The Parliament of Uganda on Wednesday approved an additional payment of Shs298 billion to Enrica Pinetti for the construction of Lubowa International Specialized Hospital, bringing the total amount of funds sunk into the project so far to Shs774.469 billion.
The government was able to secure the additional Shs298 billion through a supplementary budget that was passed by Parliament, despite protests from the Opposition legislators, who wanted funding for the project stopped, demanding that a special audit must be conducted before more money is released for the same.
The request for the Shs298 billion had earlier been tabled by Henry Musasizi, Minister of State for Finance, while appearing before Parliament’s Budget Committee to defend the Shs4.255 trillion Supplementary Budget.
Why is there Controversy Over Hospital
It is important to note that ever since its inception in 2019, the Lubowa International Specialised Hospital has been marred in controversy.
Initially, the hospital had been budgeted to cost USD397 million (Shs 1.4 trillion) and was scheduled to open in June 2021.
However, for almost four years now, the hospital has never been completed, although the government keeps sinking billions of shillings into the project.
Last year, the Leader of Opposition in Parliament, Hon. Joel Ssenyonyi, attempted to tour the construction site with a group of legislators to assess the progress of construction works at the hospital, although he and the other MPs were blocked by armed men who denied them access to the facility.
Since then, the Lubowa International Specialised Hospital has sparked endless debates in Parliament, with some MPs like Ssemujju Nganda (Kira Municipality) calling for the blocking of any more money that government asks Parliament to pass for the project.
“I don’t need to remind the country where and when Uganda fell in love with Italian investor Pinetti. Mentioning her name is painful enough,” MP Semujju told Parliament.
“In light of these issues, there is a significant risk of financial loss for Ugandans if additional funding is allocated to the project. It is recommended that the project be halted until a special audit report and Parliament can deliberate on the findings,” added Semujju, who was presenting his Minority report on the Supplementary Budget.
What You Should Know About The Hospital
While doing his research about corruption in East Africa, Josselin Canevet, a UK procurement expert with Arden & GEM CSU, observed several discrepancies in the procurement for the Lubowa International Specialised Hospital and in his paper titled; ‘Lubowa hospital: A case study in corruption risk – and how Open Contracting could have helped’, here is what he observed;
The government issued a promissory note (a document promising to pay a certain amount to an entity/individual) for US$397 million, which was given to the Italian firm Finasi.
No procurement process was done for the construction of the hospital; it was awarded to Roko Construction (a local firm).
Another organisation, Power Guizhou Engineering Co. Ltd, later joined the project to conduct construction works, essentially kicking Roko out of the project, causing Roko to take Finasi, the Ugandan Government and Power Guizhou Engineering to court on the grounds of anomalies.
Eventually, a Finasi/Roko Special Purpose Vehicle was created, with Finasi owning 95% of the shares and Roko owning 5%.
The hospital was budgeted at USD 397 million, making it the most expensive hospital built in Uganda.
Canevet, however, observed that despite this, Members of Parliament remained unsure on the purpose of financing the hospital, yet other health facilities in Uganda needed upgrading.
Nonetheless, he notes that the project was endorsed by the Review Committee to see whether it was achieving value for money.
But Canevet pointed out that for comparison, a local hospital could be built in Uganda on similar terms at USD25 million.
Canevet’s deduction was, therefore, that the Lubowa hospital is costing approximately 16 times more than any other hospital not only in Uganda but also in other developed countries.
He rightly predicted that with the likely upcoming issues, the hospital would likely cost sustainably more.
His prediction has since come to pass after the government secured another Shs298 billion to sink into the project without clarifying to Parliament on the progress of its construction. It’s not clear whether this amount will be the last amount that the government is asking for to inject in the project.
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