Oil companies pay  Shs964 million to government for surface rent

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Kampala – Oil companies Tullow Uganda Operations Pty and Total E&P paid Uganda $270, 900 (Shs964.1 million) for surface rent between June and December 2016, according to the Auditor General.

Surface rent is paid by entities for the purpose of mining operations.

Of that amount, Tullow paid $157, 500 (Shs560.5 million) for the development of Nsoga, Ngege, Kasemene, Wahrindi, Nzizi-Mputa, Waraga and Kigogole-Ngara areas in the Albertine region.

The balance ($113, 400 – Shs403.6 million that Total E&P paid) was surface rent for the development of Ngiri, Jobi–Rii and Gunya, which are also in the Albertine.

The Shs964.1 million is far below the Shs2.4 billion the oil companies paid between January and June 2016.

As of December 2016, the cash in the fund was Shs271.5 billion, up from Shs255.8 billion in June 2016.

The government established the fund in March 2015 to serve as a depository for revenue due to the government from petroleum-related activities.

A letter by the Accountant General, Mr Lawrence Semakula though added that ‘with the exception of bank charges, no withdrawals have been effected from the Fund since its creation in March 2015’.

The bank charges for the six-month period up to December 2016 were Shs136, 188 down from Shs885, 065 between January and June 2016.

Parliament in December turned down the government’s request to withdraw Shs116.6 billion from the fund to finance the construction of roads in the oil belt.

According to the March 2 issue of the Daily Monitor, the roads are the Hoima–Butiaba–Wanseko (111km), Masindi–Biiso (54km), Masindi–Bugungu via Murchison Falls National Park (80km), Kaseeta–Lwera via Bugoma Forest (16km), Hohwa–Nyairongo–Kyarushesha road (25km), and Wanseko-Bugungu (23km).

Others include Lusalira–Nkonge–Sembabule (97km), Kyotera–Rakai (20km), Buhimba–Nalweyo–Kakindu–Kakumiro–Mubende (100km) and Kabale– Kiziramfumbi road (30km).

The Speaker of Parliament, Ms Rebecca Kadaga, said then that by not tabling an Appropriation Bill before Parliament first, as the public finance law dictates, the government had not followed the necessary laws to move the money.

The money in the fund is meant to refinance infrastructure and development projects, not recurrent expenditure.

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