In March this year 2019, Parliament, amidst controversy, approved a guarantee of US $379 million (1.4 trillion Shillings) to a private developer (Finasi Roko Construction SPV Limited) for the construction of the international specialized hospital in Lubowa, Wakiso district. Based in Italy, Finasi ostensibly specializes in the construction of health care facilities. The facility is expected to have a 264-bed specialized Healthcare capacity operated as a world-class internationally accredited facility to treat conditions for which Ugandans have been travelling abroad.
The project funding mechanism is through a promissory note from Ugandan government as a public-private partnership whereby government is expected to finance the firm to construct and run the specialized facility and payback within eight years from the commencement of operations.
Issues that were overlooked
Before the project was approved, it was presented to parliament as an emergency and was challenged by a cross section of Ugandans including MPs, Medical professionals, media and civil society on various grounds including the following: outright rejection of parliamentary committee minority report; inflated costs; high interest rates of the loan despite proximity to debt GDP threshold; flouting of due diligence procedures; a peculiar unprecedented funding mechanism of guarantees to a private entity; allegations of corruption; the dubious nature of the investor whose track record was shady; negation of cheaper local health options and other citizen priorities; and many other unclarified issues. Less than 3 months down the road, the country wakes up to reports that when the financing bank released the first installment of $87m (Shs327b) only $50m (Shs188b) was received on the Stanbic Bank project account, indicating that a whole $37m has disappeared even before work begins, let alone the delayed commencement of the project.
UDN and likeminded CSOs, professional associations and concerned citizens are on record for having put up a spirited fight calling for due diligence if not outright cancellation of the project but this fell on deaf ears. A few of the sites highlighting such calls are in the links below.
Call for action – Expose the culprits or stop the project and lose less
But all is not lost. Since at this early stage we have already started seeing huge pitfalls, it’s time to reconsider the entire project. Meanwhile we call upon parliament to demonstrate patriotism and investigate the allegations, with a view to expose all the culprits involved in the scum. A serious credibility check should also be done on the entire process as well as the people behind the project, such that in case there are worse scandals awaiting us, cancel the project, if it means losing less now than losing more later.
“Hard decisions now postponed will later, in retrospect appear smaller if measured against tomorrow’s troubles” Former UN Secretary General Dag Hammarskjold. We can’t agree more on Lubowa Hospital.
The writer is Director of Programmes at Uganda Debt Network