The State House Anti-Corruption Unit has ordered Arua City authorities to suspend plans to pay more than Shs1.5 billion to China Railway Seventh Group Company Ltd as investigations into the disputed claim get underway.
In a directive addressed to Arua City Town Clerk David Kyasanku, the head of the unit, Brig. Gen. Henry Isoke, instructed city officials to immediately stop processing the payment to safeguard public funds while inquiries continue.
According to the letter, the Contract Manager for the Uganda Support to Municipal Infrastructure Development Additional Financing (USMID-AF) project has challenged assertions that the contractor is entitled to the money for works allegedly carried out in the city.
“To protect public resources and maintain the integrity of the ongoing investigations, we request that the intended payment of Shs1.5 billion be halted with immediate effect,” Brig. Gen. Isoke wrote.
The intervention follows an extraordinary sitting of the Arua City Council held on June 10, during which councillors approved payment of the disputed amount to China Railway Seventh Group Company Ltd. City officials argued that the funds were meant to settle contractual obligations dating back nearly two years.
Documents presented to councillors indicated that the claim relates to road upgrades, drainage construction and street works implemented under the World Bank-funded USMID-AF programme when Arua was still a municipality. Officials maintained that Arua City inherited the liability after attaining city status.
Between 2022 and 2024, the Chinese firm undertook the upgrading of more than six kilometres of roads and construction of drainage channels in the then Arua Municipality.
City authorities told councillors that approximately Shs1.2 billion remained unpaid by the former Arua Municipal Council, leaving an outstanding balance that the city administration was expected to clear. However, the claim has generated controversy, with some leaders questioning its authenticity.
During deliberations, several councillors expressed concern that key supporting documents, including a contract addendum, had not been availed despite the matter having appeared before the council on earlier occasions.
Others criticised what they termed undue pressure to approve the payment within a limited timeframe, arguing that councillors needed sufficient time to scrutinise the documents.
The issue had reportedly been tabled before the council at least twice before but was postponed after some crucial records could not be located.
Councillors were also informed that the Ministry of Local Government had convened three meetings with city officials and advised the council to endorse the payment within four days. According to officials, failure to do so could affect Arua City’s eligibility for Shs126 billion earmarked under the Uganda Cities and Municipal Infrastructure Development (UCMID) programme in the 2026/2027 financial year.
The debate, attended by an Assistant Commissioner from the Ministry of Local Government, was marked by concerns from councillors who insisted that public funds should not be released without adequate verification of the supporting documentation.
Prior to the council meeting, a four-page anonymous document titled “USMID-AF Corruption Scandal in Arua City Deepens” circulated on social media. Signed only as “The Cleaner,” the author alleged that the recommendation to compensate the contractor was based on a non-existent debt and questioned whether the city’s new leadership would investigate the matter or become entangled in it.
The allegations contained in the anonymous letter could not be independently verified.
With the State House Anti-Corruption Unit now investigating the matter, payment to the contractor will remain on hold until the probe is completed.
By press time, Arua City officials, the Ministry of Local Government and China Railway Seventh Group Company Ltd had not issued public statements regarding the directive or the ongoing investigations.
English 