An end-of-year parliamentary investigation into management at Uganda National Roads Authority (Unra), Uganda Broadcasting Corporation (UBC), National Forestry Authority (NFA), Uganda Railways Corporation (URC), National Housing and Construction Corporation (NHCC) and the Rural Electrification Authority (Rea) found leadership challenges, decisions tainted with fraud and incompetence are a daily occurrence.
According to the committee report presented in Parliament on December 21 by Bugweri MP Abdu Katuntu, “It is the committee’s view that there is inadequate supervision of these entities by the boards and or parent ministries. Where there has been supervision, it was under undue influence.”
MPs further found that for the period under review, from 2013/2014 to 2014/2015, there was high-level fraud and incompetence, and that any achievement was more of an accident than deliberate.
Accordingto the report, evidence obtained by the committee showed interference by would-be supervisors of the entities.
SICK UNRA
The report found fraudulent transactions by Unra and reveals that the entity is too sick and requires close supervision by both the executive and Parliament. The report also cautions that the executive should not unduly interfere with the entity’s professional management.
“Some of them [board members] are part of the problem. Ministers and political leaders should get out of the procurement process since they are supervisors,” Katuntu warned.
Katuntu added: “The committee observes that police and the inspectorate of government should work closely to investigate and prosecute persons that are involved in fraud. We do note that the IGG has no officer(s) attached to our committtee. Our recommendation is that police should be more vigilant and act upon the information unearthed which is criminal in nature.”
According to the report however, the commmittee used its residual powers to recover billions of shillings that had been siphoned out of the country and also traded in.
“For the period under review, this institution can be described as extremely sick. Whatever can go wrong in an institution indeed went wrong in Unra. Fraud coupled with incompentence was the order of the day. Any achievement was more of an accident than deliberate,” the report said.
Almost all the projects audited were riddled with gross management problems. The committee, therefore, recommended that the auditor general should audit all Unra projects to make sure that challenges identified in those projects do not recur.
CONTRACTS
The report found that many contracts were awarded before appointing consultants and this led to contractors mobilizingmachinery and taking over sites yet they couldn’t start work in the stipulated timeframe as per the contract. Because of that, billions of shillings were paid to contractors for the idle time and equipment.
“All the explanations given to the committee were not tenable. An example is M/S Energo project Niskograndja, which was paid $ 3, 213, 876 as idle time and equipment on the project on Kawempe- Kafu road,” Katuntu said.
The delayed provision of work designs by Unra to the contractors, according to the report, causes a lot of delays, a case in point being the Soroti-Mbale-Tororo road, where road designs were given to the contractor after 15 months.
INCOMPETENT CONSULTANTS
Some Unra consultants were found to have authorised bogus payments. For example, the report said, a Chinese contractor, China International Construction Corporation (CICO) made a claim of Shs 1,840,314,546 purportedly arising out of late approval of an environmental license by the National Environment Management Authority (Nema).
“Yet, the committee was later to ascertain that indeed Nema issued the necessary environmental impact assessment certificate within time. The consultant had, however, already passed the claim and Unra paid out the monies,” the report said.
The consultant told the committee that he was not well versed with the Ugandan law.
UNRA ENGINEERS
The report reveals that Unra had engineers and other professionals but relied on the consultant and made payments that shouldn’t have been made.
MPs observed that the recruitment processes for consultants should be re-examined to make sure that competent firms are selected and that Unra should have internal capacity to verify certificates for payment.
PROCUREMENT
The report also recommended that any contract that does not follow the proper established procurement laws and processes ends up with challenges. The report cited the example of the Entebbe Expressway. Although the committee is still considering the project, Katuntu told the House that Unra informed the committee that the expressway was an ‘unsolicited bid’.
The cost for the 51.4 km road project is US$ 479,172.020.74 million, which translates into US$ 9.3 million per kilometer. However, this does not include the Uganda government counter funding.
“The contractor solicited the bid, did the feasibility study, the design and eventually became the contractor. There was no competitive bidding at all; this resulted into inflated costs, making the whole project unbelievably-expensive,” Katuntu said, adding: “The consultant engineer was also offered by the Chinese embassy. The committee further learnt that Unra had to hire another consultant in addition to the one procured by the Chinese to carry out supervision. This led to double expenditure. The committee is still examining the engineering audit of this road, in regard to the design, costs and whether the overall project objectives are to be achieved,” he said.
Katuntu argued that when the committee on the National Economy and Parliament examine loan requests by government for Unra, they must ascertain that proper procurement processes are guaranteed by ensuring there is a statement of undertaking by government for strict adherence to procurement laws before any loan is approved.
Loans, Katuntu said, should be accompanied by the procurement plan and that the minister responsible for Works tables a quarterly brief to the committee on National Economy on the status of the procurement process.
SCANDAL OF THE YEAR
A sum of Shs 47,738,040,619 was advanced to five Chinese firms as compensation to project affected persons (Paps).
According to the report, the firms were to open up independent imprest accounts as per the contract, which was supposed to be monitored and transactions be authorized by Unra, which they did not do for payments to the Paps. The firms immediately put the entire amount to their own use.
“The funds were used in their operations and some were being put on their private bank fixed accounts to earn monthly interest. One of the Chinese firms transferred the money to China. The committee recovered all the unutilized funds plus interest totaling to Shs 32.5bn. The committee was unable to recover the interest on the monies that were transferred to China because we had no evidence of interest earned,” the report said.
PAYMENTS TO NON-CONTRACTED PARTIES
According to the report, Unra was making payments to companies that they did not contract.
“The big Chinese companies bid and indeed outbid their rival local companies and instead a local company is incorporated in the names of the international company, case in point is China Railway No 3 International Ltd and China Railway No3 (U) LTD contracted to do the work and eventually all contractual payments are made to the local one, yet the performance guarantee is from the International Chinese company,” he said.
Katuntu noted that the practice makes Unra vulnerable to many risks, including dealing with fake companies. He, therefore, said there was need by government to investigate in detail all the accounts of those companies where Unra paid the funds, adding that a possibility of corrupt payments made from these companies cannot be ruled out.