Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI



Ugandan government suspends 58 suppliers

Supply Management

28 November 2013 | Will Green

The Ugandan government has published a list of 58 suppliers who have been suspended from bidding for public contracts.

The Public Procurement and Disposal of Public Assets Authority (PPDA) has suspended the firms for a range of reasons including submitting forged bid securities, works not completed on time and invoicing for work not carried out.

The suspensions range in duration from one to five years.

Among the firms is Amman Industrial Tools & Equipment Ltd, which has been suspended indefinitely for causing a $1.7 million loss to the government in connection with a contract to provide 70,000 bicycles.

In a statement the PPDA said: “The firms and their directors will no longer be allowed to participate in any public procurement process during the duration of their suspension.

“Some firms like Amman Industrial Tools & Equipment Ltd and their directors have been suspended indefinitely for causing $1.7 million financial loss to the Government of Uganda.”

A full list of the suspended providers can be found here.


Chinese maze: Uganda’s procurement mess threatens East African rail project

Africa Review

By Michael Wakabi

July 13, 2013

As Presidents of Kenya, Uganda and Rwanda prepare to meet in Nairobi next month for a review of progress on resolutions they made in Entebbe late June, concern is emerging over recent developments in Kampala that threaten to derail East Africa’s grand rail project.

Just weeks to the meeting, Kampala is scrambling to work its way out of a maze of Chinese construction firms, all fighting for the lucrative tender to build a new railway network extending to the border with South Sudan and a new port on Lake Victoria.

During the two-day meeting between the presidents that ended on June 25, the three countries parcelled out roles to fast-track the development of key infrastructure projects.

Uganda was assigned the lead role in rail sector development and political federation while Kenya will champion the pipeline development and electricity sectors, and Rwanda the Customs, single tourist visa and EAC e-Identity card projects.

But implementation of the rail development could run into early trouble as the procurement process gets caught up in a maze of Chinese firms and their lobbyists.

At the centre of the bitter fight are four companies – China Civil Engineering and Construction Corporation, China Harbour and Engineering Company, China Communications Construction Company, and China Harbour Engineering Company Ltd (CHEL), who have signed memoranda with different arms of government.

The situation not only exposes Uganda to litigation, but could also result in a messy contest that could delay the project’s implementation.

One part of the story is that President Museveni, who wants the Uganda People’s Defence Forces to participate as a way of building capacity and lowering the construction costs of similar projects in future, made an offer to two different Chinese firms. It has also emerged that two of the contenders are actually different subsidiaries of the same mother company.

On February 17, 2004, President Museveni held a meeting with the chairman of China Civil Engineering and Construction Corporation (CCECC) in Kampala, during which they discussed the firm’s participation in the development of a regional railway network. A follow-up meeting was held between the company and then Minister for Works and Transport John Nasasira in October 2006.

In between, the scope of the project changed to include development of a modern railway network to replace the Kampala-Malaba-Tororo-Pakwach line as well as an extension to Nimule on the border with South Sudan.

Engineering brigade

Four years later, in October 2010, in a letter to the chairman of CCECC, President Museveni said he had directed his Works Minister and the Chief of Defence to work with the company “on modalities aimed at forging a working relationship that is aimed at paving a way for developing and implementing this massive infrastructure project.”

In December 2011, CCECC entered into an MoU with the governments of Uganda and Tanzania for the development of a new port at Mwambani, Tanga, a port at Musoma, supply of marine vessels to ply the route between Musoma and Kampala, construction of a new port at Bukasa in Kampala, and upgrading and extension of the railway line from Tanga to Arusha through to Musoma.

Omari Rashid Nundu, the Minister for Transport, then signed for Tanzania while Dr Stephen Chebrot, the Junior Minister for Transport, signed for Uganda.

A month later, in January 2012, Uganda entered into a separate MoU with CCECC under which the Ministry of Works committed to engage the Chinese firm as a sole contractor for upgrading the rail line between Kampala and Malaba.

In a surprise turn of events, however, Abraham Byandala, the Senior Minister for Works and Transport, also signed a separate MoU for the same project with another Chinese company, the China Communication Construction Company (CCCC) in March 2012.

The situation was compounded further when President Museveni wrote to Mr Byandala in September 2012, to assign the project to China Harbour and Engineering Company Ltd (CHECL), which had been introduced to him by US lobbyist Rosa Whittaker.

In that letter, the president accused unnamed officials in his government of infiltrating his meetings with CHECL, stealing minutes and selling its ideas to CCCC, the firm Mr Byandala had signed the MoU with.

Just as he had proposed in his October 2010 letter to CECC, the president directed that the firm Ms Whittaker was fronting for should work with the UPDF engineering brigade.

While President Museveni could have confused the new firm with CCECC, his latest instructions set the stage for a series of activities, culminating in new MoUs and a due diligence exercise that took three officials from the Works ministry to Cameroon and China. Among other issues, the team found that CHECL was a subsidiary of CCCC, the company the president accuses of pirating the former’s ideas.

Although the Ministry of Works is pressing ahead to enter a conclusive MoU with the CHECL, this comes against a backdrop of warnings from the Attorney-General, the Solicitor-General and the Ministry for Ethics and Integrity about the existence of parallel memoranda, and the financial and political risks this exposed Uganda to.

The findings

Already, CCECC claims to have spent $20 million on feasibility studies, whose findings it has already submitted to the Ugandan government.

At the end of a June 27, 2013 meeting that discussed the report of a due diligence committee, it was resolved that the Ministry of Works give the UPDF a “letter of no objection” to finalise an MoU between the parties.

Uganda’s Minister of State for Works John Byabagambi, who chairs the National Co-ordinating Committee, told The EastAfrican that while there was indeed a problem of multiple memoranda, he was optimistic the government would negotiate its way out of the sticky situation.

“I am seeing a way out, and the memoranda should really have no big impact on implementation of the project. There is only one that is open-ended, which has the potential to disrupt the programme. We shall sit with all the parties and find a way out,” he told The EastAfrican.

Uganda must move with haste to resolve the controversies. A meeting of the national technical committees is scheduled to take place in Nairobi on July 22 to prepare a brief for the heads of state meeting in August.

Mr Byabagambi blames Uganda’s situation on “oversight on the side of the people who signed the different memoranda,” and the uncoordinated actions emanating from “new people in the relevant portfolios sometimes adopting positions before knowing what had transpired before.”

But as Uganda wallows in confusion, Tanzania’s Deputy Minister for Transport Dr Charles Tizeba toldThe EastAfrican that his side had made progress, with feasibility studies and had even compensated residents in Mwambani, where Tanga port is to be built.

99 percent of Ugandan contracts over budget


2 July 2013 | Adam Leach

Lack of attention to detail and poor market research by buyers are to blame for more than 99 out of every 100 public sector contracts in Uganda last year running over budget, according to the Inspector General of Government.

In its third annual report into corruption within government, the IGG found that the number of procurements that kept to budget had dropped to just 0.7 per cent of those let over the past year. It blamed purchasers for leading to unrealistic estimates of overall costs. The situation also appears to be deteriorating as in 2009, only half of contracts were found to have gone over their original budget.

The report said: “Price increase during execution, through change orders in specifications or cost, may be grounds for corruption. This is a significant red flag of a possible entry point of corruption and calls for integration of risk management into public procurement.”

The report, which covered contracts in 2012, also criticised public sector buyers for taking too long. It found that less than a third of procurements – 29 per cent – were completed when they were supposed to.

Uganda: NGO sues UMEME over contract

New Vision 

By Roderick Ahimbazwe

A non-governmental organisation has taken UMEME to court over failure to make details of its 20-year-concession contract public. 

The power distributor is jointly sued with the Government and the sector regulator in a suit filed at the High Court in Kampala yesterday.

The African Institute of Energy Governance (AFIEGO) along with 1,927 others want the Government to reveal the details of the contract it signed with UMEME.

The public who are the consumers are entitled to know what transpired between UMEME and the Government when signing their contract. That is why we are taking UMEME,  the Electricity Regulatory Authority, the Uganda Electricity Distribution Company Limited and the Government to court,” Dickens Kamugisha, the AFIEGO chief executive officer, said yesterday.

Kamugisha revealed that his organisation had tried to ask UMEME for details of the contract but that they had been told that the contract was confidential.

“We want court to terminate this contract because the terms are very unfair to the people of Uganda who are the consumers of power,” he noted.

Kamugisha observed that since UMEME was getting paid for any power losses, it was not in its interests to improve electricity services because it stood to gain from the rebates.

Kamugisha also wondered why the findings of the Saleh Commission were not being investigated by the Government. The Saleh Commission that reviewed the UMEME contract found out that the tariffs were expensive, while the Government was paying a lot of subsidies to UMEME.

“The commission made several recommendations, which are yet to be implemented,” Kamugisha said.

He said his organisation, unlike the Saleh Commission, does not want the contract reviewed but rather terminated and the running of the electricity sector given back to the Government or put up for competitive bidding. Owen Murangira of Murangira and Advocates, the AFIEGO attorneys, said his client was concerned about the high electricity charges and the poor billing system based on estimation.

“AFIEGO wants electricity to be declared a right so that everyone is entitled to cheap power. It also wants the billing of power by estimation to be declared unlawful,” he said.

Uganda: Government installs computers to track grassroots spending

Daily Monitor

August 8th, 2011

By Benon Herbert Oluka

The government has begun implementing a computerised financial management system that will enable the Ministry of Local Government to track all transactions carried out up to the lowest levels of government.

The Permanent Secretary in the Ministry of Local Government, Mr John Kashaka Muhanguzi, said the project named the Tier 2 Integrated Financial Management System (IFMS) will initially be rolled out to 26 local governments. The project, which is being funded by the government with support from the World Bank, is expected to cost $4.3 million (about Shs11.6 billion)…The centralised system, according to the consortium of three companies that won the bid to implement it, is capable of delivering critical public sector functioning, covering budgeting, financial planning and reporting, procurement and asset management, among othersRead more.

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