GRILLED!MPs quiz finance ministry for inflating Lubowa hospital funds

A section of lawmakers on the Parliament’s Finance Committee have accused the officials from Ministry of Finance for inflating the price of controversial International Specialised Hospital Lubowa by over Shs100Bn, an amount that is higher than what was initially approved.

This followed a concern raised on Monday by Jennifer Muhuruzi, Acting Director Treasury Services and Asset Management at Ministry of Finance, who urged Parliament to ensure that Shs227.56Bn is availed in the 2023/2024 national budget for the redemption of the promissory notes that were approved by Parliament in March 2020 to Enrica Pinetti, the proprietor of Lubowa hospital, so as to ensure that government meets its obligation on time.

She said: “Government issued and paid off 7 Promissory Notes amounting to US$133.5M. The unissued Promissory notes were cancelled and an amendment to the Project Works Agreement was entered into with the contractor. Under the amendment, new promissory notes were issued and 5 of these are scheduled to mature in 2023/2024.”

While scrutinising the documents before Parliament’s Finance Committee from Treasury Operations, a body charged with management of Uganda’s debt, Karim Masaba (Mbale Industrial Division) tasked the Ministry of Finance to explain the discrepancies in the amount to be paid in promissory notes, revealing that since the approval of the contract between Pinetti and Government, there have been two amendments made to the initial agreements, yet no approval of Parliament was sought.

Masaba remarked: “You are reducing the scope of work that Finaci Construction is supposed to do and you are increasing the money that is actually supposed to be paid to them. So do you think that is fair to this nation? Because the initial; agreement at the start was US$345M (Shs1.301Trn), later it switched to US$366M (Shs1.380Trn), and according to this agreement, still you are increasing this money to US$379.7M (Shs1.431Trn), but again you are saying you are reducing the scope of work but again you have said they are reducing the scope of work.”

Following this revelation, Paul Omara (Otuke County) called for another scrutiny into the original documents and the current agreements that Government has entered into with Pinetti and called for the cancellation of the contract if it is discovered that the proprietor didn’t honour her part of the deal.

He said: “I think it will be necessary to look at Lubowa afresh, we look at the original documents of the agreement that was signed, then we look at the milestones achieved as per the agreement, and the funding methodology. Now if the Pinetti didn’t deliver is the cancellation of the contract but we have carried on with the contract that hasn’t been executed according to plan and continue pouring in public money. This hospital should have been built a long time ago, but Pinetti hasn’t executed on the project.”

However, Henry Musasizi, Minister of State for Finance (General Duties) asked the Committee to schedule another meeting to discuss the issue of Lubowa because he hadn’t come with the technical team at the Ministry of Finance that is overseeing the project.

Minister Musasizi said, “In today’s meeting, we prepared to defend vote 130, however I want us to discuss Lubowa when we were prepared for it and when we have Ministry of Health and all other stakeholders, even the staff who have walked through these Lubowa agreements and they aren’t here with us. Allow us to defend this policy statement and if you want Lubowa, we can come back and deal with Lubowa.”

In March 2019, Parliament approved the request by the Ministry of Finance to issue promissory notes for the construction of a specialised hospital in Lubowa through the issuance of a promissory notes to a tune of USD379.71m approximately Shs1.433Trn and the facility was meant be constructed on 32 hectares in Lubowa in Wakiso district and would be divided in four zones including; clinical, education, recreation and housing zones.

The hospital was meant to carry 54 Oncology beds, 27 infectious disease beds, 27 medical beds, 16VIP beds, eight ICU beds, as well as 60 outpatient beds, 54 surgery beds, 27 pediatrics beds, 27OBGYN beds, 16 intensive Care, 8 neonatal ICU beds and 11 operating theatres.

The proprietors had promised to construct the hospital in two years, and later run the hospital for six years before the hospital reverts back to Government, but three years down the road, the project has been bogged with scandals despite the Ministry of Finance gifting Enrica Pinetti the developer with Shs348Bn between 2021 and 2022 and Government requested for additional Shs319Bn in the 2022/2023 current national budget, a request that Parliament rejected.

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