Namanve industrial park road works remain at 51%

A report by the Ministry of Finance has indicated that works on critical infrastructure that seeks to connect all estates in the Kampala Business and Industrial Park, also known as the Namanve Industrial Park, remain far behind schedule less than a year to the planned completion date.

Government, through Uganda Investment Authority, in 2018 signed an infrastructure development contract for the Kampala Business and Industrial Park with Lagan in a joint venture with Dott Services.

The contract, which commenced on July 16, 2020, with an initial expected completion date of January 5, 2024, had sought to provide critical infrastructure connecting all four estates in the park including North Estate, South A Estate, South B Estate, and South C Estate.

The project is financed through a €219m (Shs870.7b) loan from the UK Export Finance and Standard Chartered Bank UK, with counterpart funding of about €4.87m (Shs19.3b) from government of Uganda.

The initial completion date was, however, extended by 20 months to September 4, 2025, after losing 13 months due to delayed acquisition of sites for wastewater and solid waste treatment plants and the SME Park, which the Ministry of Finance noted pointed to lack of project readiness by UIA.

In details contained in the Performance of Externally Funded Projects report, the Ministry of Finance, which reviewed 82 projects benefiting from external loans, noted that by March 31, 2024, the cumulative physical progress of the project was 51.7 percent against the planned progress of 72 percent, which was poor and presented cost and time overruns arising from idle time and delayed payment of the contractor.

“The overall project performance is poor against the target with all planned outputs behind schedule and several outputs yet to commence. This points to a lack of project readiness by the client [UIA). The … project shall be completed above budget … and is behind schedule,” the report reads in part, noting that the delay to commence pending works would result in more time and cost overruns.

The Kampala Business and Industrial Park land was allocated to 322 investors for development in various subsectors including agro-processing, mineral processing, ICT, logistics and freight, warehousing, general manufacturing, tourism promotion, and accommodation. The project has suffered several years of failed project completion, more than 25 years since it was created by an Act of Parliament in 1997. 

However, progress regarding the development of the land allocated to investors has been slow due to insufficient infrastructure such as roads, drainage channels, electricity lines, and corresponding utility facilities.

The report also noted that by March 31, 2024, the overall contract financial performance was just 47.6 percent or an equivalent of €114.1m (Shs453.9b) against the planned progress of 100 percent of the original contract time (or 72.6 percent of the revised time), adding that the review had also observed that the contractor had submitted claims on delayed payments, thus resulting into cost overruns, while on the other hand, the original Owner’s Engineer had been paid €1.8m (Shs7.5b), representing 21.54 percent of the contract, before UIA terminated the contract due to poor performance.

The report further noted that the road network and bridge construction had been planned at 69.1 percent by March 2024 but was at just 44 percent, while water supply network construction was at 16 percent.

The Ministry of Finance also noted that the review had found that there was rampant encroachment on parkland and green spaces by some tenants and issuance of illegal titles on the industrial park land by the Mukono District local government, especially in the South C8 section, recommending that issuance of such titles should stop with individual officers involved in the illegal titling prosecuted.

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