IGG INVESTIGATES PROPOSED UGX 1.596 BILLION PAYMENT TO CHINA RAILWAY SEVENTH GROUP IN ARUA CITY

Arua City Signage

By Dramadri Federick

Arua City

The Inspector General of Government (IGG) has commenced investigations into the intended payment of 1.596 billion Shillings to China Railway Seventh Group Company Limited under the Uganda Support to Municipal Infrastructure Development Additional Financing (USMID-AF) project in Arua City.

The inquiry follows a directive issued by the State House Anti-Corruption Unit (SHACU) on 24th June 2026, ordering the Arua City Clerk to immediately halt the payment.

According to the Anti-Corruption Unit, it had received information indicating that the Arua City Executive Committee had recommended settling what was presented as the contractor’s outstanding balance. This recommendation was reportedly inconsistent with findings contained in a report by the Contracts Manager, which indicated that the contractor was not owed the money in question.

Following the directive, the Inspectorate of Government officially took over the matter and has since launched investigations.

Speaking on the matter, IGG spokesperson Munira Ali said the investigations were triggered by a whistleblower complaint alleging a purported connivance between the City Clerk, the Mayor, and China Railway Seventh Group Company Limited to irregularly process the payment of 1.596 billion Shillings.

According to Munira, the complaint further alleges that the first City Council resolution had reportedly approved payment of only 1.524 million Shillings from the 2.023 billion Shillings supplementary budget that had been allocated to settle outstanding contractual obligations and other pending works.

However, officials allegedly later sought to process a payment exceeding 1.59 billion Shillings, raising questions over how the figure was arrived at.

She said the investigation will establish whether the allegations are authentic, determine whether any procurement laws or public financial management procedures were breached, and recommend appropriate action should any wrongdoing be established.

“For this matter right now we are establishing the facts and asking each person who participated in the project and from the inquiry is when we shall know what action to take,” Munira Ali stated.

Since Monday this week, the Inspectorate of Government has been conducting inquiries with technical officers who participated in the implementation and management of the project.

Those summoned include the Community Development Officer who also served as the project focal person, Officials from the City Engineering Unit, the City Planner, the City Clerk, the Chief Finance Officer, and other technical officers connected to the project.

Each officer has appeared individually before investigators to respond to questions regarding the processing of the disputed payment.

Meanwhile, Arua City Mayor Lawrence Alionzi says the suspension of the supplementary payment has had financial implications for the city.

According to the Mayor, nearly 2 billion Shillings that had already been appropriated for the settlement of contractual obligations reverted to the Central Treasury after the payment process was halted pending investigations.

Alionzi said the city welcomes the investigations by both the State House Anti-Corruption Unit and the Inspectorate of Government and intends to request the relevant ministry to return the funds.

“This particular matter of the 2 billion shillings had become the matter of public interest. We welcome the investigators of the State House Anti-Corruption Unit or even the IGG because we don’t know what they know. We shall write back to the ministry to request them to revert back the money because it was not spent,” Alionzi explained.

The disputed payment relates to the 14.03 billion Shillings Uganda Support to Municipal Infrastructure Development Additional Financing (USMID-AF) project, which involved the rehabilitation of Go Down Road and other supporting infrastructure within Arua City.

The project was implemented between the 2019/2020 Financial Year and December 2023 before its completion period was extended to June 2024.

However, concerns later emerged after the former Arua City Council reportedly identified anomalies in some of the certified payments. The council observed that several works which had been paid for had either not been fully executed or required deductions.

Following these findings, the former council revised the amount payable tenders by both the contractor and the City Clerk from 1.596billion Shillings to 1.524 million shillings to the contractor from the supplementary allocation. The 2.021Billion was budgeted to procure 132 street lights of the total 2.023Billion shillings.

That decision was later overturned by the current City Council, whose actions have now become the subject of the ongoing investigations by the Inspectorate of Government.

The Inspectorate of Government says investigations remain ongoing and will establish the facts surrounding the disputed payment.

The inquiry is expected to determine whether public procurement regulations, financial management laws, or other statutory procedures were violated and, where necessary, recommend administrative or legal action against any individuals found culpable.