UNRA's Busega-Mpigi Road Project: A Contractual Conundrum

The construction of the Busega-Mpigi expressway has been mired in controversy, with a recent analysis revealing a series of decisions that bypassed standard procedures, potentially leading to a ballooning national debt. The project, initially conceived in 2015, has seen its costs escalate from an approved Shs 547 billion to a potential Shs 1.3 trillion.

Critical decisions, starting from the award of the contract in May 2018, have been flagged as flawed. The UNRA contracts committee approved an award based on an original design, even though the committee chair had previously authorized a design change without stakeholder notification.

Further complicating matters, the civil works contract was signed in June 2019, nearly two years after the expressway’s alignment had been altered. This change was not communicated to the contractor or other potential bidders, creating a situation where work commenced on a scope different from what was officially tendered.

Procedures for contract variations, essential for managing design changes, were also circumvented. Instead of following FIDIC and PPDA regulations requiring variation instructions and contract amendments, a directorate within UNRA directly communicated revised alignments to the contractor, effectively initiating work on a new scope without proper authorization or pricing.

An independent design check, recommended multiple times by UNRA’s own design department, was never conducted. This oversight occurred even as the project’s cost was being determined by the contractor, raising concerns about value for money. While the accounting officer did eventually approve a final design update, it carried a cost of Shs 680 billion, significantly higher than the original tendered price, and the contractor’s subsequent proposal for varied works reached Shs 1.3 trillion.

The project’s financial controller flagged that the contractor’s proposal exceeded the 25% increase threshold allowed by PPDA law, yet the decision was made to proceed at contract rates, a move described as a deferral rather than a solution.

Even the board of UNRA appeared to be unaware of the irregularities until January 2022, ordering an investigation that later found management accounts to be falsified. The project’s design policy was only formalized in September 2022, five years after the alignment switch.

Most recently, an audit by the African Development Bank (AfDB) in July 2024 revealed that the major contract modifications were never subjected to the lender’s prior review, constituting a breach of the loan agreement. UNRA management acknowledged that the contractor proceeded with work without formal approval, with the lender being informed last.

As of the audit, over four and a half years after the contractor began work on the new alignment, no variation order has been signed, no contract amendment executed, and no AfDB clearance obtained. The contractor has effectively built a road without a lawful instrument, and with UNRA having been abolished, the potential Shs 1.3 trillion liability now rests with the Ministry of Works.