Parliament Blocks NWSC’s UGX600bn Loan Over Unpaid Government Water Bills

A plan by the National Water and Sewerage Corporation (NWSC) to borrow more than UGX600 billion from commercial banks to finance infrastructure projects has been rejected due to the Corporation’s weakened creditworthiness, stemming from unpaid water bills amounting to UGX69.94 billion owed by government Ministries, Departments and Agencies (MDAs).

The revelation was made by Herbert Ariko, Chairperson of Parliament’s Committee on Environment and Natural Resources, while appearing before the Budget Committee to present the Committee’s report on the 2026/27 National Budget Framework for the Corporation.

“National Water and Sewerage Corporation had planned to mobilise UGX600 billion from domestic banks to finance water infrastructure in various towns, with an estimated requirement of between UGX19 billion and UGX20 billion per town,” Ariko said.

He added that NWSC’s ability to access financing had been constrained by outstanding arrears from government entities. “However, the ability of NWSC to mobilise financing has been curtailed in the market, largely due to outstanding arrears totalling about UGX69.94 billion from 40 MDAs as of December 2025. These arrears have hindered the Corporation’s efforts to secure funding for water infrastructure development,” he said.

Ariko further informed the Budget Committee that although Parliament had recommended the provision of UGX81 billion to clear water bill arrears to zero by June 2025, the funds had not been remitted to some MDAs. He noted that between July and December 2025, new arrears had accumulated, raising the likelihood that outstanding bills could return to UGX80 billion or more.

He called for the strengthening of compliance mechanisms to ensure that once funds are appropriated, they are fully and directly remitted for their intended purpose.

Remigio Achia, Vice Chairperson of the Budget Committee, urged Ariko to escalate the matter of unremitted water bills to the Ministry of Finance. “This matter should be captured and reported to the Ministry of Finance. Why do they continue allocating money to entities that do not pay?” Achia asked.

He added, “The Ministry of Finance should be held accountable because they oversee the vote holders. As we proceed with the budget process, the first call should be on this UGX69.94 billion.”

Moses Aleper, Vice Chairperson of the Finance Committee, committed to engaging the Ministry of Finance on the matter. “As the Committee on Finance, we are going to take this issue up with Treasury operations and ensure that it is fully addressed,” Aleper said.

Achia further faulted the Ministry of Finance for failing to remit funds for water bill arrears directly to NWSC, instead channeling the money through MDAs, which he said often divert the funds to other expenditures.

“You requested UGX81 billion and Parliament approved the supplementary budget. Why not remit the money directly to NWSC? Instead, it is sent to vote holders who may choose to use it for other purposes,” Achia said. “This raises serious concerns about collusion. We must, as the Finance Committee, commit to getting to the bottom of this matter.”