Legislators on the Public Accounts Committee (PAC) are urging a halt to the construction of the Lubowa Super Specialised Hospital, citing concerns over inadequate accountability.
The committee members are also calling for legal action against the project engineer, accusing him of issuing misleading completion certificates, which have triggered government payments through promissory notes.
PAC Chairperson Muhammad Muwanga Kivumbi, who is also the MP for Butambala County, made these recommendations in the committee’s report based on the Auditor General’s findings for the financial year 2022/23.
The Lubowa hospital project, which was contracted to Italian company Finasi-ISHU Construction SPV SMC Limited in 2015, is aimed at providing world-class healthcare services.
Parliament approved the $379.71 million project in 2019, with the government agreeing to finance it through a Promissory Note Purchase Agreement involving the Ministry of Health, Africa Export-Import Bank, Trade & Development Bank, and Barclays Bank Limited, among others.
Under the terms of the agreement, milestone completion certificates must be issued by the project engineer and validated by the Ministry of Health before the Ministry of Finance releases payments. However, PAC has raised concerns that these certificates have been issued without proper verification of work on the ground.
The committee highlighted that the government has already redeemed promissory notes worth $133.6 million, which accounts for 35.2% of the total project cost.
Despite this, the owner’s engineer has certified only 23% of the project’s completion, valued at $57.477 million. PAC suspects that an overpayment of $76.088 million (Shs 286 billion) has been made without sufficient proof of work.
Additionally, MPs expressed concerns about the lack of transparency surrounding the project. They pointed out that while they were provided copies of promissory notes, they were denied access to milestone completion certificates. Moreover, repeated attempts by the committee to inspect the construction site were blocked by the developer, raising suspicions that minimal work may have been completed.
“This project risks turning into a ghost enterprise, with the potential for significant financial losses to the country,” the report warned.
The Lubowa project has been a subject of heated debate, with President Yoweri Museveni defending its necessity to reduce the cost of sending government officials abroad for specialised medical treatment.
However, opposition MPs have raised doubts about the project, especially regarding the qualifications of Finasi’s owner, Enrica Pinetti, to undertake such a large-scale healthcare initiative.