UNRA pays Shs22b to wrong company

PARLIAMENT.

The Uganda National Roads Authority (Unra) paid Shs21.9 billion to a company it did not contract to construct a road.
The lawmakers on the Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) yesterday heard that Unra wired the money to China Railway No 3 Engineering Group Uganda Limited through accounts numbers 90300 0924 5110 and 90300 0924 5188 in Stanbic Bank in Kampala.

Unra officials paid China Railway No 3 Engineering Group Uganda Limited the fee between July 2015 and June 2016 for work on the Kanoni-Sembabule road.

But the contract for the road works was between Unra and China Railway No 3 Engineering Group Company Limited, a China-based company.
Ms Mary Kuteesa, Unra’s director of legal services, said an official of the China-based company had told Unra to pay the Uganda ‘affiliate’ the money.

“The letter that Unra relied on to make the payments is authored by the then authorised officer of the company that Unra contracted,” Ms Kuteesa said while appearing before Cosase.

Ms Kuteesa added: “The letter, on June 12, 2014, to the director of procurement of Unra, asked Unra to make payments to two accounts, one for the local currency and the other for foreign currency.”
Though China Railway No 3 Engineering Group Uganda Limited says the China-based company delegated it. It says the delegation was done before China Railway No 3 Engineering Uganda, was formed.
China Railway No. 3 Engineering Group Uganda was incorporated in Uganda on June 10 2014.

However, the powers of attorney by China Railway No 3 Engineering Group Company Ltd to the Uganda ‘affiliate’ is dated October 15, 2013.
“The power of attorney [to China Railway No 3 Engineering Group Uganda] was given to it before it [China Railway No. 3 Engineering Group Uganda] was born,” Cosase’s chairperson Abdu Katuntu (Bugweri), said.

China Railway No 3 Group Uganda Limited’s managing director Li Chum said in his opinion, the two companies are one and the same, an opinion he reconsidered after consulting his lawyer.

Mr Chum said in some cases, the parent company in China bids for contracts and once it bags them, finds local companies to do the work.
Now that Cosase is investigating the issue, China Railway No. 3 Engineering Group Uganda Ltd has reportedly transferred shares to the China-based company.

Same old story
The Shs21.9 billion Unra paid to China Railway No 3 Engineering Group Uganda is just about the same amount it paid to Eutaw in 2014, a fictitious company. Unra is now trying to recover at least Shs18 billion from a representative of Eutaw.