on a piece of land that had previously been a part of Joint Clinical Research Center (JCRC), but that was embroiled in controversy. A family linked to the Buganda Royals claimed that the government had grabbed their land, and a legal suit was in the works.
Between November 2014 and December 2018, a series of legally-binding agreements were made between the Government of Uganda represented by the Ministry of Finance, and FINASI/ROKO. This was a Public-Private Partnership (PPP). The sum total of these agreements was that FINASI/ROKO would indeed build, equip and staff the hospital, and that Uganda would pay for it over a period of six years, beginning two years after commencement of the construction. Uganda was to pay a tidy sum of US$ 379.7 million (1.4 trillion Uganda shillings) for the hospital. FINASI/ROKO was to source for the funding, and Promissory Notes for this amount were to be issued by government. In this entire time, Ministry of Finance officials never once walked across the road, a stone’s throw away, to ask Parliament if this was all right. And the Partnership never so much as made courtesy calls on the Ugandan medical fraternity, situated principally in a one-mile radius, in particular the professional associations, whose membership had considerable knowledge and experience concerning specialized health care. Most specialist doctors in government employment had their eyes fixed on New Mulago Hospital, which had been closed for renovation. Their patience was wearing thin as the reopening got repeatedly delayed, amidst rumors of insufficient funds. Many senior doctors therefore paid scant attention to the developments in Lubowa. They were jolted to full alert when the progress in Lubowa hit its first serious snag.
On 20 December 2018 the first Promissory Note was due, following FINASI/ROKO’s presentation of the first Milestone Completion Certificate. According to the agreements, Government was obliged to hand over the Promissory Note within two days. The following day the Attorney General told the Ministry of Finance that they could not issue Promissory Notes without Parliamentary authorization. The law stipulated that ‘Government shall not enter into a transaction that binds Government to a financial commitment for more than one year except where the financial commitment is authorized by Parliament.’ This was not a new law. It was puzzling that the Partnership had negotiated so many financial arrangements and signed so many agreements, involving a sum that was 80% of the Ministry of Health’s 2017/18 budget4, without seeking this approval.
There was no time for finger pointing – if someone had been sleeping on the job, they had slept long enough. Ministry of Finance did not exactly run across the road to ask Parliament for help, but in February 2019, they did the next best thing. They presented Parliament with a brief: ‘On the Proposal to issue Promissory Notes not exceeding US$ 379.71 million to FINASI/ROKO Construction SPV Ltd for the financing of the design, construction, and equipping of the International Specialized Hospital of Uganda at Lubowa.’ In summary, Finance told Parliament that they had defaulted on legally-binding agreements, and that if Parliament did not hurry up with the approval, they ran the risk of having the agreements terminated. ‘The termination of Project Agreements will potentially lead to loss of Government monies and cause serious damage to Uganda’s reputation among international investors and the international financial community.’ They concluded with a simple enough request: ‘…authorize government, by passing a Resolution of Parliament, to issue Promissory Notes of up to US$ 379.71 million, subject to the certification of the completion of Project activities by the Ministry of Health Owner’s Engineer, in line with the Bills of Exchange Act 1933.’ To avoid time lost in the drafting, the Ministry of Finance attached a draft Resolution for the Clerk to Parliament to append his signature.
Parliament could have quickly obliged. A messenger could have darted across the road with the signed copy of the resolution in hand, and the Ugandan family honor would have been redeemed. But as is bound to happen when time is truly of the essence, a few people started to pick at the brief. The figure of US$ 379.71 million seemed somewhat high, even for a super-specialized hospital. Maybe they recalled that the newly opened specialized Women and Neonatal Hospital had cost a small fraction of the amount, although it had almost twice as many beds. Before long what should have been a quick remedial procedure, maybe sidestepping the usual parliamentary deliberation, now blew up into a full scale national debate on the Lubowa hospital – its worth, its true cost, and its ownership. In a sharply divided house where the opposition voice holds little sway, there were surprisingly many dissenting voices among the ruling party MPs. The Uganda Medical Association executive weighed in on the matter.5 They pointed out that the Mulago upgrade had stalled for lack of a tiny fraction of the money now being availed to this new venture, while existing specialized facilities such as the Uganda Heart Institute and the Cancer Institute were starved of funding. The problem was not too many fine hospitals – indeed, even with this addition, Uganda would still be woefully short of quality hospital facilities. The devil, as always, was lurking in the details. The brief to Parliament contained a phrase that was worrisome to Mulago: ‘Government will appropriate under the Ministry of Health Development budget all the current expenditures on the medical treatment abroad as the major source of repayment to meet the Project Costs incurred by the Developer.’ If that happened, Mulago would continue to face hard times. Addressing the press on the Medical Association’s petition to Parliament, Association president Dr. Ekwaro Obuku pointed out that for the country’s transformation, the political class needed to have faith in Ugandan institutions and Ugandan professionals. Frank Asiimwe, a surgeon at Mulago, famously likened the government to a polygamous husband that neglects his old faithful wife on acquiring a new bride.
The Secretary to the Treasury, Keith Muhakanizi, was at pains to explain to the uninformed public that all was in order, and that Promissory Notes were a perfectly normal form of financing. More questions arose. At 264 beds for US$ 379 million, the ISHU was set to have the most expensive hospital beds on the continent – a million dollars per bed - and it would rival hospitals like the Mayo Clinic in USA. With Uganda’s GDP among the lowest in the world, how was the cost ever going to be recouped? Why would medical tourists come to this untested institution, instead of going to South Africa or India, where tried and tested services cost less? The clock was ticking as the debate raged on. When all progress seemed doomed, the matter was escalated back to where it started – to State House. The President was quick to respond.
On 25 February 2019 President Museveni wrote to the Speaker of Parliament concerning the Lubowa hospital. His endorsement of the Lubowa project was unequivocal, and read in part:
‘The Ministry of Health should assist Ms Enrica Pinetti to build her hospital at Lubowa so that referrals abroad stop and we stop the hemorrhage of an estimated $150 million per year that goes into “medical tourism” to India. The heart, the kidneys, the brain and the cancers should all be treated here.”
President Museveni’s letter to the Speaker of Parliament
concerning the proposed International Specialised
Hospital of Uganda (ISHU) at Lubowa.
With that firm and clear guidance, the Lubowa question was settled. That should have been the end of the saga. It was not.
Barely a month after Parliament authorized the financing, it emerged that a part of the money for the construction – US$37 million - had gone missing. The Speaker of Parliament immediately called for an inquiry. Before the investigation got underway FINASI turned up at the construction site with armed men in military and police uniforms, and in the company of some Chinese, and they ordered partner ROKO’s workers off the site. FINASI’s Pinetti said she wished to replace ROKO with another construction company, China Power. ROKO appeared unprepared for the move, and their Chief Executive Officer was quoted as saying that the development was absurd. They were soon in court to defend their interests in the turbulent Public-Private
