Gulu University has paid a hefty sum of Shillings 527.5 million to Chongqing International Construction Corporation (CICO) as accrued interest due to delays in contract payments, an audit report from the Auditor General has revealed.
The university had signed a contract with CICO on June 19, 2019, valued at Shillings 30.12 billion for the construction of the Gulu University Business and Development Centre. However, financial constraints led to a one-year delay in clearing payments, resulting in substantial interest costs.
According to the Auditor General’s report for the 2023/24 financial year, two interim payment certificates amounting to Shillings 2.3 billion were submitted by CICO, but the university failed to pay on time, leading to the accumulation of the Shillings 527.5 million interest.
Construction of the multi-billion-shilling complex, which began in 2019, was slated for completion by July 2023. The project was designed to ease congestion and provide additional learning space for 6,000 students. However, Gulu University’s Public Relations Officer, James Ojok Onono, attributed the delayed payments to inconsistent government funding.
Onono explained that government funds were released in phases, with some financial years seeing no remittance at all, leaving the university unable to meet its contractual obligations. He further noted that due to non-payment, the contractor had abandoned the site at one point, only to return later, but is once again threatening to halt work due to ongoing financial challenges.
“Our plea to the government of Uganda is to release the funds in full to ensure smooth progress. The contractor cannot work reliably when payments are inconsistent,” Onono stated.
As of now, only 30% of the construction work has been completed, with just Shillings 6 billion (20% of the total contract value) paid to the contractor.
The Auditor General’s report also highlighted other financial irregularities at the university, including a Shillings 18.9 million payment to suppliers who lacked supplier numbers, in violation of E-Cash payment guidelines. Additionally, a sum of Shillings 14.7 million advanced to employees in the 2023/24 financial year remains unaccounted for, contrary to the university’s human resource manual.
Budget shortfalls have continued to affect Gulu University’s operations. In the 2022/23 financial year, the institution faced a funding gap of Shillings 4 billion, forcing it to shelve several critical projects. The University Council had initially approved a budget of Shillings 57.7 billion for the 2021/22 financial year, but this was later reduced to Shillings 53.7 billion the following year.
For the 2023/24 financial year, the university had an approved budget of Shillings 68.65 billion, but only Shillings 68.52 billion was released, resulting in a shortfall of Shillings 130 million.
As the university struggles with financial challenges, stakeholders are calling on the government to streamline funding processes to avoid further project delays and financial penalties
