By Nasser Kasozi Akandwanaho
A report by the Committee on Statutory Authorities and State Enterprises to parliament has recommended the punishing of all officers involved in the execution of a Memorandum of Understanding between Uganda and the Export Import – EXIM Bank of China and the China Communications Construction Company – CCCC in what they called bad a deal to expand and upgrade Entebbe International Airport.
The report was presented before Parliament on Friday by the COSASE Chairperson and Nakawa West Member of Parliament Joel Ssenyonyi.
On October 28th 2021, Parliament directed the committee to investigate matters raised by Bukooli Central Member of Parliament Solomon Silwanyi, based on information from a whistle blower about the misuse and mismanagement of funds collected at toll gates at Entebbe International Airport, accumulation of unpaid allowances and non remittance of NSSF deductions for the staff at the Uganda Civil Aviation Authority.
In meetings held with the Board and Management of the Authority, Ministry of Finance Planning and Economic Development, Ministry of Works and Transport, the Attorney General, Seyani Brothers (U) Limited, China Communications Construction Company among other entities, the committee noted that Uganda Civil Aviation Authority entered into a Memorandum of Understanding with CCCC with no evidence competitive bidding flouting procurement laws of the country.
“The committee also observed that the MoU was signed in July 2012, prior to the feasibility study on the project which was signed in December 2013 which was wrong,” the committee report reads.
They committee insisted that the MoU was irregular and that for all intents and purposes, “the MoU signed between the Ministry of Works and Transport and CCCC established a contract, identified a bidder, spelt out the type of contract and design and build on the project and determined the source of funding. The MoU did not create competitive bidding,” the report further reads.
The committee thus recommended that all officers in the Ministry of Works and the Attorney General’a office who were involved in the flawed MoU be held responsible and punished.
The committee also noted that a contract entered with the China EXIM bank for thr expansion of Entebbe International Airport had unfavorable clauses.
Among the clauses included a requirement for an Escrow Account where all revenues of UCAA were to be deposited and Beijing (China) had to approve all expenditures of UCAA.
Also Beijing has to approve UCAA budget and the imposition of Chinese legal jurisdiction on the loan recovery mechanism around arbitration and the waiver of international immunity for Uganda.
“The Minister appeared before the committee and acknowledged that some terms of the loan agreement were unfavorable.” The report reads.
The committee noted that due diligence was not carried out by the negotiators on the government side and recommended that “The Minister of Finance Planning and Economic Development should be cautioned and should apologize to the nation for his role in this unfavorable loan agreement.”
Also, the committee noted that the remittance of NSSF for staff at UCAA worth Ugx 3.6 billion has not been done while there is gross mismanagement of the toll and Parking fees by the Uganda Civila Aviation Authority.
During the hearing, several stakeholders including Seyani Brothers (U) Limited disclosed how an expert who graduated at 13 years was hired to work on the expansion and upgrade of Entebbe International Airport.
Parliament will now debate the report and make resolutions immediately.