Uganda: MPs Query Inflated Lubowa Hospital Loan

20 February 2019

Parliament — Lawmakers on Parliament's Committee on National Economy yesterday questioned two ministers over what they described as an inflated price for the construction of a super specialised hospital in the country.

The ministers were also questioned on the use of public funds to finance a private enterprise where the taxpayers will not have free access.

State minister for Finance (Planning) David Bahati and her counterpart, Dr Ruth Aceng (Health), were appearing before the committee to defend the $379 million (about Shs1.3 trillion) project to be constructed in Lubowa, along the Kampala-Entebbe Road.

The committee chaired by former Finance minister Syda Bbumba heard that loan request is to act as a guarantee through a promissory note to the investor in the construction of the project.

Once in place, Mr Bahati told MPs, the facility will save taxpayers from footing "expensive bills" involved in medical tourism by government officials.

However, in the process of scrutinising the loan request, MPs found that the actual cost of the project is Shs914.1b and not Shs1.3 trillion the government wants to borrow.

The MPs, including Mr Thomas Tayebwa (NRM, Ruhinda North), William Nzoghu (FDC, Busongora North) and Kassiano Wadri (Arua Municipality) put the ministers to task to explain what they called "inflated figures/project cost."

Mr Tayebwa asked why the cost of buying the hospital beds has been put at $ 940,000 ( about Shs3.4bn) as opposed to the market price of $350,000 (about Shs1.2 b).

Dr Michael Bukenya (NRM, Bukuya), who chairs Parliament's Committee on Health, questioned why government was more concerned with a facility to be utilised by opulent citizens some of whom are in high government positions rather than injecting the funds in "struggling" health facilities in the countryside.

"Whereas the idea for an international highly specialised hospital is good, I would suggest we put a precondition for government to first equip the health facilities in the districts," Dr Bukenya said.

The MPs also cited district hospitals and regional facilities that have been abandoned in favour of new projects. The hospitals, among them, Moyo, Yumbe, Nebbi, Kiboga, Kiryandongo, Bugiri, Kawolo and Gombe, remain in a sorry state, with some still using asbestos as roofing materials.

The renovation cost of all the 21 facilities was projected at $7m each, totalling to $147m (about Shs540 billion). But Mr Bahati told MPs that the government already signed the contract with the investor and that the danger lies in the legal implication of the cancellation of the contract.

"Once there is a missed opportunity to have the ISHU here in Kampala, we shall suffer default penalties because we have already signed the agreement," he said.

The minister also explained that the facility will be open to every citizen who can meet the cost and the charges shall not exceed the average prices for treatment abroad. The committee will meet again tomorrow to process the request by the government whose deadline is March 15.

Management. A joint partnership of FINASI/ROKO Construction Limited will develop and equip the facility over a two-year period, after which FINASI, in second partnership with the Papa Giovanni 23rd Hospital in Bergamo, Milan, will then operate the hospital for eight years after construction is complete.

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