We were conned on Katosi road deal – UNRA

Lawyers representing CICO maintain that the Chinese company is a victim. Do you believe this argument?

We received orders from the Inspector General of Government not to entertain any bids from CICO pending investigations. That is what we know for now on the premise that the company may not be clean as they want us to believe. UNRA was hoodwinked by Eutaw and I cannot rule out the fact that CICO also could have fallen victim of this. However, note we were given certain orders and the matter is being investigated. We wait to see the outcomes.
Then why not let them complete what they started?

CICO is being investigated and the fact that we don’t have a contract with them also makes the matter more complicated. But the wise thing is to wait for the outcomes of the investigations by police and the IGG then we will come up with a way forward.

UNRA was directed to reopen the procurement process and get a new contractor as well as not entertaining bids from CICO in the new bidding, but you did not carry out a competitive tendering process. Would you say this process was transparent?

We were advised to do an emergency procurement and we had to pick the companies, which we thought are credible and technically capable. This is called selective bidding. We picked two companies which we think are fully established so it would be pointless to accuse us. Bids are handled at two levels, the first is evaluation by our team here and the second is conducted by a team in London.

If bids go through two processes, how did Eutaw con UNRA?

Evaluating bids in the UK only started about two years ago after the Katosi bid. The process for Katosi started in 2010. It was halted and we revisited it three years later. No due diligence was conducted and bids did not go through the parallel bidding. The people who participated in the Katosi bidding in 2010 had been sacked by former executive director, Mr Ssebanakita. So when we resurrected the process it was just paper work left that we went through and that is how we hit the wall.

So who is to blame for this?

We fully take responsibility as UNRA, but one thing we can assure the country is that it will never happen again. We were under political pressure to implement the [NRM] manifesto. That is why we had to hurriedly go back to the old bids to have a project started and completed in time.

Who was mounting political pressure? You talk as if some political force had a gun on your heads?

Not in that sense. Roads are political tools, a President, a Member of Parliament has four years to deliver on a promise, which happened in this case. The road had been earmarked during the last campaigns [in 2011] and we had lost so much time. When money was allocated to undertake it, we did everything out of pressure, resurrected the last or old bids. We thought we were saving time by not restarting the entire process.

Works minister Mr Byandala from the onset of the scandal blamed his predecessors for the mess. He said his role was to sign the paperwork and that he found everything on the table. Was that so?

Mr Byandala is a politician and usually says things according to the situation. It is right, when he came to office he found everything had started. But nonetheless as UNRA we take the blame.

But even for resuming a procurement process, due diligence had to be conducted. You are taking blame but damage has already been done. Why didn’t you think of doing due diligence in the first place?

There are many ways of conducting due diligence. For starters, the real Eutaw exists in the United States except that some clever individual misrepresented it and manipulated us. Red flags were raised at every stage, from the procurement to the payment. There was suspicion on the documents the company submitted but, we did not think through it enough.

Going forward, you paid Shs24b to a phony company which subcontracted another company. What will happen next?

We know CICO is on site, but is on our project illegally. We were never consulted on their sub-contract and we don’t have a contract with them.
The IGG has cited collusion between Eutaw and CICO. Is this true?
That is a subject under investigations and I don’t want to comment on it.
There is the issue of a bank guarantee which allegedly was replaced by an insurance bond. Can you say UNRA was not aware?
Yes, the bank guarantee was a fake as was the insurance bond. The fact that someone in UNRA was aware is something I leave for the investigators.
So UNRA is equally willing to accept liability for the loss of Shs24b?
Not really. The most depressing thing is that we knew early enough that we had been conned. But we decided to leave Eutaw [CICO] on the ground because if they had been left behind by someone who had defrauded us, then they would have to do the job. So we would not register a financial loss.
So despite someone fleecing you of money it was okay to formalise the deal with CICO/Eutaw?
It was not okay. UNRA managers had proceeded to formalise the contract with the sub-contractor but when the IGG said it was wrong, the contractors were sacked. So although it was optional [to formalise the contract], we were under pressure from the minister to conclude the contract. But the IGG insisted it was wrong. We have heard several issues with our procurement in the recent times but this kind of fraud in our system is unprecedented. Our system has never been infiltrated to his level.
So you will bear with the loss?
Not at all, we intend to recover our money through legal action. CICO doesn’t know us and we don’t know them but at least we know the people in Eutaw: Mr Ssenketos, McCoys, who we gave our money and we will follow them up to the US.
But why not let CICO finish the job?
We are caught up here. If we are to go by what the IGG, then a price has to be paid for that. We cannot let impunity prevail, that is why we stand by the IGG’s orders.
So in that sense you think CICO are part of the fraud?
CICO is not a new company in Uganda. We have contracted them on several projects and we think they are good. But on this particular project we don’t know how they came to be involved on the site. Going by what the IGG has presented, we look at them as partners [of Eutaw] who colluded.
This was taxpayers’ money that was defrauded and for purposes of transparency someone has to pay the price. Some UNRA managers have been suspended , and out there someone has to pay the price also.
What is the way forward?
People blame UNRA for the mess which is unforgiveable. This happened because we resumed an old procurement and signed contract in rush despite all the red flags because we had pressure to deliver on the road project which is someone’s promise. However, there are internal stricter mechanisms and working with the World Bank, DFID, on several projects we ensure utmost transparency.
CICO secured a court injunction halting any action against them and their lawyers wrote to you on the matter. Did you allow them to participate in the new bidding?
They have also put us under different pressures since then. But to me, their pleas have a lot of deficiencies. They are here to make money, but they should also learn to respect the law in this country. We are recovering from the trauma of being defrauded and the last thing we expect is to go into panicking under pressure from someone else. I feel bad for them. The fact is that they are good contractors but they have to let go. If government decides to get a new contractor, it will be without them.
So what is on site right now?
Nothing is happening. All works were halted although we expect to have a new contractor by December 15. There is a lot of excitement and media frenzy in Kampala over the scandal, but the beneficiaries of the road want it urgently. The Finance ministry has released another Shs5b to compensate persons affected by the project. So we hope when the project resumes, compensations will be complete.

Blackmail
Reports that the project cost has shot up to Shs165b, according to UNRA is blackmail because bids are yet to been evaluated. This, UNRA says, might be a ploy to derail investigations by the IGG and those trying to ensure that justice prevails. The agency also says it does not want to tolerate corruption or any other flows. However, the agency says in the event that CICO, which sued UNRA wins the case, it will be bad for the fight against corruption in Uganda.