MPs probe breach in refinery project compensations

Members of Parliament sitting on the Public Accounts Committee are probing inconsistencies in the Ministry of Energy's payment of Project Affected Persons (PAPs) to pave way for construction of the oil refinery.

The committee today interfaced with officials from the Energy ministry led by the acting Permanent Secretary Robert Kasande and officials from the office of the Chief Government Valuer.

Auditor General John Muwanga reveals anomalies in the compensation process of the PAPs ranging from low compensations, over and under valuation as well as inappropriate rates. This is according to the value for money audit report on the compensation of Project Affected Persons under the refinery project for the year ended December 2017.

Uganda's Oil Refinery will be built on a 29-square-kilometre piece of land in Kabaale Township, Buseruka Sub-county, Hoima District, along the shores of Lake Albert. The project is expected to cost four billion US Dollars, approximately 14.5 trillion Shillings.

Looking at the formulation of rates, the audit indicates that the Chief Government Valuer's approved valuation methodology which highlighted the procedures that would be used for valuation of property permanent in nature was not followed.

"It was further noted that the methodology provided that customary land was to be assessed at approximately 90% of the market value of the registered land. However, the approved methodology was not followed during the valuation of customary land leading to over and undervaluation." reads part of the report.

Due to this irregularity, the Auditor General cites a total loss of 295.7 million Shillings to government from Nyamasoga and Nyahaira villages which was incurred while a total 16.1 million Shillings was incurred to PAPs at Kayeera, Katooke and Bukoona A.

The Auditor General says that the loss was occasioned by the circumstances at the energy ministry's planning which differed from what was found on ground and necessitated adjustments of the rates.

"Audit expected the consultant to write to the Chief Government Valuer explaining the circumstances and seek approval for the adjusted rates. However, there was no evidence that this had been done." reads the report.

The Auditor General blames the anomalies on the inadequate supervision of the consultant by the Chief Government Valuer since he did not provide auditors with any supervision reports in regard to application of the methodology.

The Value for Money audit further indicates the application of inappropriate rates during the payments which resulted in PAPs receiving low compensation value for their property.

It is revealed that some PAPs especially in Kyapaloni and Kitegwa contested the rates on grounds that they were out-dated and low and therefore they did not sign for their compensation worth 446.6 million Shillings.

Under the Land Act, Section 59(1), it is a requirement that for each district, the District Land Board (DLB) should compile and maintain a list of rates for compensation payable in respect of crops, buildings of non-permanent mature and any other thing prescribed by land and also review every year the list of rates of compensation. The Chief Government Valuer is in particular required to review and approve rates.

According to the Auditor General, although compensation of PAPs started in the financial year 2013/2014, the rates used for almost all PAPs were obsolete as they were for the financial year 2011/2012 and that even these had not been approved by the Chief Government Valuer.

Besides the use of out-dated rates to pay PAPs, the value for money audit further reveals that through the review of the valuation report and payment files, it was noted that the rates, despite being of the same yeat were not applied uniformly to the affected villages in Buseruka sub-county.

"A random sample indicated that 43.2% had their crops valued at rates different from the recommended rates by the district." further reads the audit report.

MPs sitting on PAC including Vice Chairperson Gerald Karuhanga, Masaka Municipality MP Mathias Mpuuga, Kalungu West MP Joseph Ssewungu and Adjumani Woman MP Jessica Ababiku among others to explain the anomalies.

Francis Elengot, the in charge of Land Acquisition in the ministry attempted to give explanations to but failed to satisfy the MPs.

Giving an explanation on why the approved methodology was not followed during the valuation of customary land leading to over and undervaluation, Elengot said that the 90% approximation of registered land was meant to act as a benchmark.

He said that the actual cost of land had to eventually be derived from the market survey based on comparative market transactions conducted during the RAP study and that this was the basis for compensation.

However, Julian Hakirii a Senior Government Valuer sounded clueless failing to give explanations to MPs in regard to inadequate supervision and other anomalies. The officials are expected to re-appear before PAC to give further

Adopted from Uganda Radio Network