General z+256'414'3.20101-9 Office of the Minister Dir t+256-414'235730 Ministry of works and TransPort z+256-414-255028 PIot 57-59 Jinia Road Fax :+256-414-236369 P.O. Box 7174 E-rnail: [email protected] Website: www.works.go.ug - ln any correspondence on this subject THE R,EPUBLIC OF UCANDA please quote No. MIN /PERS/10/2

24th January 2020

The Clerk to Parliament Parliament of Uganda KAMPALA

FORWARDING THE STATUS BRIEF ON DEVELOPMENT OF OIL ROADS INFRASTRUCTURE IN THE ALBERTINE REGION FOR INFORMATION TO HON. MEMBERS OF PARLIAMENT

In reference to the above subject, I would like to share the attached copy of the captioned brief and request that you upload it for Hon. Members of Parliament for their information.

Gen ard Katumba - Wamala MINISTER OF WORKS AND TRANSPORT

Copy to: The Rt. Hon. Speaker of Parliament, Parliament of Uganda The Chairperson, Committee on Physical Infrastructure The Chairperson, Committee on National Economy The Chairperson, Committee of Budget The Permanent Secretary, Works and Transport

Transport Infrastructure and Services Sacio- Mission: To promote adequate, safe and well maintained Works and for Economic DeveloPment of ugancla 4: v ffi Uganda National Roads Authority ffiffiffi Oil Roads lnfrastructure Projects in Albertine Region

I.iI

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1 INTRODUCTION The Government of Uganda and its Oil Partners through the Lake Albert Basin Development Committee (LABDC) set a target to achieve First Oil by 2O20.ln order to achieve this target, key enabling infrastructure, such as road network, must be in place. Accordingly, Government together with the oil partners identified the following Oil Roads required to be upgraded in order to achieve the 2020 target. The total length of the identified oil roads is approximately 700km.

Table 1: List of Oil roads to be raded Length No Road Name (km) District Traversed Status of Roads 1 -Butiaba-Wanseko Road 111 Hoima. Buliisa Works in proqress 2 Masindi-Biiso u Masindi Works in proqress 3 Masindi-Bugungu via Murchison Falls BO Masindi Works in progress National Park 4.' Hohwa-Nyaironqo-Kyarush esha- Road 25 Hoima Works in orooress 5. Wanseko-Buounqu Road 23 Buliisa Works in proqress 6. Buh im ba-Nalweyo-Kakindu-Kakum iro- 93 Mubende, Works in progress Mubende 7 Ssembabule, Mpigi, Lusalira- Nkonge-Sembabule 97 Contract award stage Masindi 8. Buounou - Buliisa 29 Buliisa Works in proqress 9. Kabale - Kiziramfumbi road 30 Hoima Works in progress 10. Tangijunction Paraa (lncluding Tangi - 22 Nwoya Works in progress Gate & Emmi Bridqes) 11. Kabwova-Buhuka 43 Hoima Procurement staqe 12. Karugutu-Ntoroko (Via Semiliki 55 Fort Portal Procurement NationalPark) stage

2 CONTRACT PACKAGING To aid the implementation process, the above listed roads have been packaged into six (06) works contract packages as summarized in table 2 below;

Table 2: Contract com ris the listed Roads in Table 1 Contract Package Gontractor Pack No Design and Build of Masindi (Kisanja)-Park Junction and China Communications 1 Tangi (Pakwach) junction-Paraa-Buliisa and Wanseko- Construction Company Bugungu Roads upgrading Projects(159km) (cccc) Chongqing lnternational CivilWorks for the Upgrading of Hoima-Butiaba-Wanseko 2 Construction Company Road (111km) to paved standard. (crco) Design & Build of Buhimba-Nalweyo-Bulamagi & Bulamagi- 3 China WuYl Co. Ltd lgayaza-Kakumiro roads (93km) Design & Build of Lusalira-Nkonge-Lumegere-Ssembabule 4 Not yet Procured roads (97km) Design & Build of Masindi-Biiso, Kabaale-Kizirafumbi & China Railways No.7 5 Hohwa-Nyairongo-Kyaruseha Roads (1 06km) Group Company Design & Build of Kabwoya-Buhuka and Ntoroko-Karugutu 6 Not yet procured roads (98km)

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Y 3 PRE.FINANCINGCONSTRUCTIONWORKS

The Contract Agreement between GoU represented by UNRA and the Contractors was to the effect that the Contractors were to Pre-finance and execute works for a period of 12 months from the commencement date and GoU would refund the Contractors for Works executed.

The Pre-financing of works by Contractors for packages 1-3 commenced in April 2018 and ended in July 2019 before GoU secured the Loan from Exim Bank.

GoU represented by UNRA also signed works contract with the Contractor for package 5 and works commenced in May 2019. The Pre-financing period for this package is l2months and will end in May 2020. The Employer is expected to pay the contractor for works done within this period and also continue paying for works to be executed thereafter.

4 STATUS OF LOAN REQUEST

The request for Loan for packages 1,2 & 3 was cleared by the Committee on National Economy in September 2A19 and the Parliament of Uganda in December 2019 to allow GoU/lt4oFPED finalised the arrangements to secure the Loan from EXIM Bank. This is therefore to note that by December 2019 GoU had not secured the required Loan.

Further, Cabinet memo for loan for package 5 was also submitted to the Prime Minister for clearance before submission to Cabinet for approval on 15 October 2019 and a presentation was scheduled for 20 November 2019 at the OPM offices. However, the presentation was postponed because both the Prime Minister and the Secretary General were not around at the time and it was rescheduled to another date. On 16 December 2019, UNRA was again called on short notice to attend the presentation of the Cabinet Memo on package 5 in Entebbe on the 16 December 2019.

The presentation did not take place in Entebbe as planned. However, the meeting took place at OPM Office in Kampala and chaired by the Hon. Prime Minister on 20.12.2019. At this meeting, it was noted that Cabinet had already sat and debated on Package 5 but there were two pending issues that were observed at the time regarding high project cost and comparison of cost with that of SOGEA-SATOM who had earlier on approached the President over the cost difference between their offer and that of Package 5.

The meeting noted that SOGEA-SATOM did not bid for package 5 but package 4 and that could not affect progressing the process of securing the loan. UNRA was however advised to provide the cost of the project that SOGEA-SATOM was proposing to design and implement and compare with that of package 5 and send to MoFPED. And MoFPED at the same time was requested to look at the financialterms and conditions and advise the Cabinet. The issue of securing loan for package 5 was at the Cabinet level pending clearance.

5 LOCAL CONTENT All Civil Works contracts have 30% Local content that was included in the Contracts to be implemented by the local Contractors/Providers. AllWorks Contracts that commenced last year

National Oil Roads lnfrastucture Projecb in Albertine region - 2020 Page 3 Proiect Brief - Critical Oil Roads lnfrastructure Proiec[s in April 2018 and that in May 2019 and were ongoing, had got Local Content participation (about 9 local firms engaged by tvlain Contractors).

The UNRA's Taskforce and the Project Management Team were monitoring the engagement and performance of the local contractors in line with the Contract requirements. A monitoring tool had been developed by the team that was guiding the Monitoring and Evaluation process.

However, because of financial constraints, the performance of the local contractors was still falling below average compared to those of the main contractors. There is also poor planning noted by the Project Management Team adding to the delays being experienced. Government should come up with a deliberate effort to support the local contractors to handle bigger and complex projects in a way completive to the lndustry/lnternational Standards.

6 STATUS OF WORKS AND LAND ACQUISITION The status of the works contracts and land acquisition for the above-mentioned roads is summarised as follows. The Contracts period for all the ongoing works is 36-months;

6.1 Works Contracts

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As at December 2019, the following Contractors and Supervisors had been contracted to I implement Oil roads for packages 1,2,3 and 5; a) Package 1: - The contractor is CCCC and the consultant is AECO in association with TECHO Consult. b) Package 2: - The contractor is CICO and the supervisor is UNRA in-house Construction Supervision Team. c) Package 3: - The contractor is China Wu Yi and the supervisor is called KAGGA and Partners. Package 5: - The contractor is China Seventh Group Construction Ltd and the consultant d) I to supervise the works is NET Consulting Engineers and Architects PLC JV KATT i Consult Ltd and Stadia Eng. Works Consultant PLC.

6.2 Cost of the projects

Table 3 and 4 below summarise the status of Works,

Table 3: Status and Cost of the Road Status Cost of the project Package (USD)

Packaqe 1 Works commenced in April2018 and it is ongoing 218,888,518.4 Packaoe 2 Works commenced in April201B and it is onqoinq 179.538.545.59 Packaqe 3 Works commenced in April2018 and it is ongoing 138,488,356.00 Packaqe 4 Procurement staoe (Contract award staqe) - Bid Price 130,070,588.20 Packaqe 5 Works commenced Mav 2019 and it is onqoinq 135.744.s37.80 Package 6 PPDA Cancelled the Procurement and UNRA to initiate N/A procurement in February 2020.

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Table 4: Status of Work and Interim nt Certificates Amount of Money Outstanding Road Time Physical Paid by end of Dec Payments by end Pack Progress works to date. 2019 of Dec 2019

1 55.6% Actual is 38.0% 13.685m USD (a9.38bn) 41.64 m USD (150.2bn)

2 56.9404 Actual is 43.44o/o 11.36m USD (41.0bn) 33.12m USD (119.5bn)

3 56.96% Actual is 24.4o/o 7.57m USD (27.3bn) 9.92Musd (35.8bn)

Pre-financing stage. No Pre-financing stage. No 5 22.204 Actualis 5.0% payment required payment required

6.3 Pending Payments

Total amount of money required by the Contractors for works already executed since April 2018 by December 2019 was UGX 328.0Bn that should be mobilized by the Employer and paid to the respective Contractors.

6.4 Land Acquisition The status of Land acquisition is as shown below in table 5 below and supplemented in the narrative that follows;

Table 5: Status of Land Com n Road Packase No. Lenqth of Road, km Land Acquired Packaqe 1 159 90.0% Packaqe 2 111 78.7% Packaqe 3 93 87.2Yo Packaqe 4 97 47.2% Package 5 106 74.8Yo Package 6 98 90.0%

i. Package 1, All Right of Way had been acquired. However, the team was carrying out accountability report that was at 80% completion and carrying out grievance management. ii. Package 2, Realignment was done at chainage 00 and kilometre 14 and allthe valuation reports had been prepared and submitted to CGV pending approvalto trigger payments. iii. Package 3, realignment was done at kilometre 93 and valuation report prepared and submitted to CGV for approval. And between kilometres 83-92, valuation reports were prepared and submitted to CGV and approved and payments made. iv. Package 4, Supplementary report 1 covering Kasambya Town had been delivered to CGV and the team has commence on boundary opening for titled land that were atfected by the ROW v. Package 5,15o/o of land along Kabaale-Kizirafumbi had been acquired, about 71% of land along Howha-Nyairogo-Kyarusesha-Butole had also been secured and 61% of

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land was acquired along Masindi-Biiso link. vi. Package 6, All PAPs along Ntoroko-Karugutu were paid and about 90% land acquired. However, PAPs in Kanara and Rwebisengo had not been compensated Their payments were expected in the next Quota. And about 81% land along Kabwioya-Buhuka had been acquired.

7 CHALLENGES AFFECTING IMPLEMENTATION OF WORKS Challenges affecting the implementation of the project were Lack of funds, Environment, Procurement and Land related matters. The challenges included but not limited to the following; i. Land Acquisition process had largely been delayed due to lack of adequate funds and management of various land related conflicts along all the packages; ii. Failure by GoU to secure funds and fully pay the contractors by the end of the Pre- financing period in July 2019 affected the implementation strategies and deliverables of various activities planned by the contractors. iii. Most of the project roads traverse through very sensitive echo-system that require wider consultations by NEMA prior to approvals of the ESIA reports for roads and bridges. iv. Land conflicts, absentee land lords, issues of land values, lack of bank accounts and land titles remain a big challenge in the acquisition of road project corridors. v. Adverse Weather Conditions; the project experienced heavy rainfall during the reporting period which affected the Contractor's productivity. vi. The low performance by sub-Contractors engaged under local content was affecting the overall progress by the main Contractors. vii. Contestation in ownership of the quarry for package 2, and whether it is a physical cultural resource was affecting the smooth implementation of works.

8 CONCLUSIONS i. Both Pre-financing and Land acquisition lie on the critical path for the implementation of oil roads activities and GoU should ensure that funds are always available to make timely payments to the Contractors and PAPs respectively to ensure project deliverables were not delayed and avoid any future claims associated with such delays in payments; Both procurement for works packages 4 and 6 have continued to delay. Package 4 was at contract award stage and Contract signing was expected in February 2020. Procurement of package 6 civil works contractor that was cancelled by PPDA was to be re-initiated by February 2020 due to re-scoping of the works and revising the project Cost that were ongoing at the time. Funds were released by July 2019 and both PAPs and the contractors were paid accordingly. However, by the end of December 2019, no funds had been released to pay the Contractors that continued to affect progress of planned works. iv. UNRA targeted to complete most of land compensation by December 2019. However, this was not possible due to lack of funds. Most activities have spilled over and we targetl to concluded by December 202A. The success of this projection depends entirely on the availability and timely release of funds by GoU;

V UNRA requires full support from all key stakeholders to successfully implement and

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conclude the oil roads projects as earlier planned; vi GoU should support the local providers financially especially on equipment to enable them perform to the lndustry Standards and match their foreign counterparts; vii. UNRA to continue monitoring the performance of the local contractors on a regular basis; viii. Quality, Costs, Environment and Social Safeguard and Safety remain UNRA's focus for successful delivery of the projects. tx. Stakeholder engagements at all levels remain UNRA's focus to deliver this critical project.

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SELECTED PICTURES

Package 1_Tarmac Package L_Paraa Bridge Jetty Package 1_Placing Bridge Beams

Package 2_Tarmac Package 2_Tarmac Work Package 2_Escarpment

Package 3_Quarry Site Package 3_Tarmac Work Package 3_Road bed preparation

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PARAA BRIDGE FOUNDATION WORKS IN PROGRESS

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