Shs1trillion purse from the African Development Bank (ADB).

The contracts for the projects have since been forwarded to the funder to grant the green-light, but according to highly-placed sources, this has renewed rivalries following claims of contractors paying huge kickbacks to influence the award of lucrative tenders.

Rising costs

This corruption in the procurement, among other factors, has contributed to the sharp rise in the unit cost per km of roads constructed within the city, according to documents Daily Monitor has examined and highly placed sources we spoke to.

Mr Gilbert Sendungwa, the senior Africa regional manager at the Infrastructure Transparency Initiative, a global initiative for improving transparency and accountability in public infrastructure, told Daily Monitor that part of the problem is the limited transparency in the tendering process.

“The cost of building roads has been growing to levels of discomfort and there are several factors; first, there is low local capacity so you find there are many foreign companies while at the same time local companies or doing little to improve on their capacity. Second, is the cost of money which is expensive in this town so contractors must take that into account. The third of course is corruption; for every 3km, you have an additional km added in to cater for such. Corruption exists due to the limited transparency.”

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He revealed further: “Nearly all factors are avoidable. If you get contract management right you can avoid all these. Likewise, if there is limited transparency on the tendering you find yourself in a situation where you don’t get fair prices.”

The costs are quite high nationally as Unra executes the mandate of construction. 
At the turn of the millennium 22 years ago, a km of road averagely cost — not adjusted for inflation Shs500m; seven years later the cost shot to Shs1.5b and today, the average cost per km is between Shs2b to 3b for national roads.

Local players are yet to match the capacity of multinational firms while there is no law to compel joint ventures to facilitate technology transfer.

It was estimated that the entry of Chinese firms into the Ugandan market could perhaps bring down the billing rates per kilometre to $800,000 compared to the past when the work was dominated by European and American firms. The American and European road construction firms previously charged an average of $1.2m for a km. On the contrary, the cost continues to rise even after Chinese firms entered the market.

Syndicated corruption engulfed Unra barely after it was formed in 2008 as it was turned into a den of thieves and commission agents.

Heads rolled in 2015 as new management under Allen Kagina was appointed to clean up the mess. 

The Justice Catherine Bamugemereire-led commission of inquiry in May 2016 revealed that of the Shs9 trillion allocated to Unra between 2009 and 2015, at least Shs4 trillion was “misappropriated.”

The Shs9 trillion was used to construct only 1,500km of roads in the same period yet according to rates published by the African Development Bank, these funds could have constructed 5,147km of roads in African markets and beyond.

A 2020 study by the NGO, ACODE, titled ‘Public Expenditure Governance in the Roads Sector’ details that despite continuous investment in the road sector with an average of 17 percent of the annual national budget over the last decade, there are reports of persistent public outcry about the poor state of roads and the deteriorating quality of works being executed.

Oiling the patronage wheels

“Other concerns are evident that expenditure on road construction has outstripped road maintenance, leading to very rapid deterioration of the road network, increased road safety risks, high vehicle operating costs and other maintenance costs. Recent studies have shown that the underlying causes of the challenges that have beset the roads sector are rooted in failures in governance including, poor planning, ambiguity and inconsistency in the strategic vision of the sector, limited capacity of agencies to implement their mandates, inefficient utilization of resources, inadequate effort to fight corruption, weak accountability in the sector, to mention but a few,” the study disclosed.

In early 2020, the Ministry of Works and Transport revealed it had hired a South African consultancy, M/S LEA Associates South Asia Pvt Ltd, and two Ugandan consultancies, Denmar Ltd, Uganda and KOM Ltd, to conduct a study on the unit cost for construction of roads in the country. The findings are yet to be made public.

But the ACODE study details that despite commitments on accountability and transparency in the sector, there are concerns about integrity. 

“There is virtually no data, mechanisms and tools to track performance and hold the roads sector accountable for the quality of spending, especially, for institutions outside the Works and Transport Sector,” the study notes.

Mr Sendugwa said Uganda has a higher unit cost per km for roads but inefficiency is rife. 
“It all goes back to political will,” he opined. “Corruption is mentioned 19 times in the current NRM manifesto, an indication that the problem is recognised, but the words transparency and accountability are mentioned once or twice. You cannot fight corruption in darkness; the problem is recognised but they are short on solutions.”

In 2005, barely three years before Unra was established, the most expensive road contract awarded then was the 43km-Kampala-Zirobwe road at $880,000 (about Shs1.6b, which was the exchange rate of the time) per km hinged on the high quality that was required to meet the standard axle loads.

Officials have attributed the rising road construction costs to the soaring prices of fuel (petroleum) lubricants used on most road projects; the price of a barrel having jumped from $26 in 2000 to $70 in 2007 and a barrel of bitumen (tarmac) from about Shs250,000 in 2000 to Shs850,000 in 2007. On numerous occasions, records show consultants and engineers quoting contrasting prices for the same projects.

While Unra and other urban authorities claim that market rates determine the actual unit cost through competitive bidding, the endemic corruption that has earned its place in Uganda has now permeated the road procurement sector.

According to the World Bank, corruption in public infrastructure contracts is widespread and can account for as much as 5 to 20 percent of transaction costs.

The jury is still out on whether Entebbe expressway is the costliest road in the world.

The highway linking the Kampala central business point and the Entebbe International Airport cost the taxpayer $9.2 million per kilometre, four times more than the average cost of $2 million in low and middle-income countries thus driving up the total cost of the project to $476 million.