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An artistic impression of the Busega-Mpigi highway. Courtesy photo
An artistic impression of the Busega-Mpigi highway. Courtesy photo

Government To Probe Busega-Mpigi Highway Contractor over Liquidity Crisis

The Construction of the 23.7km Busega-Mpigi Expressway is one of the most awaited and prestigious infrastructure development projects in Uganda, undertaken by the Uganda National Road Authority (UNRA) and funded by African Development Bank (AfDB).
posted onDecember 13, 2018
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By Max Patrick Ocaido

PARLIAMENT. Government has vowed to investigate reports that the contractor of the Shs500bn Busega-Mpigi Expressway, Cooperativa Muratori & Cementisti (CMC) di Ravenna/Advent is suffering a liquidity crisis.

While interacting with Parliament journalists under their umbrella Uganda Parliamentary Press Association (UPPA) at OPM boardroom on Thursday, Government Chief Whip, Ruth Nankabirwa Sentamu pledged to call Works Minister Monica Ntege Azuba to investigate if due diligence was done on the Contractor to access its liquidity.

The Construction of the 23.7km Busega-Mpigi Expressway is one of the most awaited and prestigious infrastructure development projects in Uganda, undertaken by the Uganda National Road Authority (UNRA) and funded by African Development Bank (AfDB).

Whereas CMC di Ravenna/Advent was given a green light to take the contract after the Inspector General of Government (IGG) raised a red flag on the procurement process, the Italian-based last week announced that the company is having “financial tensions” and subsequently rushed to court in Ravenna, Italy to apply for a preventive composition agreement with creditors procedure pursuant to article 161, subsection 6, of Italian Insolvency Law.

“Media has drawn my attention to this and I will talk to Monica [Azuba]. If due diligence was not done and if they have not gone deep into the procurement process, then the procurement can be stopped so that we save that money. If a company has run out of money then we can always change, this is not a matrimonial engagement or obligation that cannot be disengaged,” Government Chief Whip, Nankabirwa said.

This financial health of CMC di Ravenna could be catastrophic and could cause direct bearing on capabilities of the contractor to undertake and complete the subject project successfully.

“It will be a disastrous situation to award the subject Project to CMC in the present circumstances as the project will suffer very badly due to non-availability of necessary funds with CMC to manage the project. It will be prudent on part of the UNRA to consider another option at this juncture to avoid public inconvenience and unrest,” a whistleblower’s report says.

The public procurement in Uganda is in principle governed by the Public Procurement and Disposal of Public Assets Act, Act No. 1 of 2003. Section 70 of the Act states that any bidder who is either insolvent, in receivership, bankrupt or being wound up shall not qualify for bidding in any public procurement in Uganda and that the bidder shall not be subject to any legal proceedings for any circumstances stated herein before.

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