CLARIFICATION ON ALLEGATIONS THAT 24BN HAS BEEN LOST ON MUKONO-KYETUME-KATOSI/KISOGA-NYENGA ROAD PROJECT Uganda National Roads Authority (UNRA) has noted with concern the negative and alarming publicity in the media that shillings 24 Billion has been lost on Mukono-Kyetume-Katosi/Kisoga-Nyenga road project. UNRA would like to take this opportunity to assure the general public and tax payers whose resources are being used to finance this project that we are taking responsible actions to safeguard this project and ensure it is implemented as promised. The correct facts regarding this project are the following: - 1. The contract for construction of Mukono-Kyetume-Katosi/Kisoga-Nyenga road project was awarded to EUTAW, an American road construction firm, after an international bidding process. This project is being supervised by another international company, M/s Arab Consulting Engineers, from Egypt. UNRA is working with both the consultant and contractor for this project to make sure all contractual obligations are met, project specifications are followed and the project is completed on time. 2. As far as we are concerned, no funds have been lost on Mukono-Kyetume-Katosi/Kisoga-Nyenga road project as alleged. UNRA made an Advance Payment of approximately Uganda Shillings 24 Bn to EUTAW after the company had submitted the required securities from financial institutions and Insurance companies that were perceived as credible at that time. UNRA carried out the necessary due diligence to confirm the legitimacy of submitted instruments following which payment was effected. 3. The purpose of Advance Payment is to allow the contractor mobilise equipment, personnel, materials, set up camps and commence works. The contractor on Mukono – Kyetume – Katosi / Kisoga – Nyenga road project has fully mobilized, there is active equipment on site, the site camp is ready and works have commenced. The Advance Payment is recovered over a specified duration as works are ongoing. These advanced monies are deducted from each interim payment certificate under the contract until it is all recovered. 4. As part of our routine risk management strategy, UNRA Internal Audit carries out regular and random due diligence on a number of new projects. This includes further verification of Bank and Insurance Guarantees submitted to UNRA in the FY 2013/14. During this process, all institutions that have provided guarantees to the various contractors are contacted for further verification. It was during this effort that it was noted that the guarantees submitted by EUTAW were indeed defective. UNRA immediately informed the contractor of this anomaly and requested them to submit replacement instruments to ensure that the advanced monies were secured at all times. The contractor has since submitted the required replacement guarantee or instrument which has been verified with the provider. 5. While it is true that UNRA may have potentially been exposed to a fraud with a risk that the UGX 24 Bn advanced to EUTAW would not have a security backing it up, this situation has been largely avoided for now. UNRA is currently reviewing its due diligence protocol to make sure Government funds are not exposed to this kind of risk again. UNRA is cooperating with the Inspectorate of Government, the Uganda Police and other enforcement institutions to make sure that a thorough investigation is carried out as per their mandates. 6. The people along Mukono-Kyetume-Katosi/Kisoga-Nyenga road have been waiting for this upgrading project for a long time and we want to assure them that the works on this important road will continue. The funds for compensation of the affected people have also been released and payments will commence on the 21 August 2014. Dan Kitakule Alinange Head Corporate Communications UNRA
Posted on: Wed, 06 Aug 2014 11:42:26 +0000
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