EU Head of Delegation Speech at the 10th Joint Transport Sector Review October 24, 2014 (24/10/2014)

CLOSING STATEMENT BY DEVELOPMENT PARTNERS

Delivered by the EU Head of Delegation
H.E AMBASSADOR KRISTIAN SCHMIDT

AT THE OCCASION OF THE
10th JOINT TRANSPORT SECTOR REVIEW
DAY 2, SESSION 3
FRIDAY 24th OCTOBER 2014

Honourable Minister of Works and Transport

Honourable Ministers of State for Works and Transport

Honourable Members of Parliament

Ladies and Gentlemen

It is a great pleasure for me to address this audience on behalf of all Development Partners active in the transport sector: the World Bank, African Development Bank, Japan International Cooperation Agency, DFID, DANIDA and the European Union – the current chair of the DP group.

I thank those who worked hard to prepare this 10th Joint Transport Sector Review. The Review is an essential process of dialogue between the sector stakeholders -- certainly in times where we see a substantially increased budget for the sector and the finalisation of the National Development Plan for the next five years 2015-2020.

We welcome the new emphasis put by the Government on Multi-Modal transport. We agree that roads alone cannot be the answer, nor is it a sustainable path to efficient service.

Railways, waterways, airports are indeed essential elements of the regional transport network. Urban transport and access to Kampala and to the major cities is also of increasing importance.

I do not need to mention the traffic jams that we are all experiencing on a daily basis…

Honourable Minister, Ladies and Gentlemen,

Allow me to point out five key issues for the agenda of the coming year:

First, Institutional Reforms and Strengthening of good practices
As Uganda prepares for an important expansion of the infrastructure works, present and future investors need to be reassured that there are well-functioning Regulatory Institutions; clear, transparent and efficient procurement procedures and respect for the rule of law.

We must voice our concerns in that regard. Development partners note with great concerns that larger corruption cases reported frequently relate to this sector. We are worried that this reveals systemic weaknesses in the sector, such as the lack of adequate procurement and internal control procedures.

This leads to the loss of significant amounts of public resources, as in the case of the Mukono-Katosi contract that you have mentioned this morning. Development Partners are encouraging you and will support you, Hon. Minister, in all your efforts to take efficient and rapid corrective measures in order to avoid these episodes from happening again in the future.

Also on the institutional front – despite the alarming rate of road accidents, putting Uganda within the region as the third highest number of fatality rates per circulating motor vehicles – we note that the National Road Safety Authority, although announced last year, has still not yet materialised.

Likewise, the creation of other Regulatory Institutions such as URURA, MATA and MTRA -- all essential for the implementation of projects funded by development partners and also announced last year – are still not there.


Second point, the role of Transport in the National Development Plan II (NDP II):

Here, on a more positive note, the Development Partner Transport Group appreciates the occasion given to them to comment on the issues paper prepared for the NDPII by the Ministry of Works and Transport.

I am glad to inform you that the Development Partners support the Key Priority Areas mentioned and in particular:

  • A multi-modal strategy allowing the most efficient use and interconnection of different transport modes;
  • Increasing the sustainability of transport sector development programs including adequacy of maintenance financing, improved asset management practices and the availability of appropriate financing Instruments to support the NDPII implementation;
  • Human resources capacity development, together with progress on the Institutional and Policy Reform process as already mentioned.

Honorable Minister, Ladies and Gentlemen,

Let me turn, thirdly, to the question of financing.

The main aim of last year's Trans-East African Networks "Match Making" Conference, organised with support of the EU, was to identify financing mechanisms, and in particular blending mechanisms to be used for mobilizing additional resources to cover the funding gap in terms of unfulfilled infrastructure development programs for the region.

Since then, interesting new investment opportunities have been emerging and possible investors, public and private, local and international, have been identified. I'm pleased to announce that following the conference, a number of international and private financial institutions, like KFW and others, have already expressed interest to join the group to support the sector through the various and possibly more innovative financing mechanisms.

The above concepts have been confirmed again at the recent Summit of Heads of State on the Northern Corridor Integration Projects.

Obviously, while additional resources are indeed necessary, we fully concur with the emphasis recently put by His Excellency the President of the Republic of Uganda on the concepts of Value for Money and Implementation Efficiency.

Fourth point, securing and increasing funding for road maintenance

Development partners recognise the efforts by the Government to increase the road maintenance budget by 70 billion over last year's budget. However, the balance between the construction of new roads and effectively maintaining the existing network has not yet been reached.

We call on the Government to take urgent and effective steps to save road assets from further deterioration, in order to better convince Development Partners to continue their financing of capital investment in the road sector.

Linked to this, we appeal to you to fight the persisting problem of overloading and to improve axle load control, including through harmonization of legislation with other East African Community's countries as well as accompanying measures to ensure compliance by private sector operators.

Our fifth point is calling for support to the Private Sector
Indeed, increasing private sector participation is the theme of this Review. So we are glad to note that the enactment of the Uganda Construction Industry Commission (UCICO) is being prepared and we request to expedite its finalisation. We would like to know as well how UCICO will apply lessons already learned by the Road Industry Council which is supported by several partners.

Government has showed commitment to develop the local construction industry capacity, but this process might be hampered by the use of force account. DP's believe that force account leads to high maintenance costs that limit the sustainability of the scheme. Force account should be used more in the context of small repairs in remote areas and when answering to situations of natural emergencies.

Honourable Minister, I will now conclude my remarks on behalf of your development partners.

Many of the DP's are currently finalising their next programming cycle. This should allow us to mobilise and allocate funds in coherence with the national transport priorities. Indeed, funding predictability and timeliness are essential to support the growth of the Ugandan construction industry.
The follow-up of the Trans-East African Networks Regional "Match-Making" Conference and the further development of innovative financial instruments will assist your Government in its quest for resources to further develop Uganda's infrastructures.

Progress towards a coherent and comprehensive multi-modal transport vision in the country and in the region, clear national transport priorities linked to the needs from the key productive sectors such as agriculture, oil, tourism and regional integration is strongly supported by the Development Partners.

Having said that, I would like to underline that in order to convince Development Partners and financiers to continue to invest in new developments in the sector, it is important that we see concrete steps to improve maintenance and the institutional capacity to properly and transparently manage the new ambitious plans of the sector.

Thank you for your attention.