The Parliamentary Public Accounts Committee (PAC) on Central Government has raised red flags over grossly exaggerated costs of government-funded infrastructure projects, warning that taxpayers are losing billions to inflated contracts, weak supervision, and poor loan absorption.
Presenting the committee’s findings on the Auditor General’s report for FY 2023/2024, PAC Chairperson Muhammad Muwanga Kivumbi pointed to glaring cost inconsistencies across road projects of similar length and quality—some costing up to three times more than the average rate.
“These roads measure almost the same in length, yet the costs vary abnormally. Such discrepancies are unjustifiable and point to inflated contracts and loss of public funds,” said Muwanga Kivumbi during the plenary sitting chaired by Speaker Anita Among.
Shocking Cost Variations Exposed
Arua City: Rehabilitation of 1.37 km cost Shs13.4 billion, Fort Portal City: 2.68 km cost Shs21.4 billion and Mbarara City: 1 km cost only Shs4.9 billion.
According to the Ministry of Works and Transport, the average cost of upgrading a paved road is Shs3.1 billion per kilometre. By that standard, Arua’s 1.37km project cost over three times more than it should have.
“The Fort Portal project alone could have financed nearly seven kilometres of road at average cost, but only 2.6km was delivered,” Kivumbi, also MP for Butambala County, noted.
Supervision Costs Also Under Fire
PAC also flagged sky-high supervision costs—some reaching up to 20% of total project budgets. For example: Arua: Shs 3 billion spent supervising 1.37km road and Mubende: Shs 2.5 billion on 2.86km road
“This is an obnoxious trend,” the committee report stated, accusing contractors and government officials of colluding to inflate costs and exploit the system.
Billions in Loans, Poor Absorption
Even more concerning, the report revealed that government has failed to utilise more than half of the loans and grants it secured for development projects.
Out of Shs7.958 trillion in loans and Shs3.97 trillion in grants accessed during the year: Only 48.2% of loans were absorbed, Just 25.6% of grants were used.
In reviewing 17 major government loans, PAC found the average disbursement rate stood at only 36.7%. The Mbarara–Masaka Transmission Line, for instance, had a disbursement of 0.3%, despite the project’s deadline passing in June 2023.
Speaker Among Calls for Action
Speaker Anita Among expressed outrage over the findings, particularly the revelation that Uganda continues to pay interest on unused loans.
“We need to look at this seriously because we are paying for loans that we are not using. We will dedicate a full day for this item to be debated,” she said, tasking the Ministry of Finance to update Parliament on the status of borrowed and idle funds.
Minister for Defence and Veteran Affairs, Jacob Oboth, echoed the concern and urged Parliament to devise concrete policy proposals for better loan management and value-for-money assurance.
Development Projects at Risk
The report concludes that unless corruption, poor planning, and weak oversight are urgently addressed, Uganda risks plunging deeper into debt without meaningful development outcomes.
“These inflated costs have deprived Ugandans of better roads, schools, and hospitals. Borrowed money is wasted on enriching a few individuals,” the report warned.
