UNRA faces UGX 250 million daily penalties for unpaid construction works
The committee pressed her on the reasons behind the abandonment of road projects and the accumulation of interest payments to contractors.
The Executive Director of the Uganda National Roads Authority (UNRA), Allen Kagina, revealed that Ugandan taxpayers are shouldering interest payments amounting to Shs250 million daily due to unpaid works and services provided by contractors and suppliers.
She explained that this figure fluctuates based on the authority’s capacity to clear these debts.
Kagina made the disclosure while appearing before Parliament’s National Economy Committee, during a session discussing the government’s loan request of Shs324.922 billion for the construction of the Laropi-Moyo-Katuna-Kamuganguzi Road Project.
The committee pressed her on the reasons behind the abandonment of road projects and the accumulation of interest payments to contractors.
“The interest stems from our debt — outstanding Interim Payment Certificates (IPCs) owed to contractors and suppliers. It fluctuates because, with every quarter, we manage to pay off a portion of the debt. However, as we clear some, new debt accumulates, and currently, it’s growing at a rate of Shs250 million per day,” Kagina explained.
Denis Oguzu, MP for Maracha County, questioned why UNRA continued to accrue such substantial interest while road projects were being neglected, citing the delayed Koboko-Yumbe project as an example.
He criticized the government for misleading the people of West Nile, where the contractor has reportedly abandoned the site, leaving the project incomplete.
“UNRA continues to accrue interest because they aren’t acting. How do these costs arise on the government? Is the Ministry of Finance failing to meet its obligations? Contractors are mobilized, but the work is left undone, leading to significant costs for Ugandans,” Oguzu remarked.
This development follows a report from the Auditor General, which revealed that Uganda incurred fines amounting to Shs2.2 billion in interest charges due to delayed payments to project contractors.
As of December 2023, both UNRA and the Ministry of Works and Transport had outstanding payments totaling Shs804.26 billion, with UNRA accounting for Shs588.77 billion and the Ministry of Works holding Shs215.49 billion. This translates to a combined daily interest payment of Shs1.61 billion for UNRA and Shs590.38 million for the Ministry of Works.
The Auditor General warned that these outstanding payables reflect poor budgeting practices and pose the risk of litigation and further penalties for delayed payments. As of June 30, 2023, UNRA had already paid out Shs11.93 billion in interest for IPCs that were not settled within the agreed timelines.
