The Committee on Public Accounts (Central Government) has sounded alarm over inflated costs of government-funded infrastructure projects, revealing that taxpayers are paying up to three times more for roads of similar length and quality.
In its report on the Auditor General’s findings for the 2023/2024 financial year, PAC showed glaring discrepancies in project costs. For instance, rehabilitating a 1.37-kilometre road in Arua City cost Shs13.4 billion, while 2.68 kilometres in Fort Portal cost Shs21.4 billion. In contrast, a one-kilometre stretch in Mbarara City costs only Shs4.9 billion.
“These roads measure almost the same in length, yet the costs vary abnormally. Such discrepancies are unjustifiable and point to inflated contracts and loss of public funds,” said Muhammad Muwanga Kivumbi, PAC Chairperson, while presenting the report during Tuesday’s plenary, chaired by Speaker Anita Among.
According to estimates from the Ministry of Works and Transport, the average cost of upgrading a kilometre of paved road should be Shs3.1 billion. This makes the Arua project cost more than three times the benchmark, while the Fort Portal works could have financed nearly seven kilometres instead of the reported 2.6 kilometres.
The report also flagged exorbitant supervision costs, which in some cases consumed up to 20 percent of the project budget. Arua’s 1.37km road attracted Shs3 billion in supervision fees, while Mubende spent Shs2.5 billion supervising a 2.86km stretch.
“These inflated costs have deprived Ugandans of better roads, schools and hospitals. Borrowed money is wasted on enriching a few individuals. Government is losing money through inflated contracts and weak supervision,” Muwanga Kivumbi stressed.
PAC further revealed that Uganda is losing value for money on loans, with most funds lying idle despite accruing interest. Out of Shs7.958 trillion in loans and Shs3.97 trillion in grants secured for development projects, less than half was absorbed—48.2 percent of loans and just 25.6 percent of grants.
A review of 17 loans showed an average disbursement of 36.7 percent, with some projects recording almost no utilisation. The Mbarara-Masaka Transmission Line, for example, had a disbursement rate of only 0.3 percent despite its completion deadline passing in June 2023.
Speaker Among expressed concern that government continues to pay interest on unused loans.
“We will give this item a day’s sitting for debate. We need to look at it seriously because we are paying for loans that we are not using,” she said, directing the Ministry of Finance to submit an updated report on all borrowed but idle funds.
The Minister for Defence and Veteran Affairs, Jacob Oboth, urged Parliament to craft proposals that would strengthen loan management and ensure value for money.
