The Uganda Civil Aviation Authority (UCAA), under the leadership of Director General Fred Bamwesigye, is facing mounting financial and operational challenges, as revealed by the Auditor General’s report for the year ended December 2024. The audit highlights a combination of uncollected revenues, rising debt levels, procurement irregularities, and delays in critical projects—raising concerns over UCAA’s capacity to effectively manage Uganda’s aviation sector and fulfill its regulatory mandate.
UGX 723 Billion Debt Raises Concerns Over Financial Sustainability
According to the audit report, UCAA’s total debt reached UGX 723.63 billion as of June 2024, an increase from UGX 636.90 billion the previous year. This debt is primarily tied to the on-lending agreement between the Government of Uganda (GoU) and UCAA for the Entebbe International Airport expansion, financed by the China EXIM Bank.
While the Government has made repayments to the lender, UCAA has not yet reimbursed the GoU as required under the terms of the on-lending agreement. The Auditor General noted that the limited revenue generation from the expanded terminal, combined with financial constraints, has hindered UCAA’s ability to meet its repayment obligations, raising concerns about the long-term sustainability of its financial position.
Revenue Shortfalls: UGX 2.6 Billion Uncollected from Key Tenants and Government Entities
The audit also reveals a significant revenue gap of UGX 2.6 billion, stemming from UCAA’s failure to enforce the updated rental rates at the New Cargo Terminal Building at Entebbe International Airport. Two ground handling companies occupying the terminal space have continued to pay the old rate of USD 7 per square meter, instead of the USD 15 per square meter set by the Chief Government Valuer (CGV). This has led to an unpaid balance of USD 1.389 million (approximately UGX 5.2 billion) as of June 2024.
Additionally, several government entities occupying airport facilities have outstanding rental obligations totalling UGX 2.678 billion. The absence of formal tenancy agreements has limited UCAA’s ability to enforce collections. The Ministry of Foreign Affairs has also not settled an inherited debt of UGX 58.043 billion from MONUSCO, further exacerbating UCAA’s financial pressures.
Procurement Gaps and Contract Management Weaknesses
The audit highlights procurement irregularities, including the award of contracts worth UGX 2.24 billion without valid bid securities, exposing UCAA to potential risks of non-performance.
Delays in executing contracts valued at UGX 11.08 billion were attributed to issues such as late advance payments, shipping challenges, and unresolved land disputes. The report also found that UGX 73.37 billion worth of procurements were not fully documented in the Electronic Government Procurement (eGP) system, with missing records such as signed contracts, bid opening documents, and approvals from the Solicitor General.
Project Delays Undermine Infrastructure Goals
Out of 44 activities assessed, worth UGX 52.5 billion, only one activity—valued at UGX 0.35 billion—was fully implemented. Seven outputs (25 activities) worth UGX 33.53 billion were partially implemented, while 14 outputs (18 activities) worth UGX 18.62 billion were not implemented at all.
Tribunal Backs URA in UGX 10.2 Billion Century Bottling Tax FightKey delayed projects include:
- The Passenger Terminal Building expansion, which is 85% complete.
- The Unified Security System, with 60% of work completed.
- The proposed Aviation Training Centre, delayed due to unresolved land acquisition issues.
- The Control Tower Complex, where design procurement is ongoing.
These delays, the report states, are largely the result of funding constraints, procurement inefficiencies, and design-related challenges.
Car Parking Revenue Management Lapses
The report also points to issues in managing car parking revenues at Entebbe International Airport, including:
- 654 irregular transactions worth UGX 1.3 million.
- 15,539 transactions (UGX 31.6 million) lacking payment references.
- 23,908 exit transactions without corresponding entry records.
- 54,585 transactions missing vehicle license plate details.
Additionally, UGX 68.6 million was irregularly spent at source through IOUs before being banked, in breach of financial controls.
Recommendations for Reform
The Auditor General has recommended that UCAA:
- Finalize tenancy agreements and resolve rental disputes with tenants at the Cargo Terminal.
- Strengthen procurement oversight, enforce bid security requirements, and improve contract execution timelines.
- Collaborate with the Ministry of Finance to address system gaps in the eGP platform.
- Improve financial controls and data integrity in the car parking revenue system.
- Accelerate completion of critical projects by addressing funding and procurement challenges.
Management’s Response and Next Steps
UCAA management has acknowledged the audit findings and indicated that efforts are underway to address the identified challenges, including stakeholder engagements, system enhancements, and efforts to resolve pending issues.
The audit findings underscore the need for UCAA to urgently address revenue collection inefficiencies, procurement irregularities, and project delays to safeguard its financial health and support Uganda’s aviation sector ambitions. As the Authority navigates these challenges, the focus will remain on how Fred Bamwesigye and his leadership team implement reforms and restore confidence in UCAA’s operations
