By Max Patrick Ocaido
Upon its completion, the Lubowa International Specialized Hospital will revolutionize Uganda’s ailing health sector, the contractors have said.
The contractors- Finasi/Roko Construction SPV have assured the public that the country got a ‘good deal’ and that they are committed to constructing a 264-bed state of the art health facility that meets the Joint Commission International (JCI) standards.
In March 2019, parliament approved promissory notes of $379 million (over Shs1.4trn) for the construction of the specialized Hospital in Lubowa, Wakiso district. Subsequently, the contract was handed to a joint developer- Finasi/Roko Construction SPV with Finasi holding 95% shareholding as compared to Roko’s 5%.
Whereas the civil works are anticipated to take duration of 2years after its commencement on June 10, 2019, works were temporarily stalled following a legal dispute filed in the High Court by Roko claiming they are ‘unfairly treated’ by Finasi in favour of a Chinese subcontractor, M/s PowerChina Guizhou Engineering Co.Ltd. Whereas Roko secured a court injunction to stay, Finasi has filed an appeal which will receive its partial ruling on August 15, 2019.
PROGRESS ON THE SITE
In an exclusive interview with our reporter- Max Patrick Ocaido, Finasi directors said that despite ongoing legal disputes, works are ongoing and that the Lubowa hospital construction project is on track and ahead of schedule.
“We received commencement order from the ministry of health on June 10 and based on that our work program is ahead of the work implementation schedule which is our contractual obligation with the government of Uganda. Works are progressing even more rapidly than it was expected such as completion of designs, foundation drawings which are in the process of being approved. So you will start seeing movements and marking of the site in the next few weeks. So regardless of what you hear, the project is on track and works will be finished on time,” Hisham Sultan, director, Finasi International FZC said.
Simone Palmieri, the Chief Operating Officer, Finasi/Roko SPV Ltd said that their commitment with government is to provide a functional state of the art hospital with full JCI accreditation.
Joint Commission International (JCI) is a U.S based nonprofit organization that works to improve patient safety and quality of health care in the international community by offering education, publications, advisory services, and international accreditation and certification.
Simone said that on July 18, they signed a master service agreement with JCI to work with them starting with the design of the hospital, policy and procedures, core business flow of the hospital, patient and safety standard, quality assurances, training of staff and others.
“This is a great milestone because it is the first time JCI has taken full partnership with a hospital in the African continent. This is also very important for the country in upgrading the health care system to international standards,” Simone said.
HOW PROMISSORY NOTES WORK
Simone Palmieri refuted allegations that the promissory notes given to them is in form of a loan, saying their contractual obligation with government is to look for finance, construct and equip the hospital and hand it over to government who will later on pay them in a period of 8years.
He explains:
Every time we reach a milestone, we have a right to issue an invoice to the government and government may pay this invoice or invoices not later than 8years after the hospital has been handed over to them. Therefore, after we have completed the hospital, government would have received a number of invoices which they will start to pay after we hand it over to them.
There is a lot of confusion even within the MPs who believe that it is government that gave us a loan to build this hospital. We [Finasi/Roko] are financing the project and government will pay us later. So it is more like it is Finasi/Roko which is giving a loan to government of Uganda.
This promissory note is a transferable document, so we can also pass it to another entity to request for more support to achieve this project and this does not in any way have any further financial implication on government.
ALLEGATIONS ON MISSING FUNDS
Parliament is currently investigating allegations that $37m (Over Shs 140 billion) set aside for the construction of $379m Lubowa International Specialized Hospital had gone missing. Apparently, the East and South African Trade Development Bank released $87 million on 16 May 2019 and Stanbic Bank only received $50 million of the $87 million.
There is a public outcry that government could lose billions of shillings in this project. When tasked to explain the disparities in the funding, Simone said that they are not aware of such a transaction and that there is no way government is losing money because it is not them [government] financing the project, adding that it is ‘private money’ from the developer.
“Look through the budgetary financial report and see if there is any provision in the payment of the alleged $87m. Why? Because government is not paying, government will only pay when the hospital is completed. Government has no commitment in the budget or even facing financial liability,” Simone said.
“We are found the money lenders, we are accountable to them. We pick the money from the lenders, use it and will deliver the hospital to government in 24months,” Hisham Sultan, director, Finasi International FZC chipped in.
Moses Matovu, Head of Legal, Finasi/Roko Company said that one of the responsibilities government expects of them is to arrange finances for the hospital.
“So government says we want this hospital, go and look for finances to build it and after building it then we shall pay you. So this is private money and it is inaccurate to suggest that government is losing money,” Matovu said.
Hisham Sultan assured Ugandans that government will not pay any other cost overrun in this project other than the $379m cost that is payable in a period of 8years after completion of the facility.
“This project is locked in terms of the final amount ($379m) so there cannot be any cost overrun. Government will not pay one dollar more than what was agreed in the agreement. So any other cost incurred is the responsibility of Finasi/Roko. So there is no worry that government will spend more money than what was agreed with us. This hospital will revolutionize your health system. This is not just a hospital, but an infrastructure that will change the face of the health system in the country,” Hisham said.
Apart from ongoing court disputes, lawyer Matovu says one of the challenges the project is facing is resistance from some sections of the public including those in government who have not received the project well. He is however confident that the contractor understands their obligation and that they are well equipped to deliver the hospital despite such challenges.
The contract between Finasi/Roko and government is much bigger than just a construction contract; it is a spectrum of things that stretch way beyond construction. Among other things that Finasi is contracted to do in the construction of the Lubowa Specialized hospital include; financing, design, equip, construct, train, operate, supply consumables for the first one year.
