Lubowa Hospital construction agreements did not violate law – Court
Finance minister Matia Kasaija (2nd left) exchanges documents with Ms Enrica Pinetti (right) after signing an agreement with the Finance ministry to establish a coffee processing plant in Uganda, on February 10, 2022. PHOTO/COURTESY
What you need to know:
- A panel of five justices held that the actions taken by the Ministers and Permanent Secretaries of the Ministry of Health (MoH) and Ministry of Finance (MoFDED) in entering into the contracts in question did not contravene the provisions of Article 38 of the Constitution.
The Constitutional Court has ruled that the agreements made for the construction and management of the International Specialised Hospital of Uganda at Lubowa were not in violation of any laws.
A panel of five justices held that the actions taken by the Ministers and Permanent Secretaries of the Ministry of Health (MoH) and Ministry of Finance (MoFDED) in entering into the contracts in question did not contravene the provisions of Article 38 of the Constitution.
“The government of Uganda (GoU) entered into contracts based on a policy that was adopted by the Cabinet. The Cabinet is made up of representatives of the people of Uganda and follows the democratic processes outlined in the Constitution,” the court ruled on Monday.
The panel of judges includes Irene Mulyagonja, Catherine Bamugemereire, Monica Mugenyi, Oscar John Kihika, and Fredrick Egonda-Ntende.
On whether the Ministry of Health (MoH) and the Ministry of Finance, Planning and Economic Development (MoFPED) had committed an offence by entering into three agreements that involved financing arrangements including promissory notes without seeking or obtaining a resolution of Parliament, the court ruled that the terms of the loan do not necessarily require approval from Parliament before executing the instrument under which the loan is obtained.
Justice Mulyagonja, who led the judgment, clarified that the terms of the loan must be laid before Parliament and approved before the loan can be enforced.
“Based on the PSA, it is evident that the government or MoH did not lend any money to the company for payment facilitation. Therefore, there was no need for parliamentary authorization for borrowing. The agreement was not in violation of Article 159 of the Constitution,” she ruled.
The court decision followed a petition in which the Civil Society body, Initiative for Social Economic Rights, challenged certain actions of the government of Uganda through the Ministries of Finance and Health, and the Parliament that they were inconsistent with certain provisions of the Constitution.
The petition mentioned that Parliament had sanctioned the issuance of promissory notes worth $379,710,000 million without following the procedures laid down in the Constitution. This amounted to contravention of the Constitution.
“The Project Services Agreement entered into on January 27, 2016, between the Ministries of Health and Finance on behalf of government and the Specialised Hospital of Uganda, to undertake the operations and facilities management thereof for a period of 8 years from the date of completion of construction was also inconsistent with Articles 2 (7), 159 (2), (5), and (6) of the Constitution,” the organization argued.
The petitioner alleged that the acts of the government of entering into three agreements without consultation of the people of Uganda contravened Article 38 of the Constitution.
The agreements embodied terms that the government would issue promissory notes to Finasi/Roko Construction SPV Ltd without first obtaining the approval of Parliament, which contravened Article 159 (2), (5), and (6) of the Constitution.
However, Justice Mulyagonja held that the provisions in Article 159 (2)', (5), and (6) of the Constitution were satisfied by sections 23 and 36 of the PFMA. The Direct Agreement was laid before Parliament, which scrutinised it through the Committee on National Economy, and the requisite Resolution was passed by Parliament.
