PAC Demands Accountability Over Shs286 Billion Excess Payment to Lubowa Hospital

The Public Accounts Committee (PAC) has asked the Accountant General, Lawrence Semakula, to provide documents showing how he paid an excess of Shs286 billion to Lubowa Specialized Hospital.

This request came after the Auditor General revealed that most of the certificates submitted for payment weren’t for the physical work completed but for consultation fees for engineers.

According to the Auditor General’s report from December 2023, milestone certificates submitted for payment were mainly based on reports for consultation fees, not for the actual work done.

A document from January 11, 2022, showed that only 23% of the completed work was certified by government engineers, potentially leading to an overpayment of approximately Shs286 billion.

The Treasury has already paid seven promissory notes totaling approximately Shs476.5 billion to the Lubowa project, with an additional note worth Shs88.971 billion scheduled for redemption by December 31, 2023. This brings the total paid to approximately Shs600.858 billion.

The Committee criticized the Ministry of Finance for issuing promissory notes based on reports from the contractor’s engineers without ensuring that physical work was completed. The agreement states that payment for construction works should only be made upon the completion of each milestone and the issuance of a milestone completion certificate by the owner’s engineer.

However, the person responsible for answering these queries, Ggoobi, was absent from the meeting.

The PAC therefore called on the Secretary to the Treasury, Ramathan Ggoobi, to explain the allocation of over $474 million for the construction of the Lubowa Specialised International Hospital.

Despite the funds disbursed, only 23% of the work has been completed to date.

In December 2018, the government signed a promissory note purchase agreement with various entities to fund the project. The completion was expected by December 9, 2022.

However, an addendum to the project works investment agreement was signed with the contractor, Finasi-ISHU, in December 2022 after the promissory note purchase agreement expired.