Kampala |The national oil seeds project (NOSP), which began on July 12, 2021, will continue until July 11, 2028, encompassing 81 districts across the country.
The Ministry of Agriculture, Animal Industry, and Fisheries (MAAIF) and the Ministry of Local Government are jointly implementing the project.
Designed to build on the success of the predecessor project, the Vegetable Oil Development Project (VODP) phase 2, the $160.8 million project, whose funding comes from the International Fund for Agriculture (IFAD), OPEC Fund for International Development (OFID), Heifer International, Kuehne Foundation, the Government of Uganda, and partners, recently came under fire after Kole North Member of Parliament Dr. Samuel Opio Acuti raised an issue about inflated road costs.
In a letter to Local Government Minister Rapheal Magezi dated July 25, 2024, MP Acuti requested clarification on the costs and proposed a downward revision to allow for the construction of more kilometres of Community Access Roads (CARs) in each of the 81 beneficiary districts.
In his same letter, the MP said the engineers’ estimated cost for NOSP’s CARs to be constructed or rehabilitated averages shs90.5m per kilometre – citing a New Vision advert of May 30, 2024. The advertisement was inviting bidders.
He also stated that the indicative costs for the Ministry of Works and Transport (MoWT) budget framework paper for the fiscal year 2021/23 are shs30m per kilometre, with budget estimates for several District Local Governments at shs15m per kilometre.
Thus, the Kole North MP raised concerns that the National Oilseed Project Engineers’ estimates were three and six times more expensive than the Ministry of Works and Transport’s indicative costs and the district Local Government’s budget estimates, respectively.
NOSP, according to an official project document obtained by tndNews, covers six hubs and 81 districts: 23 in Eastern, 8 in Acholi, 19 in mid-north, 9 in mid-western, 10 in West Nile, and 6 in Karamoja. It aims to achieve inclusive rural transformation through sustainable development of the oilseed sector, with 120,000 farmers as its target.
In order to meet local demand, the project also plans to decrease the import of 90,000 metric tonnes of vegetable oil, which is valued at $70 million annually.
The project’s two “programmatic components,” support for the development of the oilseed value chain and support for the market linkage infrastructure that benefits the oilseed industry, are important to note.
Ministry clarifies on ‘inflated costs’
In a letter to MP Samuel Opio Acuti dated July 30, 2024, Sendaula Yasin, Project Coordinator of NOSP, clarifies on behalf of the Permanent Secretary of the Ministry of Local Government that the unit cost of road construction is determined by environmental, terrain, scope, specification, design, current market prices of materials, and price comparison with similar projects.
The Ministry also clarified that the specifications and scope intend to construct, rehabilitate, and develop 2,500 kilometres of Community Access Roads (lowest class) to district feeder roads (standard class III) in accordance with the Ministry of Works’ specifications.
Also read: Alebtong, Nwoya are beneficiaries of US$43m LEGS program
“The indicative costs for Ministry of Works and Transport and Budget Estimates for district Local Governments are for routine maintenance of CARs which entails opening, shaping, bush clearing, and spot improvements using government road equipment and personnel (force account) on the already existing CARs,” the letter continues to read in part.
“Therefore, the cost referred to in MoWT and DLGs are for routine maintenance of CARs under recurrent budgets while the cost referred to by NOSP is for construction, rehabilitation of CARs under the development budget. The roads to be constructed under NOSP are either new roads, (Greenfields) or those that have not been maintained for decades.
During a parliamentary sitting on August 1, Prime Minister Robinah Nabbanja addressed MP Acuti’s concerns about inflated costs. She would later direct the Ministry of Local Government to halt the procurement process until all costs were harmonised. However, in the same letter to which she was copied, the Ministry clarified that the main focus of NOSP CARs is bush clearing, opening, and stabilisation, as well as full gravel, drainage structure, bridges, and box culverts.
In a letter to MP Acuti, the Prime Minister and the Executive Director of the PDDA were informed that these costs are determined by purpose: “maintenance vs construction and the attendant specifications, scope related to the terrain.”
According to the letter, the roads chosen and prioritised under NOSP are difficult ones that necessitate extensive drainage structures to improve connectivity to oilseed potential growing areas, main roads, markets to urban areas, and difficult-to-access areas.
These roads “traverse through hilly areas, valleys, and swamps purposefully to link farmers to markets,” whereas those referred to by the Ministry of Works and district Local Governments “are existing ones that require routine maintenance.”
During the preparation of the standard bidding documents for NOSP CARs, the Ministry of Local Government stated that its staff, the Ministry of Works and Transport, and district Local Government all participated actively, conducting costing after price market surveys on projects of similar nature, scope, and specifications.
The Ministry further clarifies and defends that their costs are fair, reasonable, and shs10 million less than those of the Ministry of Works. “… it was established that in April and August 2023, MoWT was cleared by the Solicitor General to award 112 contracts for 979 kilometres at a cost of shs99,072,826,624, with an average unit cost of shs101,223,936. The NOSP unit cost of shs90.5m for the construction of NOSP CARs is below and within acceptable levels to that of MoWT’s latest approvals.”
Prices go up
The primary cost drivers in road construction are fuel, cement, iron bars, machine, and labour costs. All of these have increased over time, as stated in the clarification letter.
According to the Ministry of Local Government, the MP’s referenced budget framework paper for the Ministry of Works and Transport was developed in 2020. Since then, prices for major cost drivers have risen by more than 25%, it says.
For example, fuel cost shs3,700 per litre in 2020 but is now shs5,200 four years later. Four years ago, a 50kg bag of cement cost shs28,000. Today, it costs shs35,000. A 20mm iron bar, which cost shs107,000 in 2020, now costs shs125,000, a 17% increase. Dry earth moving equipment used to cost shs1,480,000 per day, but four years later it increased to shs1,750,000 per day.
Furthermore, the Ministry believes that the unit price mentioned in the NOSP is “an estimate,” and that “the actual unit will be determined through a competitive bidding process and may come down.”
According to the Ministry’s accounting officer (PS), the procurement entities for these roads benefit from 81 districts designated as road agencies under the Roads Act. “The Ministry of Local Government coordinates the district Local Governments in the implementation of the project as provided for in the Local Governments Act and the Financing Agreement,” his letter further reads.
Comparison of contracts cleared by the Attorney General
On April 20, 2023, the Attorney General’s chambers requested that the Permanent Secretary of the Ministry of Works and Transport approve 112 draft contracts under the Ministry for the rehabilitation of critical community access roads in Adjumani, Amuria, Apac, Arua, Budaka, and 70 others. These contracts totalled shs99 billion for 979 kilometres.
For example, M/s Electec-soil Technologies Ltd was approved to rehabilitate Kulukulu-Ayiri-Central Road (11km) in Adjumani district under Lot 001 for a contract price of shs929,781,472. This price includes the value added tax. Each kilometre cost shs84,525,588.
M/s Wim Services Ltd was approved to rehabilitate Bunabude-Gombe-Gabusola-Rushu Junction Road (3.7km) and Mabuga-Masaka-Mamoro-Zema-Zeseleni Road (7.7km) in Bulambuli district under lot 013 for a total contract price of shs1,483,107,186, including VAT. Each kilometre cost shs130,097.122.
For the fiscal year 2021/22, the Attorney General also approved 50 contracts for PRELNOR under the Ministry of Local Government for 606 kilometres of roads worth shs54.3 billion. Adigesi-Pawinyo Road (11 km) rehabilitation was approved for Roone Engineering Co. Ltd at a cost of Shs391.2 million. Each kilometre was at shs35.5m.
Ten contracts were approved under the Local Economic and Growth Support (LEGS) project for 129.6 kilometres of roads worth shs9.1 billion. M/s Kats Civil and Water Works was awarded a shs846.5 million contract for a 10.8-kilometer road in Alebtong district, with shs78.3 million per kilometre.
Taking many factors into account, the Ministry of Local Government argued that their unit cost of shs90.5 million for NOSP CARs remains “below and within acceptable levels to that of the MoWT’s latest approvals averaging shs101.2 million.”
On Tuesday, August 13, MP Dr Samuel Opio Acuti said he had yet to receive the clarification letter but promised to “respond.”
Discover more from tndNews
Subscribe to get the latest posts sent to your email.