Govt halts new road projects as budget constraints bite infrastructure sector

The government has announced it will not undertake any new road construction projects in the 2026/27 financial year, opting instead to prioritise the completion of ongoing works amid significant budget shortfalls.

This revelation was made by Edward Katumba Wamala, the Minister of Works and Transport, while presenting the Ministry’s 2026/27 Ministerial Policy Statement before Parliament’s Committee on Physical Infrastructure.

Katumba said the Ministry is shifting focus to ensure that existing projects are completed efficiently, with particular emphasis on resolving long-standing bottlenecks such as land acquisition and unpaid contractor claims.

“The Ministry is saying, let us finish ongoing projects as a priority. Let us get enough money to pay for land acquisition because we have contracts where a contractor is on site but has no access to land,” he said.

He added that government also intends to clear outstanding arrears, noting that delayed payments are attracting interest and increasing the overall cost burden. “Let us pay all these backlog areas because they are attracting interest—free money going,” Katumba emphasised.

The decision comes against the backdrop of a constrained infrastructure budget. Out of the UGX2.3 trillion required for national road projects, only UGX690.5 billion has been allocated for the coming financial year—less than a third of the Ministry’s needs.

Dr. Edward Ssimbwa, Commissioner for Public Structures at the Ministry, defended the move, revealing that project implementation has been plagued by delays and suspensions. Of the 67 projects currently under implementation, 28 have experienced delays, while 13 have been abandoned or suspended altogether.

He noted that the decision to halt new projects aligns with a directive from the Ministry of Finance requiring all government agencies to prioritise the clearance of domestic arrears and avoid initiating new commitments. Accounting officers who fail to comply risk penalties.

Parliament was informed that the Ministry closed the 2024/25 financial year with arrears amounting to UGX1.489 trillion. Although UGX541 billion has since been paid in 2025/26, an outstanding balance of UGX948 billion remains.

“We further expect UGX218.456 billion once these arrears are released by the Ministry of Finance in the next quarter,” Dr. Ssimbwa said. “However, in 2026/27, the Ministry is yet to receive a specific allocation for arrears clearance, and the current budget is insufficient to both clear arrears and meet operational needs.”

He warned that failure to clear the arrears will result in continued accumulation of interest, further widening the financial gap.

Despite these challenges, the Ministry’s overall budget has increased to UGX6.573 trillion in 2026/27, up from UGX5.920 trillion in the current financial year. The increment is largely attributed to the anticipated commencement of the Standard Gauge Railway (SGR) on the eastern route and plans to recruit additional staff.

However, the Ministry still faces a funding gap of UGX3.641 trillion, with only UGX1.028 trillion of the required funds secured, leaving priorities worth UGX1.923 trillion unfunded.

Key infrastructure projects remain underfunded. The Standard Gauge Railway project received UGX149 billion out of the UGX515 billion required, leaving a deficit of UGX366 billion. Similarly, the Uganda Airlines received UGX184.73 billion against a request of UGX195 billion.

Funding gaps are also evident in road maintenance and urban infrastructure. The Ministry requested UGX1.758 trillion for national road restoration but received only UGX994.27 billion. District, Urban and Community Access Roads remain underfunded, alongside critical drainage improvements, ferry operations, and street lighting.

Additionally, the Uganda Railways Corporation received just UGX56 billion out of the UGX189 billion required for the rehabilitation of the metre gauge railway network.

Officials warn that unless funding gaps are addressed and arrears cleared, the country’s infrastructure development agenda could face further setbacks, with delayed projects, rising costs, and reduced contractor confidence likely to persist.