Chinese Contractors Fixed UNRA Funds to Earn Billions in Interest Top story

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In short
The contractors admitted before the committee that they were fixing money advanced to their bank accounts while part of it would be invested in personal businesses as they awaited payment instructions from UNRA.

Chinese contractors have been fixing money advanced to them by Uganda National Roads Authority-UNRA, to earn interest, parliament committee on Commissions, Statutory Authorities and State Enterprises has learnt.

The contractors admitted before the committee that they were fixing money advanced to their bank accounts while part of it would be invested in personal businesses as they awaited payment instructions from UNRA.  

China Railway 18th Group, one of the companies, which received money to compensate persons affected by a road project, is reported to have fixed 11 billion on a monthly basis for nine months in Barclays Bank and earned a total of 1.1 billion Shillings in interest.

The company's bank statement presented to the committee indicates that at each time money was fixed, the company earned between 73 and 97 million Shillings in interest.

The revelation was made as the committee interfaced with officials from five Chinese construction companies who were summoned to explain an expenditure of 47.7 billion Shillings advanced by Uganda National Roads Authority (UNRA) to compensate persons affected by various road construction projects, across the country, two years ago.

The companies to which money was advanced include China Railway 18th Group (12.9billion), China Railway No.3 Group (12.9billion), Zhongmei Engineering (6.5billion), China Railway No.5 Group (8.4billion) and Chongqing International Construction Company (7billion).

They were contracted to undertake projects of Musita-Lumino-Busia, Kanoni-Sembabule-Villa, Olwiyo Gulu, Gulu-Acholibur and Acholibur-Musingo respectively.

But the Auditor General observed in his June 2015 audit report that the money could not be accounted for, citing the absence of a status report to verify the progress of compensation. Related documents presented to COSASE indicate that only 15 billion Shillings was paid out to persons affected by the road projects.

Today the committee chaired by Bugweri County MP Abdu Katuntu was shocked to hear from the contractors that money was being fixed and billions received in interest.

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It was also revealed that China Railway No.3, the other company used 5.3 billion out of the 12.9 billion Shillings advanced from UNRA for their own personal projects.

Another company Zhong mei Engineering group fixed 4.5billion Shillings for one week and earned an interest of 40 million Shillings. The same company used other 150 million Shillings for buying diesel.

Zhu Wei Dong an official from Zhong mei Engineering Group Ltd apologized to the committee saying it was a mistake.

"Am sure UNRA recognizes the problem you have. They receive the money, they not only use money for own purposes but also trade in it", said committee chairperson Abdu Katuntu.

Allen Kagina, the executive director UNRA explained that currently compensations are carried out by UNRA officials.
 
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The committee noted that the 47.7billion Shillings did not serve its intended purpose and gave UNRA a period of one week to carry out an audit on the funds. UNRA was also tasked to establish the accounts on which money was deposited, to ascertain the balances and whether the accounts have been operated in accordance with contractual obligations.

Committee chairperson Abdu Katuntu also tasked UNRA to establish whether the 15 billion Shillings the contractors claim to have paid to project affected persons was paid citing that these payments are not reflected on the bank statements availed to his committee.

 Katuntu also directed the Chinese contractors not to expend any money from the accounts any more.
 
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About the author

Olive Nakatudde
Olive Nakatudde is a URN journalist based in Kampala. Nakatudde has been a URN staff member since 2013.

Nakatudde started out in journalism in 2009 with Dembe FM radio in Kampala. In 2012, Nakatudde joined Voice of Africa as a political reporter. She has been a photographer since her journalism school days at Makerere University.

Nakatudde is interested in good governance and public policy, which she reports on intensively from the Uganda Parliament. She is a keen follower of cultural affairs in Buganda Kingdom and covers the kingdom's Lukiiko (parliament). Nakatudde also reports on education and health.