World Bank Statement on Cancellation of the Uganda Transport Sector Development Project (TSDP)

December 21, 2015

WASHINGTON, December 21, 2015World Bank Group President Jim Yong Kim today announced the cancellation of funding to the Uganda Transport Sector Development Project (TSDP) due to contractual breaches related to workers’ issues, social and environmental concerns, poor project performance, and serious allegations of sexual misconduct and abuse by contractors. Kim said that an early review of the World Bank-financed project found inadequacies in Bank supervision and lack of follow-through after serious issues were identified.

The multiple failures we’ve seen in this project -- on the part of the World Bank, the government of Uganda, and a government contractor – are unacceptable,” said Kim. “It is our obligation to properly supervise all investment projects to ensure that the poor and vulnerable are protected in our work. In this case, we did not.  I am committed to making sure we do everything in our power – working with other stakeholders – first to fully review the circumstances of this project and then to quickly learn from our and others’ failures so they do not happen again. The World Bank is committed to be a global leader in Environmental and Social Standards in the development sphere, and part of that critical responsibility is to watch projects closely and ensure that risks are properly addressed.”

On September 28, 2015, a Request for Inspection was registered by the Inspection Panel, an independent complaints mechanism for people and communities who believe that they have been, or are likely to be, adversely affected by a World Bank-funded project. The Request concerned complaints received from the Bigodi and Nyabubale-Nkingo communities located along the Kamwenge to Fort Portal Road. The Request contains numerous allegations of adverse environmental and social impacts stemming from the Project’s construction works, including impacts related to road safety and compensation for land acquisition, as well as serious allegations of road workers’ sexual relations with minor girls in the community, and sexual harassment of female employees.

On October 22, the Bank suspended the financing for the project. After further review, and after the Government of Uganda and the government contractor did not take corrective steps, Bank management informed the Board on December 17 that it was cancelling the project.

Because of the serious nature of the allegations, Bank management has informed the World Bank Board and the Inspection Panel that it will take action on the project even while the Inspection Panel carries out its important work.

The World Bank also is committing to several immediate follow-up actions related to this project, including:

  • The Bank will work with the government to support the affected communities, help ensure that people are protected from retaliation, and address deeply rooted social problems.
  • With a view to making needed improvements, the Bank will conduct reviews to assess related risks in other parts of our programs in Uganda and other countries, and
  • The Bank will commission its own review of the project, which will include a focus on Bank supervision.
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