Uganda risks a costly international arbitration if it terminates the contract of a private operator managing toll collection and operations on the Kampala-Entebbe Expressway, the Attorney General has warned.
This week, parliament’s committee on physical infrastructure, chaired by Mwine Mpaka, called for the immediate termination of French company EGIS Road Operation S.A., which was contracted by the Uganda National Roads Authority (Unra) on April 13, 2021, to operate and maintain the expressway.
Dissatisfied with EGIS’s performance, the committee made at least 14 recommendations, including transferring operations and toll collection on the 24-kilometre expressway to the ministry of Works and Transport.
The committee also wants the Uganda Revenue Authority (URA) to take over toll collection, arguing that direct government control would reduce the cost of private contractual arrangements and free up more resources to service the debt incurred to finance the expressway.
EGIS’s five-year contract, valued at Shs 122.86 billion, took effect on May 24, 2021 and provides for a possible extension of up to 24 months, subject to satisfactory performance.
However, in a response presented to parliament, deputy Attorney General Jackson Karugaba Kafuuzi said government cannot simply terminate a valid contract without first establishing that the operator has committed a persistent breach and following the termination procedure provided for in the agreement.
Kafuuzi told parliament that EGIS must first be formally notified of any breach and given 14 days to remedy it. Where improvement works are delayed, the contract provides for liquidated damages and reductions in payments.
Termination on grounds of persistent failure, he said, can only arise after specified contractual thresholds have been reached.
Kafuuzi instead advised the ministry of Works and Transport to undertake a comprehensive assessment to establish whether EGIS’s failures meet the contractual threshold for termination.
EGIS obligations
EGIS’s obligations extend beyond toll collection to include road-safety improvements, lighting, tolling infrastructure, an independent traffic monitoring system, an automatic vehicle classifier and systems for controlling overloaded vehicles.
The committee found that several of these obligations had not been fully implemented.
MPs cited incomplete installation of the independent traffic monitoring system and automatic vehicle classifier, inadequate carriageway lighting and road-reserve fencing, as well as shortcomings in the high-speed weigh-in-motion systems.
The committee argued that the failures justified taking the expressway back under direct government management. Although Kafuuzi acknowledged that failure to complete works within agreed timelines constitutes a contractual breach, he stressed that a breach does not, by itself, trigger immediate termination.
Pinnacle contract disputed
The legal response also challenges Parliament’s concerns over the extension of a related contract involving Pinnacle Security Limited. The committee recommended an investigation into the former permanent secretary over what it described as an illegal Shs 36.3 billion extension allegedly granted without the Attorney General’s approval.
The Attorney General’s office disputes that finding, saying the ministry of Works and Transport extended the contract through a letter dated May 20, 2026, with the extension running from May 24, 2026 to May 24, 2027.
According to the legal opinion, the extension was provided for under Clause PCC 39.1 of the original agreement and did not introduce additional expenditure.
The Shs 36.3 billion cited by the committee, the office said, formed part of the original contract price, making the extension a “no-cost extension” that did not require fresh legal clearance.
The office also rejected claims that the novation agreement transferring the contract to Pinnacle had not been legally approved, saying the Solicitor General cleared it on April 22, 2026.
Kafuuzi said satisfactory performance remained a condition for the extension and that responsibility for assessing performance against the agreed key performance indicators rested with the ministry.
URA takeover faces legal hurdle
Parliament’s proposal to hand toll collection to URA also faces a legal hurdle. The Attorney General says the Roads Act places responsibility for toll collection on the relevant roads authority, in this case the ministry of Works and Transport.
As a result, the function cannot simply be transferred in its entirety to URA without legislative changes, although the two institutions can collaborate in administering the tolling system.
The ministry also cannot immediately take over the expressway’s operations while the existing operating contract remains legally enforceable. Rather than an immediate takeover, the Attorney General supports a forensic audit of the EGIS and Pinnacle revenue collection systems from their inception.
The audit is intended to establish whether government lost revenue that should have been used to service the loan that financed the expressway.
Audit exposes weaknesses
The legal response points to the latest information systems audit, finalised on August 19, 2026, which identified several weaknesses in the expressway’s operations.
These include high operating costs, weak governance systems, network-security vulnerabilities, incomplete overload-control systems, limited payment options, manual vehicle classification, unsupported toll exemptions and prolonged lane closures.
The Attorney General also addressed concerns over free toll passes issued at the Busega Toll Plaza.
Parliament’s inquiry found that free passes worth Shs 314.355 million had been issued between January 2022 and June 2026. The Attorney General said recovery of the money from the contractor may not be straightforward because, although the Roads Act specifies categories of vehicles and persons exempt from toll payments, the contract also provided for free passes for certain ministry and operator staff.
The legal opinion said the irregularity was attributable to government and therefore could not automatically be recovered from the private operator.
The ministry and Attorney General’s office have proposed regularising the exemptions through appropriate statutory instruments.
Caution over prosecutions
The Attorney General also urged caution over calls for criminal investigations and prosecution of officials involved in the procurement, management and oversight of the expressway.
The office said determining whether offences were committed should be left to the relevant authorities, noting that Article 120 of the Constitution gives the DPP authority over investigations and prosecutions.
It further noted that previous Auditor General reports had not identified irregularities in the procurement of EGIS. The proposed forensic audit, the office said, should first establish whether financial losses occurred and quantify any loss before responsibility is assigned.
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