Milton Olupot And Mary Karugaba
3 November 2009
Kampala — THE Foreign affairs ministry diverted sh8.5b of the budget for the Commonwealth Heads of Government Meeting (CHOGM) to finance the construction of the Northern Bypass, members of Parliament learned yesterday.
In a report submitted to the committee, the Permanent Secretary, James Mugume, said the money was transferred to the works ministry, at the request of the finance ministry, to facilitate the construction of the bypass on grounds that it would ease the traffic flow during CHOGM.
The Northern Bypass was, however, only opened last month, three years after CHOGM, despite the fact that works started in August 2004 and were supposed to be completed in November 2006. It was financed by the European Union, while the Government paid the cost of land acquisition, compensation and taxes.
Mugume led a delegation of over 20 ministry officials to answer queries raised by the Auditor General's report for the year ending June 2008, specifically on CHOGM issues.
The committee was particularly concerned about the delay in the preparations for the summit, resulting in hurried contracts which led to loss of money by the Government.
During the proceedings yesterday, the public accounts committee demanded for a breakdown of the 6,000 hotel rooms constructed with incentives from the Government in preparation for CHOGM, held in Kampala in 2007.
The committee, chaired by Nandala Mafabi (FDC), instructed Mugume to furnish the committee with details of rooms in each of the hotels that benefited from the fiscal incentives and infrastructure under CHOGM.
They also demanded that the ministry provides contracts for venues and conferences the ministry entered into with each of the operators.
The Auditor General in his report queried why the charges for the hotels and conference facilities were hiked.
He noted that the rates varied significantly among comparable hotels and wondered whether proper negotiations were done to obtain better prices.
MPs in a charged mood yesterday alleged that there could have been deliberate delays by Government officials in order to create an emergency situation which would enable them reap from the deals.
NRM members Theodore Ssekikubo, Tom Kazibwe, Alex Byarugaba, Rose Namayanja and Frank Tumwebaze led the verbal assault, demanding that Mugume provides a chronology of events so that Parliament could focus on who was responsible for the delays.
In his written submission, Mugume explained that the objective of the Government's investment in hotels was to increase the number of rooms to meet the CHOGM requirements and strengthen the hospitality and tourism sector.
According to the Auditor General's report, the Government spent sh29b on investments in the Munyonyo Commonwealth Resort, and another sh2.2b in J&M Hotel on Entebbe Road.
Of this, about sh16b has not been turned into shares despite a Cabinet directive, the Auditor General noted.
"The terms under which the Government was made to finance a private venture have not been concluded. It's not clear how government intends to recover such funds," the report states.
He also noted that the Government spent a total of sh6b on furnishing and refurbishing of hotels and another sh23b in advance payments for rooms and conference facilities.
Mugume explained that out of the sh6b given for furnishing, a total of sh4b was paid for refurbishing and furnishing Serena Hotel, Munyonyo Commonwealth Resort and the VIP lounges at the Old Airport and the International Airport at Entebbe.
He explained that if there were any delays, they were as a result of financial constraints and delayed release of funds by the Ministry of Finance.
"Allocation of budget is not our responsibility; it is for finance and Parliament," he said, adding that Parliament approved the budget only in August 2007, just a few months before CHOGM.
The CHOGM budget was released in three parts, with sh10b released in the 2005/2006 financial year, sh80b released in 2006/2007 and another sh120b in 2007/2008. Additional money was sourced elsewhere.
On recoveries so far made on hotels, Mugume said about sh3.5b was still outstanding. He noted that a final reminder had been sent to the debtors and "legal redress shall be sought thereafter."
Mugume also told MPs that the Government still owes various suppliers sh7b in respect of CHOGM and the Organisation of the Islamic Conference.
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