The Clerk to Parliament, Adolf Mwesige has called off plenary until week. He communicated the decision in his July 25th, 2022 notice to Members of Parliament.
According to the notice, parliament will resume the sittings on Tuesday 2nd August 2022 at 2:00 pm. “You will recall that at the 11th sitting of Parliament held on Thursday 21st July 2022, the Right Honorable Speaker adjourned the House to Tuesday 26th July at 2:00 pm. This is to inform you that the plenary sitting for tomorrow 26th July 2022 has been called off. Plenary Sittings will resume on Tuesday, 2nd August,” reads the notice.
The notice came shortly after the Clerk to Parliament released the Order Paper for Tuesday’s sitting with a motion for a resolution of parliament urging the government to provide a monthly payment to the village health teams (VHTs) as an incentive for their role in the healthcare delivery system in Uganda and several responses by Ministers to urgent questions raised by MPs.
The Order Paper was silent on the motion by the Leader of Opposition, Mathias Mpuuga, for which he issued notice to Speaker of Parliament, Anita Among, seeking to challenge the vote taken on Thursday last week approving the government purchase of preference shares worth Shillings 202 billion in Roko Construction Limited.
The motion seen by parliamentary journalists says that the decision by the Deputy Speaker, Thomas Tayebwa to put a vote on the government proposal contravened the rules of procedure. The Opposition demands among others, a report from the Minister of Finance as directed earlier by the Speaker, Among detailing action taken and measures put in place on whether to give a loan or grant to Roko.
Also demanded by the Opposition in the motion is for the House to vote on both the majority and minority reports of the committee of finance on the proposal and that the question be properly put on whether the House should approve or disapprove the proposal by the government.
The Opposition in its Caucus meeting on Friday last week resolved that if this petition and motion, which they sought to table before the House on Tuesday 26th fail, a five-member team of lawyers would take up the matter and pursue a court process. Some of the lawyers on the team are Mawokota South MP, Yusuf Nsibambi, Mukono North MP, Abdallah Kiwanuka, Mukono Woman MP, Hanifa Nabukeera, and Kyadondo East MP Nkunyingi Muwada.
A vote on the proposed government purchase of preference shares in Roko was made on Thursday amidst uproar in Parliament as a section of opposition MPs raised objections. Deputy Speaker of Parliament, Tayebwa had told MPs that Roko would cease operations if the government proposal for the purchase of 150,000 preference shares had not been approved.
As they objected to the procedures, Tayebwa announced that the Ayes had taken the day, thus approving the purchase of preference shares in Roko Construction Limited. The same approval had been delayed on Wednesday awaiting a report on actions and measures taken by the Finance Minister from concerns raised earlier by the Finance Committee, a minority report, and MPs.
In his report to Parliament, the Finance Committee Chairperson Kefa Kiwanuka recommended that Roko should be expeditiously audited, as a condition of signing the Share Subscription Agreement by the Auditor General to particularly look at and certify the material assets, debtors, creditors, governance, and management.
He also highlighted inadequate and insufficient due diligence by the government noting that the Uganda Development Corporation (UDC), which was requested in November 2019 to initiate the process of acquiring equity in Roko through the necessary valuation of the Company was not allocated funds to do so.
Shillings 800 million was needed for the job. Butambala County MP, Muhammad Muwanga Kivumbi recommended that approval of the share purchase is halted until due diligence is undertaken by independent, competent, and professional accounting firms.
Kivumbi also the Shadow Minister for Finance noted, in a minority report, that due to failure to undertake due diligence, the same Roko Construction Limited together with FINASI had in the recent past entered into an agreement with the government to construct a specialized hospital in Lubowa, a project which never took off.
The minority report further recommends that government should acquire 51 percent of the ordinary shares of Roko Construction Limited as a condition for the acquisition of preference shares. The proposal for the purchase of Roko shares was first tabled before parliament two weeks ago when the Minister of State for Finance, Musasizi indicated that Roko is facing severe liquidity challenges that have constrained its ability to execute contracted projects and adversely affected payments to its suppliers.
Roko currently has projects with signed contracts worth 1.064 trillion Shillings of which 696.6 billion Shillings are government projects. The company’s indebtedness, as of May 31, 2022, stood at 202.4 billion Shillings. It also has contingent liabilities from bank Guarantees for ongoing projects worth 130.9 billion Shillings while its indebtedness to financial Institutions totals 35.7 million Shillings and USD 20.7 billion and dues to local suppliers stand at 46.8 billion Shillings.
Roko’s liquidity situation arose primarily from delayed payments on major projects, failure to refinance expensive Shilling loans with cheaper external financing, the impact of the COVID-19 pandemic on the construction industry, escalation of financing costs, and weak Corporate Governance, and inadequate management.
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