UNRA: End of Financial Year 2015/2016 brief

BACKGROUND

The Uganda National Roads Authority, an organization established by an Act of Parliament, started its operations in July 2008. This means that it will be celebrating its 8th birthday on 1st July. The organization was established to implement Government’s policy of commercialization and privatization of core functions that can be transferred from central government to specialized service providers. By doing so, it would introduce market discipline, efficiency and effectiveness to functions that had hitherto suffered from the lack of a proper incentive structure and a low level of accountability and productivity.

UNRA

During this time, the Authority was able to develop, maintain and manage the national road network which currently stands at 20,544km, as the Act requires. However, the more recent reports by the Office of the Auditor General (OAG), IGG and more recently the Commission of Enquiryhad revealed systemic failures, inadequate governance andlack of staff capacity within the organisation. As a result, public and stakeholder perception of the organisation’s business appears to have been at the lowest in 2014.

 

In May 2015, I was appointed the Executive Director of UNRA by the Hon. Minister of Works and Transport and I was tasked with improving its performance by turning it into an efficient organisation that provides a service that is responsive to the needs of the public. Informed by the prior reviews and a diagnosis of the organisation’s business operations, I immediately embarked on designing and implementing fundamental changes of how business is to be conducted in order to help cope with the expectations of the public and the business environment. With the support of the Governing Board of Directors (BoD) of UNRA, I have been able to implement changes which are part of the long term transformation plan.

The long term transformation plan which comprises key priority policies and programmes will seek to radically improve the performance of the organisation by changing behaviour, improving capacity and realigning the long term strategies for delivering a service which is more effective.

Most notably, this transformation necessitated the immediate restructuring of the organisation to ensure that sufficient and appropriate resources, especially human are provided for and that the necessary safeguards and governance structures are put in place.

 

I therefore wish to provide the key highlights of the performance of the organisation in the year 2015/16, and provide an insight for the year 2016/17.

THE RESTRUCTURING OF UNRA

In September 2015, the UNRA BoD approved a new structure which would help to increase and realign the resources and business operationsto the expected outputs – both in quality and quantityas well as introduce sustainable good governance.  The new structure almost doubled the required staff number to 1,740. The macro structure comprises the BoD, Executive Director and 9 Directorates.

 

Since the then structure had been dissolved, all existing staff were therefore given notice of termination on 30th September 2015, reason being the organisational restructuring, and all their severance and terminal benefits paid, in accordance with the Human Resource Manual and the laws.A recruitment exercise to fill all positions started with assessing all existing staff and retaining those who were competent, hardworking and with unquestionable integrity. This rigorous internal recruitment, together with a headhunting exercise for those with exceptional skills in the market was successful in retaining the good staff and bringing on board those with known proven performance.

 

Following external advertisement of 111 positions in January 2016, we received 45,000 applications which were sorted according to the job positions.

 

As a result of both the internal and external recruitment, all Senior Management positions have been filled with substantial recruitment of the Middle Management staff. We now have a total of 892 members of staff recruited as of today, with 30% of these expected to start working in July/August 2016.We hope to recruit an additional 400 members of staff in the FY 2016/17 and to fill the remaining positions in 2018.

 

 

EXECUTIVE DUTIES

This year, my office has prioritised mainly supporting the new Management in ensuring that the transition period is carried out successfully and that the new leaders in the organisation (Directors, Heads & Managers) are prepared well to take up their new roles through a well-structured induction and leadership training programme.

We have now commenced the process of envisioning and drawing strategies which will help us deliver the organisation’s mandate. We have increased our engagements and consultations with the stakeholders, particularly Government and the Development Partners to share our plans and to re-instil confidence and reassurance that the changes being made are long term and are intended to make UNRA a more efficient organisation.  In addition to promoting transparency, we are making a deliberate effort to have more effective communication with the publicthrough different media channels and interactions like this one.

We have put in place systems and processes which will help us deliver the services more efficiently but with integrity at the forefront of our method of working. An Investigation and Compliance Department was established to promote ethics and integrity and has been very useful in guiding staff and our stakeholders in how to conduct themselves while transacting UNRA business.

 

PERFORMANCE OF UNRA IN THE YEAR 2015/16

The performance in terms of outputs has been medium and is not the desirable standard measure. This is because of the restructuring exercise which has taken almost all year and resulted in losing a significant number of staff and recruiting new ones. This means that for half of the year we have been serving with only about 1/3 of the required staff numbers. We hope that performance will increase in the next year as more staff are brought on board and better systems are established.

 

Financial Performance

UNRA receives funding, for its recurrent expenditure and development from Government of Uganda (GoU) with the support of the Development Partners. This is used mainly for the design, rehabilitation and improvement of the paved roads and upgrading or construction of new roads.

In addition, UNRA receives funding from the Uganda Road Fund mainly for the maintenance of the road network. All funds are released on a quarterly basis.

Activity Budget Released/Expenditure Unreleased Outstanding Debts
Recurrent 82,562,016,513 53,895,415,137 28,666,601,376
Development     1,263,729,565,134     1,205,021,499,008              58,708,066,126     259,300,000,000
Maintenance 267,917,000,000 241,088,000,000 26,829,000,000

 

This ending FY 2015/16, we received 65% of the development and 90% of the road maintenance budget that was allocated to the UNRA Vote while the balance was not released by MFPED and Uganda Road Fund respectively. All funds which were released for the above activities were utilised, yet with a debt UGX 259.3 billionin unpaid invoices for works completed within the year. UNRA will pay for these outstanding invoices using next year’s budget, hence reducing the funds available for the 2016/17 programme by the same amount.

 

Network Planning & Engineering

This Directorate which was restructured to undertake studies and design of roads and bridges has been able to undertake several designs of roads using the consultants but in addition,  an in-houseteam has undertaken studies/designs for the following roads:

  1. Masodde – Nkooko – Nalweyo Road with a spur from Nkooko to Nalweyo (98Kms);
  2. Nakalama-Tirinyi-Mbale (100km)
  • Namunsi-Kapchorwa (28km)

With increased capacity and with the support of the consultants, the design portfolio will increase in the next FY. The list of roads that have been designed this FY is Annexed.

 

Road Development

We have upgraded approximately 238km of road from unpaved to paved bituminous standard, bringing the total paved road network to 4,157km (20%) out of the 20,544km,while the rehabilitation of 252km of the paved roads has been completed.

UNRA is now undertaking in-house Construction and Supervision of road projects. This year, the department hassupervised the following road construction projects:

  1. Moroto Town Roads
  2. Koboko, Maracha town roads
  • Moroto –Nakapiripirit road
  1. Kawempe-Kafu overlay

The Construction unit is in the offing awaiting acquisition of equipment.

The critical challenges in the development of roads and bridges have been:

  • Delayed Payments to Contractors and Suppliers attracting interest
  • Delayed Land Acquisition and Expropriation of Land attracting claims
  • Inadequacies in designs necessitating design reviews and updates.
  • Staffing Challenges in Land Acquisition.
  • Delayed procurements affecting project implementation
  • Inadequate funding for some projects
  • Poor performance of Contractors and Consultants which resulted in very poor compliance with the environmental and social safeguards.

In December 2015, due to the project implementation challenges on the upgrading of Kamwenge-Fort Portal Road, the World Bank cancelled the credit which was financing the road project through the Transport Sector Development Project and suspended financing for the Albertine Region Sustainable Development Project (Kyenjojo-Kabwoya) and NERAMP (OPRC on Tororo-Mbale-Soroti-Kamdini).

This was a set-back that affected progress on the Bank financed projects due to cash-flow challenges as GoU had to step in to finance the remaining works for the Kamwenge-Fort Portal Road. We have made significant progress in improving contract and social safeguards management and hope that the World Bank will be able to lift the suspension for the two projects financing Kyenjojo-Kabwoya and the OPRC on Tororo-Kamdini roads in July 2016. It should be noted that UNRA is putting more emphasis and is committed toestablishing lasting systems for sustainable improvement in place and not one-off solutions to a problem.

 

Road Network Operation and Maintenance

We were able to undertake significant maintenance activities on the paved and unpaved road network. However the network suffered two heavy rain seasons this FY which ravaged some structures and washed away pavements resulting in a number of cut-offs which required emergency intervention to restore the network to full functionality.

Limited financing for the maintenance of roads and bridges still remains a challenge. UNRA receives an annual budget from Uganda Road Fund amounting to 246.9 Billion to fund road maintenance and road network operations activities. However this budget is inadequate to fund all the necessary activities to keep the network in good condition and fully functional. The budget requirement for maintenance including improvement of the 10,000km of additional network to 1st class gravel is 600 Billion. With sufficient funding, we would be able to upgrade at least 3,400km un-engineered roads to 1st class gravel roads per year.

 

The operations activities include Vehicle load control, Ferry Services, Traffic and Road safety andEnforcement which are intended to keep the network fully functional at all times. The enforcement department is helping to protect the road infrastructure which has always been vandalised and the road reserves encroached on. This year has not been very busy but we shall see increased activities in the next FY when recruitment of more officers has been substantially completed.

We have increased the number of ferry crossings from six (2008) to nine (2015) and replaced the aged ferries at three sites with a new ferry with a higher capacity at Wanseko-Panyimurcrossing onAlbert Nile.

 

PLANS FOR 2016/17

The development (mainly construction of new roads) budget is allocated approximately 90% of all funding provided to UNRA while 7% has been allocated to the maintenance of roads. This means that the performance of UNRA, financially, is highly dependent on the performance and progress of the road development projects. While the Government road development programme has been growing, Medium Term Expenditure Framework (MTEF) ceiling for UNRA vote has been the same. This has resulted in the ongoing and planned programme having a deficit of UGX 1.7 trillion. Due to the budget constraints, there are therefore no new key projects to be financed by GOU commencing in the coming Financial Year. All effort will be concentrated on ensuring that Government gets Value for Money from the investment in the ongoing projects through improved management and supervision of projects while engagement with the Development Partners to support the programme continues.Works will continue through the year on at least the 1,000km of ongoing projects with the allocated funds. With the availed funding, it is hoped that 200km of paved roads will be added to the network and 185km of roads rehabilitated. Tendering will continue and shall be completed upto contract award for the planned 1,000km of roads for rehabilitation and upgrading. Contracts will be signed for projects for which funding is available. In addition, the ongoing works on the bridges will continue as shown in the Annex. Focus will also be on improving the systems and processes for better efficiency in operations and in the development and management of the network.

 

CHALLENGES

The current funding for the road maintenance and development programme is insufficient. With a 1,477km of maintenance backlog for the paved roads, Government would have to progressively double the financing of the maintenance budget to reinstate the roads to maintainable state. In addition, the 10,000km of unpaved roads would have to be upgraded to at least 1st class gravel roads and to remove the bottlenecks which create the emergency situations annually.

UNRA is currently designing and implementing a Government road development programme which is short by at least UGX 1.7 trillion. The successful implementation of the entire programme will depend on the financing availed in the coming and the subsequent years.

 

CONCLUSIONS

As UNRA celebrates 8 years of existence and the achievements attained so far, we use this time to reflect on the past, to help us shape our future better. There is no doubt that the past 1 year has been a difficult one to us, to the road users and to the sector at large considering the events that have occurred, i.e. the restructuring of the organisation which resulted in some functions being suspended, the el-nino rains which ravaged the road network, the suspension and cancellation of World Bank financing among others yet the public expectations remain high.

Despite all the challenges the paved road network has increased by 238km and the network has been maintained in generally good condition throughout the year.

Management is committed to building in-house capacity and seeing that all our initiatives succeed in introducing efficiency and effectiveness of our business next FY onwards.

I remain confident that the effort, progress and changes made thus far arean importantstep towards a lasting solution to the prevailing problems that have prevented the organisation from providing a road network that our road usersand the public demand for. Our long term desire is to provide a great road network that will provide great driver experience and one that will take Uganda to higher economic development levels.

I thank you!

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