MPs quiz Masaka hospital boss over Shs 2.5bln inflated contract
KAMPALA-Legislators on Parliament’s Committee on Public Accounts-Central Government have tasked the former director of Masaka Regional Referral Hospital, Dr Nathan Onyachi to explain why he spent an extra Shs Shs2.5 billion not included in a contract to build the maternity and children’s ward complex.
Dr Onyachi told Parliament’s Public Accounts Committee [Central] that he approved a 24 percent contract price increment for a hospital complex, without prior clearance from the Attorney General.
The MPs were not happy with Onyachi for his failure to follow requisite Public Procurement and Disposal of Assets [PPDA] regulations while handling a government project.
Dr Onyachi while appearing before the MPs Thursday attributed the increment in the total contract price to changes in the costs of materials used in the project.
He was answering audit queries raised by the Auditor General.
The procurement issue was raised by the Auditor General in his review of budget releases to Masaka Regional Referral Hospital for the financial year 2020/2021.
The contract signed with Tirupati Development [U] Limited on May 30, 2014 to execute the project, was costed Shs10.6bln but would later be revised to Shs 13.1bln.
The Auditor General observed that although the contractor recommended an increment of Shs 2.5 billion, no independent technical audit of the project was done by the Ministry of Health engineers to ascertain the cost of the remaining civil works and the condition of the contract.
“Regulation 55 6[c] of the PPDA [Contracts] Regulations 2014 states that a contract amendment shall not be issued to a provider without obtaining approval from other concerned bodies including the Attorney General. “I noted that the Director communicated price increment to the contractor without the approval of the Attorney General. In the absence of adequate documentation and required approvals makes it difficult to confirm the authenticity of the price increments.”
Onyachi said the slow disbursement of funds from government forced the parties to extent the contract which initially was to run for three years.
He said the rising prices in 2018 forced the contractor to ask for a price increment variation at Shs 3.3bln with evidence from Uganda Bureau of Statistics [UBOS], which was handed over to the supervising engineer to verify the claims of the contractor.
“The information was shared with the Ministry of Health Infrastructure Division and eventually an approval of a price increment variation of Shs 2.5bln was made,” Onyachi said.
While chairing the meeting, Sarah Opendi [NRM, Tororo] tasked the Dr Onyachi to justify his approval of the Shs 2.5bln contract variation price without input from the Attorney General, Solicitor General and PPDA.
The hospital’s procurement officer, IDismus Wandera, in response told the Committee that during the course of the project, some items kept changing like the functionality of the rooms and putting some material that was not initially in the design.
He added that the project is at 96 per cent works, however, they are “grappling with extra works requiring an additional Shs 1.7bln”.
Onyachi told the Committee that the hospital management has submitted two variation claims to the Solicitor General for clearance, where one has been approved whereas the other remains pending.
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