Compensations a stumbling block to roads, power projects

Last October, the Parliamentary Commission on Statutory Authorities and State Enterprises (Cosase) recovered Shs26.3 billion that had been earmarked for compensation of persons affected on five road projects whose construction is ongoing. This was after a review of the Auditor General’s report for the previous financial year that had raised some red flags.
The monies were part of Shs47 billion the Uganda National Roads Authority (UNRA) had advanced to contractors between 2014 and 2015 for compensating project-affected persons (PAPs). Both Cosase and the Auditor General criticised UNRA for transferring money to a third party (contractors) yet it is meant for PAPs.
MPs on the committee also charged that contractors did not open up imprest accounts on which the money ought to be deposited and later withdrawn by UNRA.

Given the slow pace and bureaucracy involved in acquiring land for the roads right of way, UNRA officials argued that the law (Public Finance Management Act, 2015) provides that in the likely event that money earmarked for an activity is not absorbed purposefully, it is taken back to the Consolidated Fund.
“The process of reclaiming that same money is also very long, so we thought what we had done earlier was a short cut as long as we ensured strict oversight,” UNRA’s head of corporate strategy management Charles Kizito said.

Mr Kizito, in an interview, explained that by the time the process of land acquisition is concluded, including addressing of grievances, “the financial year has come to a close and you have to return the money.”
Current land acquisition procedures, according to the law last amended in 1970, involves planning to determine the different land options available for meeting the public need in a participatory; mapping the exact location and size of the land to be acquired; publishing a notice to inform owners and occupants in the designated area that the government intends to acquire their land and requesting people to submit claims for compensation for land to be acquired.
The notice describes the purpose and process, including important deadlines and the procedural rights of people.

Then, hold public sensitisation ad consultative meetings providing people with an opportunity to learn more about the project, and express their opinions and needs for compensation; determination of the equivalent compensation for the land to be acquired at the stated date of valuation; owners and occupants submit their claims which are valued by a government valuer. The valuer offers what they deem to be an appropriate compensation.
Disclosure of award and negotiations follow next.

Where PAPs accept the compensation, payments are effected but in the circumstances of disagreement they are allowed to bring in independent valuers and later seek court redress.
Following withdrawal of the money by the MPs, compensations on some projects such as the 77km Mukono- Katosi-Nyenga road hit a brick wall and UNRA had to wait until the new financial year, which started in July.
While in this case the most eyebrow raising question was; why would UNRA allocate the duty of paying project affected persons to Chinese who are neither privy to the tedious acquisition procedures nor communicate well with local communities, as the case raised concerns over the burden of acquiring land for projects and compensation in the country.

A necessary excessive burden
“There are scenarios where 90 per cent of the communities have accepted the value government is paying, then 10 per cent rejects it and the project is compromised or abandoned and monies returned or not utilised,” explains Land minister Betty Amongi, who in recent months has been drumming the proposed Land acquisition amendments.
The Lands Acquisition Act was last amended in 1970. On the other hand is the Land Act (1998) that provides for four land tenure systems; Customary, Freehold, Mailo and Leasehold. However, according to UNRA, each tenure system presents unique compensation challenges.

“The subject of the proposed amendment does not affect the status of ownership; rather it deals with land acquisition for public works. The proposal is to amend the Land Acquisition Act, to allow government to compensate the registered proprietors and other land owners prior and also while the development process of roads and other projects is ongoing,” Ms Amongi says.
It is a standard practice in many countries. If your land, business or buildings are impacted by, or taken for a public infrastructure construction project, you have to be paid first or later.
In Uganda, Article 273 of the Constitution vests power over land in the hands of the owners, so one has to be reasonably paid off before their land is taken away subject to Article 26 that provides that: “No person shall be compulsorily deprived of property or any interest in right over property of any description except where the taking possession is necessary for public use and or is made under the law after prompt payment of fair and adequate compensation.
The Supreme Court in the ruling of UNRA versus Irumba Asumani and Peter Magelah in 2014 reinforced that whereas Article 26 was not among the non-derogable rights, this does not give powers to government to compulsorily acquire people’s land without prior payment, and that such planned government projects do not fall under the exceptions of disasters and emergencies.
The court was ruling on the constitutional petition filed by UNRA, contesting an earlier ruling in which the Constitutional Court regarded the Land Acquisition Act of 1965 that gives government power to forcibly acquire property before payment of compensation, as “unconstitutional”.
The roads authority had attempted to compulsorily acquire land for the 92km Hoima-Kaiso Tonya road that was needed urgently to fast-track oil activities in the Albertine Graben.
As such, UNRA and other government agencies have found themselves in a difficult situation of having to look for extra monies in addition to that of projects for acquiring land or other property at every proposed right of way for projects.

A crisis in the making
In other circumstances, it has been revealed that government officials access information about projects and rush beforehand at the proposed sites to acquire land in order to cash in on the huge compensations since they are protected by law.
Energy minister Irene Muloni, addressing journalists on May 17, revealed that “land speculators”—likely officials with inside information— had invaded proposed sites for the massive oil infrastructure projects in Hoima and Buliisa. She said they would, however, exercise “extra” due diligence and sieve the list of claimants to sort out speculators.
The mad rush for land in the Albertine Graben started intensifying in 2010 when several activities started taking shape. During the same time, government commenced the land acquisition process in 13 villages for the Greenfield refinery. At least 1, 718 people were paid off for the refinery land.

As a result of heightened land speculations early this year, government put a caveat on all land transfers in the Albertine.
While in the circumstances most compensation cases are for ordinary people and hence justified, Ms Amongi, while officiating the opening of the Commission of Inquiry into land matters headed by Justice Catherine Bamugemereire, said the growing trend of “the selfish interests of the elite class that are targeting prime lands where government tends to either construct a road or discovers minerals and use such land to extort money from government” leaves a lot to be desired in the country’s quest for development.
Records obtained from UNRA also show there are several non-compensated cases on 19 road projects which were finished as far as six years back. These include Busega-Mityana, Fortportal-Bundibugyo-Lamia, Gayaza-Kalagi, Kabale-Kisoro-Bunagana, Mbarara-Bypass, Mbarara-Kabale-Katuna, Mbarara-Kikagati-Murongo Bridge, Gulu-Atiak-Nimule, and Hoima-Kaiso-Tonya.
Some of the road projects were sampled for investigations during the recently completed commission of inquiry into mismanagement of the roads authority since inception, whose report recommended criminal sanctions against a list of government officials who colluded in the gross diversion of monies meant for roads.

Past cases
The current UNRA management is working backwards to address the unsolved land grievances.
On the Hoima-Kaiso Tonya road for example, the UNRA commission of inquiry established that Shs12.4b was approved as payment of project-affected persons but Shs14 billion is certified as to have been paid and the extra Shs2b is not accounted for. A total of Shs208 million was paid out to non-existent property owners while Shs102 million was paid for land/property outside the road reserve.
On the Kampala-Entebbe Expressway, Shs8 billion was paid to people settled in wetlands, ideally government land: Shs11 billion was paid to claimants who issued erroneous land titles but likely Shs36 billion was actually paid because it was approved: Shs900 million was paid to non-existent people and Shs18 million in fictitious payments.
In total, an estimated Shs577b was pillaged through payments to ghost claimants and other dubious land transactions during the process of land acquisitions for various roads projects over a period of seven years.

Shadow minister of Works William Nzoghu, who also sits on the Committee on Physical Infrastructure, said while the manipulation of the compensation Bill has been a recurring issue, UNRA has a role to play either “its officials [are] buying land around the road sites or leaking information to people who buy and claim large sums of money.”
“I don’t know what we can do about it as a country but it [the situation] is a pity,” Mr Nzogu said. “We have information that on the Entebbe- Kibuye-Busega-Mpigi expressway [some] UNRA people bought land long time ago and now they are waiting to cash-in. How do you deal with a situation like that?”

Compensation costs
The 32km Kibuye-Busega-Mpigi road, financed by the African Development Bank to a tune of $151m (Shs535b) and whose construction is expected to start early next year, will follow a “relatively Greenfield alignment” according to the Environment and Social Impact report. It will impact an estimated 1,544 households that have to be paid off to relocate.
Mr Nzoghu, however, also criticised the proposed Cabinet amendments to the Land Act, 1998, and the Land Acquisition Act, 1965 to bring it up to date with the current realities of the need to fasttrack infrastructure projects, which he said is a ploy “to grab people’s land.”

Between July 2015 and June last year, the roads authority had spent close to Shs110b on payments for compensations from budgetary allocation of the financial year. In the budgetary framework for the next financial year, the authority outlines continuation of payments on a number of projects.
The second phase to expand the Kampala Northern Bypass, a 17km long road valued at $75.7m (Shs270b), cost $5.2m (Shs18b) in land acquisition by close of 2015/16.
On the 104km Mubende-Kakumiro-Kagadi road, valued at Sh484.9b, the land compensation bill was Shs10b.

UNRA’s executive director Allen Kagina, while appearing before the ongoing lands inquiry on May 20, revealed that speculators have already purchased land along the proposed right of way of the new 77km Kampala-Jinja expressway whose estimated cost is $1b (Shs3,578.7 trillion), factoring the component of compensations.
She mulled a proposal to freeze transactions on land it plans to build roads to stop occurrences of speculators buying land from the bona fide owners and escalate the prices.
In neighbouring Kenya, for example, in face of similar crisis has a piece of legislation in offing that will make a government valuer the sole authority on how much a parcel earmarked for acquisition is worth, and will favour land swaps to allow projects to go on even as disputes are being resolved in court.