The minister of Health Jane Ruth Aceng has written to President Yoweri Kaguta Museveni seeking his intervention in the controversies surrounding the construction of Lubowa hospital.
Parliament early this year, approved a loan guarantee of Shs 1.4 trillion (about $378m) to Finasi/Roko Construction Ltd, a special purpose vehicle (SPV) for the construction of the International Specialised Hospital of Uganda (ISHU) in Lubowa, Wakiso district.
However the project has since faced setbacks with the SPV Finasi/Roko falling apart following the introduction of another player a Chinese firm, Power China Guizhou Engineering co. Ltd as the civil works contractor, but also allegations that up to $86 million meant for the project is already missing.
Now, Aceng in her letter to the president dated July 2, noted that it is clear there is a standoff between the ministry of Health and the SPV over the construction of the hospital and that the matter is getting out of hand. She called on the president to intervene on the matter as the continued battle would upset the project. In the letter URN has seen, Aceng says they have met challenges in executing the project and seek the president’s wise counsel.
“Whereas the ministry of Health discharged its contractual-obligations and handed over the site to the SPV, there arose a legal dispute between the shareholders in the SPV (Roko Construction and Finasi) which is now subject of court proceedings,” the letter reads.
Roko construction Ltd says it has been treated in “an oppressive manner” by Finasi when the latter evicted it from the construction site in favour of a Chinese contractor, Power China Guizhou Engineering. Aceng says they are currently stuck with the hospital project as they are experiencing issues of lack of transparency on the side of Finasi/Roko.
“I am humbly requesting that you summon us the concerned parties for a meeting to help streamline the execution of the ISHU project and to avoid any further stagnation of the project. Your Excellency, any delays in executing this project will lead to insurmountable costs to government. It is important that the roles of various stakeholders are clarified and harmonized moving forward.” Aceng’s letter reads.
Aceng who was today appearing before the Parliamentary Committee on National Economy alongside the ministry of Health permanent secretary Dr Diana Atwine, says there is a big problem with the people constructing the hospital.
“This took place on the 10th of June 2019. During the handover, Hon chair and members, ministry of Health noted the dispute during that activity between the shareholders to the special purpose vehicle that is Roko and Finasi which today remains unresolved despite a meeting that was held with the PSST [permanent secretary and secretary to treasury], ministry of Finance to reach an amicable settlement.” said Aceng.
Although Atwine wrote to the attorney general, seeking legal opinion on how they should proceed and the legal implications and capacity of the new subcontractor, the deputy attorney general Mwesigwa Rukutana advised that the subcontractor be allowed to work.
“You are advised that subcontracting is allowed by the Project Works Investment Agreement (PWIA) as long as SPV demonstrates that the proposed sub-contractor Power China Guizhou Engineering Ltd has the required technical and financial expertise to execute the proposed.” part of Rukutana’s legal advise reads.
Atwine, said she has tasked Finasi, to show that Roko construction company has consented to bringing Power China on board and also to prove it’s financial capacity. She told the committee she’s being threatened by Finasi for delaying to approve the Chinese company.
“This morning I received another letter from the developer, Finasi, accusing me how they are going to penalise me personally because I have delayed to approve the Chinese. I wrote to them and told them; you must give me the due diligence report to show that they had a resolution and registered by the registrar of companies, and also prove that this person has ever done a hospital of this magnitude and also give me the scope of these works.” said Atwine.
The committee chairperson Lawrence Bategeka said they will have an internal meeting with ministry of Finance, invite Roko/Finasi and Ministry of health to resolve these matters.