KAMPALA: The World Bank has faulted the Government of Uganda for poor implementation of infrastructure projects, which has in the process led to a waste of trillions of shillings in taxpayers’ money,
The World Bank in its 19th Economic Update on Uganda released on Thursday, 30 June 2022, indicates that whereas Uganda has undertaken several reforms to strengthen its public investment management (PIM), including setting up a PIM department in the Ministry of Finance, several measures and guidelines have not been adhered to, leading to some projects not being completed in time, which becomes an additional cost to government.
Public investment refers to government spending on economic infrastructure such as airports, roads, railways, water and sewerage systems, among others.
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“Notwithstanding the progress achieved in putting in place these processes through the implementation of the PIM action plan, several challenges remain. There are instances in which measures and guidelines have not been adhered to. According to the Auditor General’s Report for FY20/21,42 out of a sample of 371 projects in the public investment program, 245 projects (66 percent) with total project values of UGX643.4 trillion, did not have feasibility studies undertaken before they were allocated financing,” the World Report reads in part.
“Some externally funded projects have not followed national guidelines and aspirations when undertaking feasibility studies. On top of this, other challenges crop up down the project cycle, such as securing the right of way after projects have started implementation; inadequate counterpart funding to facilitate elements of projects that would ideally be funded by government under externally funded projects; and poor project operation and maintenance of assets that have been created,” the report adds.
Speaking at the release of the report at Kampala Serena Hotel, Dr Mukami Kariuki, the World Bank Country Manager for Uganda said: “The 2015 IMF estimates say an average country gets 30% less output in terms of physical infrastructure for a given expenditure than the efficient countries. Up to 2/3 of this gap could be clawed back through improved PIM.”
The World Bank quotes Section 23 of the Public Finance Management Act (Amended 2015), which imposes a legal requirement for multi-year commitments to support a lifetime projects financing that, in most cases, requires more than one year to be executed.
The World Bank report says yet not all projects are funded systematically.
As a result, the report states, cost and time-overruns on projects, high commitment fees in case of externally funded projects, and shortened life span of projects due to poor operation and maintenance of created physical assets persist.
“The Auditor General’s Report for FY20/21 again noted that out of a sample of 371 projects in the PIP, 342 projects (92.2 percent) with budgets totaling UGX39 trillion had gone past their planned exit periods, with some extended by more than 12 years and only 40 percent of the projects in the Public Investment Plan (PIP) were still within their expected time,” the report states.
The World Bank says capacity must be built across government to support the procurement function to manage not only the process to the point of award of contract, but also contract management and supervisions.
“The new e-governmental procurement system will need to be harmonized and integrated with the IBP. And government to explore technology to improve project implementation. The Building Information Modelling (BIM) – which is the foundation of digital transformation in the architecture, engineering, and construction (AEC) industry – is one such venture to explore for managing investments in infrastructure programs,” the report states.
The report suggests that further work will still be required to create the pool of resources needed to manage projects across the entire PIM cycle.
“For instance, project preparation and appraisal skills need to be entrenched in all programs, MDAs, and different levels of government, and the project managers that are critical players in project implementation need to acquire modern project management skills.” It says.
It adds that the PIM Centre of Excellence in Makerere University will need to be nurtured to maturity to ensure a sustainable and affordable mode of building these capacities.
“Third, the project preparation fund to ensure that priority projects undergo feasibility and/or pre-appraisal studies while awaiting inclusion to the PIP, has recently been set up in NPA, which is a major step. For sustainability, such a fund will need to put in place a proper implementation and governance structure to sustainably address the funding challenges in project preparation. Lastly, beyond the pre-investment stage, the rest of the PIM cycle (especially project implementation and asset management) must be improved if projects are to yield the expected dividend.”
