Parliament has backed a proposed Shs139 billion loan to finance the rehabilitation of the Jinja-Mbulambuti-Kamuli-Bukungu road and selected roads in Jinja City, but warned that unresolved compensation for people affected by the project could delay its implementation.
The committee on National Economy recommended approval of the loan, saying the 127km Jinja-Mbulambuti-Kamuli-Bukungu road is an important transport link between the Busoga region and areas around Lake Kyoga.
The committee, however, said the loan agreement should not be signed until the Ministry of Works and Transport completes the registration of all Project Affected Persons (PAPs) and addresses their compensation.
Presenting the committee’s position, Finance Minister Henry Musasizi said the road would strengthen transport links between Busoga and Teso and provide an alternative route between northern and southern Uganda.
“The road connects to several districts across the waters of Lake Kyoga and the terminal end of the road at Bukungu is a gateway to districts of Amolatar, Kaberamaido, Soroti, Nakasongola and Kayunga,” Musasizi said.
The project also includes 10km of roads within Jinja City, which the government says will improve movement of people and goods while supporting trade and industrial activity.
“Intervening in 10km of urban roads within Jinja City directly supports urban mobility, facilitates industrial transport within Uganda’s primary industrial city and boosts local trade,” Musasizi said.
The Committee on National Economy said it supported the loan because of the economic importance of the road, but raised concern over the status of land compensation.
The committee’s chairperson, Jane Pacuto, said the Ministry of Works and Transport conducted a valuation exercise in 2022 and estimated compensation for Project Affected Persons at Shs112.8 billion.
However, she said the valuation report had neither been updated nor submitted, creating uncertainty over the amount that government will eventually be required to pay.
“Consequently, the quoted values may vary once the updated valuation is completed. Given that the valuation reports are not yet complete, there is a risk of project delays arising from the fact that PAPs have not been conclusively engaged under the new policy,” Pacuto said.
The committee therefore called on the government to urgently determine, approve and disclose the final compensation amounts payable to the affected people before the loan agreement is signed.
Pacuto said resolving the compensation issue early would allow the financing to become effective and reduce the risk of delays once construction begins.
“The ministry of Finance should not source or commit to financing projects involving PAPs until resettlement impacts are fully assessed,” she said.
The concern was also raised in the minority report presented by Hassan Kirumira, the NUP MP for Katikamu County South, who opposed approval of the loan in its current form.
Kirumira said Parliament should first ensure that the compensation of affected landowners is settled before government commits itself to the loan.
“It is risky to proceed with the loan request; PAPs are raising concerns considering land value has appreciated. Without mutual agreements, the project will suffer high costs due to undisbursed loan,” Kirumira said.
He also questioned the decision to use commercial financing for part of the project, arguing that Uganda should seek more concessional loans because of the country’s growing debt burden.
“The loan is expensive; part of it is commercial with a short maturity period of six years. We are not sure that after that, government will not borrow another loan,” Kirumira said.
Other MPs supported the proposed project but called for changes to some aspects of the budget.
James Waluswaka, the NRM MP for Bunyole West County, supported the loan but asked the government to remove money allocated for road design, arguing that the Ministry of Works and Transport had already completed the design.
Moses Walyomu, the MP for Kagoma County, also supported the project, saying the Jinja-Mbulambuti-Kamuli-Bukungu road could help increase tourism in the Busoga region.
Walyomu said the road passes near important tourist attractions, including Busowoko and Itanda Falls, making improved access important for the tourism industry.
“The road is along tourism sites like Busowoko and Itanda Falls. This will help the tourism sector,” he said.
However, MPs have made it clear that compensation for people whose land and property will be affected must be resolved before the project moves forward, to avoid disputes and delays after construction starts.
