The development of the Hoima Oil Refinery proximity area has come under scrutiny after Members of the Public Accounts Committee (Central Government) queried the Shs950 million expenditure by the Ministry of Lands, Housing and Urban Development.
Members of Parliament raised the matter in a meeting with ministry officials led by the Permanent Secretary, Dorcas Okalany .
The meeting was discussing the report of the Auditor General’s for the financial Year 2024/2025.
“The ministry awarded a multi-year contract worth Shs950 million without Parliament’s authority which is contrary to the requirement. This exposes government to accumulation of domestic arrears, in instances where there are no sufficient funds to finance such unplanned-for projects,” the Auditor General’s report stated in part.
MPs were concerned to learn that the Shs950 million represented only part of the total cost of the contract. When pressed to disclose the full value of the contract, ministry officials were unable to clearly state the entire contractual amount, raising additional questions about transparency and accountability.
The Hoima Oil Refinery proximity area master plan is intended to guide structured urban and physical development around the refinery. Despite its strategic importance, MPs insisted that strict adherence to financial and procurement procedures must be observed.
The committee was informed that as a result of such irregularities, the ministry is burdened with domestic arrears of over Shs401 billion adding that, such cases have pushed government into costly litigation, as suppliers sue over delayed payments.
The Deputy Chairperson of the committee, Hon. Gorreth Namugga criticised government for failure to clear domestic arrears.
“Government has no commitment to pay domestic arrears. Many ministries find themselves looking for money to pay for these arrears. The Ministry of Finance should henceforth, allocate significant funds to clear them,” Namugga said.
She proposed that accounting officers or individual officials whose actions result in court-awarded penalties should be surcharged arguing that such accountability measures will help curb negligence and unlawful expenditure.
Kalungu West MP, Hon. Joseph Ssewungu demanded for documentary evidence to prove that the ministry had sought and obtained the necessary authorisation before committing funds to the refinery master plan. “I have observed that most ministries, departments and agencies are flouting financial and procurement guidelines. You are using your own powers and it will soon be a challenge,” Ssewungu warned.
In other audit queries, Ssewungu pointed out that the ministry irregularly spent Shs2 billion out of total procurements worth Shs14 billion contrary to the Public Procurement and Disposal of Public Assets (PPDA) guidelines which require all procurements to be processed through the Electronic Government Procurement (EGP) system.
The Commissioner for Physical Planning, Emmanuel Kaganzi said that the refinery master plan had initially been scheduled for implementation in the 2023/2024 financial year but added that, delays by the contractor caused the project to spill into the next financial year.
“The project was planned, but the contractor failed to deliver within the same year.
We decided to push it to the next year and that is why the money appears as domestic arrears. We had to make the payment in the coming year,” Kaganzi said.