Govt  to borrow UGX1.2T for Kampala-Jinja Expressway

Govt to borrow UGX1.2T for Kampala-Jinja Expressway

The government has bowed to pressure and agreed to borrow up to Shs1.23T for the Kampala-Jinja Expressway, after MPs rejected to process the loan for the oil roads, citing neglect of eastern Uganda.

In September 2019, MPs from Eastern Uganda protested the decision by Government to place Kampala-Jinja Expressway among the upcoming projects to be undertaken under the Private-Public Partnership (PPP), citing failure to secure a financier for the project.

During the debate, some MPs accused Government of hatching a plan to reduce the population in Eastern Uganda by condemning them to perennial jams on Jinja Road and vowed not to process any loan until the Government secures loans for the Jinja Expressway.

Some MPs wondered how the Government would commit the Kampala-Jinja Expressway totaling to 85Kms to a PPP yet on many occasions, roads to other parts of the country have been constructed on loans.

The protest gained momentum when Speaker, Rebecca Kadaga who doubles as Kamuli Woman MP joined the protest and threatened to take off her gloves if the Executive continues with bringing on private investors to the project and warned the Ministry of Works and Transport against experimenting the PPP arrangement with Eastern Uganda, “Everywhere in the country we have got loans, now in the east you say PPP it is unacceptable, we don’t want it we want answers, when are you going to build the road?” Kadaga asked.

In November 2018, the Kampala-Jinja Expressway and the Kampala Southern Bypass Highway cost was quoted at US$1.55 billion, funds that will be raised through a public-private partnership arrangement and the African Development Bank is said to have approved US$229.5M in sovereign loans to go towards the development of this transportation system.

Following the protest, David Bahati, State Minister for Planning tabled a loan request with USD229.47m about Shs850.55Bn to be obtained from the African Development Bank and USD105m about Shs389.19Bn from the French Agency for Development.

Both loans have a grace period of eight years and 25 years maturity period, however, the tentative interest for the African Development Bank is 2.25 percent with a commitment fee of 0.25 percent for the non-disbursed amount.

On the other hand, money from the French Development Agency will attract a tentative interest of 1.5 percent while failure to pay commitment fees will attract a 0.5 percent annual interest on nun-disbursed amounts.

Speaker Kadaga subsequently allowed the government’s proposal to borrow USD119 million about Shs440.6Bn to upgrade three oil road projects which she had declined to refer the loan request to the Parliamentary Committee on National Economy for further scrutiny.

Source: PMLDaily

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