MPs Question Shs950 Million Refinery Area Contract as Audit Flags Irregularities
By Joseph Kiggundu
Parliament’s Public Accounts Committee (Central Government) has put the Ministry of Lands, Housing and Urban Development on the spot over a Shs950 million contract linked to planning activities around the Hoima Oil Refinery.
The concerns arose during a meeting held on Tuesday, 03 March 2026, where ministry officials led by Permanent Secretary Dorcas Okalany appeared before the committee to respond to findings in the Auditor General’s report for the 2024/2025 financial year.
According to the audit findings, the ministry entered into a multi-year contract valued at Shs950 million without prior approval from Parliament, contrary to established financial management requirements. The report warned that such commitments risk creating domestic arrears when funds are not fully provided for in the approved budget.
Legislators were further troubled to learn that the Shs950 million represented only a portion of the total contract value. When asked to disclose the full contractual sum, ministry officials were unable to provide a clear figure, prompting concerns about transparency and fiscal accountability.
The master plan for the Hoima Oil Refinery proximity area is designed to guide organized physical and urban development around the refinery project. While acknowledging its strategic importance, committee members stressed that all procurement and expenditure processes must strictly comply with public finance laws.
The committee was also informed that the ministry currently carries domestic arrears amounting to more than Shs401 billion. Legislators noted that delayed payments have, in several cases, resulted in suppliers seeking redress through the courts, increasing government expenditure through penalties and legal costs.
Deputy Chairperson of the committee, Hon. Gorreth Namugga, criticized what she described as government’s limited commitment to clearing domestic arrears. She urged the Ministry of Finance to prioritize funding for arrears settlement and proposed that accounting officers responsible for actions leading to court-awarded fines should be personally surcharged.
Kalungu West MP, Hon. Joseph Ssewungu, demanded proof that the ministry had obtained the necessary approvals before committing public funds to the refinery master plan. He warned that continued disregard for financial and procurement regulations by ministries and agencies could undermine public sector accountability.
Ssewungu also cited additional audit concerns, noting that the ministry reportedly spent Shs2 billion outside the Electronic Government Procurement (EGP) system, contrary to Public Procurement and Disposal of Public Assets (PPDA) guidelines, out of total procurements worth Shs14 billion.
In response, Commissioner for Physical Planning Emmanuel Kaganzi explained that the refinery master plan had originally been scheduled for implementation in the 2023/2024 financial year. However, delays by the contractor pushed completion into the subsequent financial year, leading to payment obligations being reflected as domestic arrears.
The committee indicated that it would continue scrutinizing the matter to ensure compliance with public finance and procurement laws.