IGG says govt official covering up Katosi mess

Sunday November 16 2014

The Inspector General of Government Irene

The Inspector General of Government Irene Mulyagonja Photo by Geoffrey Sseruyange 

By Frederic Musisi

The Inspector General of Government Irene Mulyagonja has stuck to her guns over the botched Mukono-Katosi road and ordered for fresh procurement of a new contractor. She says some officials in government are trying to cover up the mess and protect the Chinese company, CICO, which colluded Eutaw to con UNRA of Shs24 billion. Daily Monitor’s Frederic Musisi interviewed her and here are the excerpts:-
You recently directed that CICO be evicted from the site because it has not contract, an order that has not been enforced, what will happen next?
I never directed for CICO to be removed from the site because that is the work of UNRA. What I directed was for UNRA not to entertain any bid from the company in the new bidding process and that no further payments until further orders.
CICO is on site and there illegally. They have already mobilised and done some work. However, the principles of procurement in Uganda demand for transparency, competition and value for money. If CICO participates in a fresh procurement it will have an unfair advantage over other bidders.
The Attorney General Peter Nyombi and Junior Minister of Works John Byabagambi, say the company did not do anything wrong and a new procurement will increase the project costs and the bureaucracy. Don’t you find this plausible?
As Inspectorate, we cannot keep quiet about these issues because our mandate is to ensure strict adherence to the law and principles of natural justice, as well as good governance in public offices.
We also cannot watch top government official try to cover up the embarrassment caused to H.E the President when he was made to launch this sham of a project. The truth must come out and then efforts should be made to ensure that similar incidents do not happen again.
Your office and the Attorney General recently disagreed on the fate of CICO. Is there any way forward?
The AG presented his legal opinion to the President on October 29 before I had released my findings so how did disagree with him? If he argued that my earlier directive was based on mere suspicion which cannot prove that CICO engaged in the alleged illegal activity knowingly and willingly, well, then I have since proved that there was collusion between CICO and Eutaw.
I think he presented his opinion without facts, but since then they (facts) have been made known to the public. And in any case the Inspectorate has no obligation to follow the opinion of the AG, and Courts have ruled on this one before.
By the look of things, UNRA, AG and Ministry of Works want CICO to complete the project. I also understand the matter has gone to the President. Shouldn’t be there coordination of efforts given the fact that gov’t was defrauded?
We are not in a competition. Our problem is that CICO was part of this fraud all along and for that matter cannot be left on complete the work. The other company, Eutaw entered into agreement with government doesn’t exists anymore, so what do we do?
As mandate as the Inspectorate is to ensure adherence to the rule of law which was never the case here; People tend to think we only deal with corruption which is not the case. CICO has no contract with government so what is there basis for continuing work?
What is exactly with wrong CICO that they cannot be given clemency and now government agencies all seem fighting and protecting interests?
Like I said before, CICO was part of this scheme right from the start. After Eutaw signed a Shs165 billion deal with UNRA which was determined in 2010. CICO was then was subcontracted to take on the job for Shs155 billion.
But the agreement that Eutaw has with UNRA was that not more than 30 percent of the road works shall be subcontracted. I wonder whether it will be realistic for CICO to do a good job with the proposed UGX 155 billion.
Secondly, no permission of the employer nor the consultant was sought on whether to subcontract the works. Where is the transparency in all this? What is important though is that CICO should not be allowed to benefit from its illegal actions in procuring the job. Government was hood winked and it should not allow itself to open up further possibilities of such deceit.
Now that CICO has dragged gov’t (you, Attorney General and UNRA) to Court and a hearing set for 2015, what are the likely implications?
The date given by court (January 8th) for hearing is too far away for a project of national importance such as this one. The pleadings indicate that CICO, and I think the Ministers, hope that the President will step in and prevail over the Inspectorate by affirming the AG’s opinion. But the President has not responded to CICO's letter which was dated 25th September 2014. It is more than a month since they wrote to H.E.
The court should not give CICO the benefit of halting the procurement on the basis of speculation that the President is going to intervene. It should go on and expeditiously dispose of the AG. Most importantly, CICO seeks to rely on the alleged sub contract with EUTAW which was never sanctioned by UNRA. Delaying the hearing of the suit will be allowing CICO to abuse the court process.
Do you have powers to enforce your decisions on the Katosi road case?
We are still continuing with our investigations, and at this time I cannot determine what decisions will be taken later on. But I can assure you that where we find anyone specific, take for example the UNRA managers whom we have jurisdiction over in ensuring rule of law, that they are culpable; we will certainly call for action.
With regard to the desire by the Ministers and the AG to retain CICO to complete the works, CICO came on site illegally. And that fraudster, EUTAW, has caused loss to government of at least Shs12 billion which can never be accounted for or recovered because EUTAW does not exist.
CICO participated in transferring at least Shs4.6 billion to EUTAW in America. Ultimately, CICO covered up for the fraudsters by executing the works in the absence of EUTAW, and not disclosing to UNRA that they were doing the job on behalf of EUTAW. They continued this for more than three months until the fraud with the regard to the absence of guarantees came to light.
In light of all this what happens to the Shs24billion that UNRA advanced to Eutaw, a firm that we trying to come to terms that it does not exist?
EUTAW does not exist; it ceased to exist even before the signing of the contract with UNRA. The only people in Uganda representing EUTAW are Senkeeto and Niu Hong but I doubt that a civil claim can be brought against the two for the money.
Unfortunately, there are also no bank guarantees to secure government, both for the contract and the advance payment made to EUTAW. The guarantee that had been issued by Housing Finance Bank walked out of UNRA and was replaced by an insurance bond. The guarantee was also a forgery and the insurance company withdrew its bond. There is very dim hope of recovery from the proprietors of EUTAW who are now safely back home in America. Recovery cannot be made against CICO for CICO is only responsible for 12.2 billion shillings. So it seems government will bear to lose the balance .
And who made the guarantee disappear from the bank?
The bank cannot tell you who did this but people in UNRA know and we cannot name him at this time because investigations are still ongoing.
Is that why you directed the UNRA board to suspend the four accounting officers at the roads agency?
When the Ministers discovered the fraud, they sought to validate CICO's presence on site by causing UNRA's Accounting Officer to sign a contract with CICO. There is incontrovertible evidence to that effect. There is also evidence that by then the Ministers knew about the absence of bank guarantees to support the contract and the advance payment.
That is why I caused the Accounting Officer and his colleagues who superintended over the mess to be interdicted. In a long letter to me where he tried to validate the "prudence" and financial/commercial sense of retaining CICO, Mr Kimeze tried to convince me to allow the validation of these illegalities.
And what happens to [Apollo] Ssenketo?
The Inspectorate has no jurisdiction over Senkeeto. But I am made to understand that the police which does, have the mandate to investigate private individuals and cause their prosecution was also carrying on an investigation. As to what will then happen to him after the investigation, your guess is as good as mine.
Who else on behalf of Eutaw do we know is involved in this?
It’s only Ssenketo and the representatives of CICO. CICO's representative was registered as EUTAW's representative in Uganda; the registered office of EUTAW in Uganda is the same as the office of CICO. There is no other official representative of EUTAW in Uganda, apart from Niu Hong, former country representative of CICO in Uganda.
The Minister of Works, Eng. Byandala, when this mess exploded in his face maintained his ignorance and said when he came to office; all deals had been sanctioned and were only awaiting to sign, that due diligence had been carried out. Will you stretch your investigations to time before he came in office?
Procurement for a contractor for Katosi was first attempted in 2010 but it was cancelled. Sometimes later in 2013 it was resurrected and all who are involved started exactly where they had stopped; no due diligence was carried out. Why didn’t they do a fresh procurement? But certainly will look into all aspects.
Unfortunately, the Ministers are continuing with this scheme to validate apparent illegalities and it should not be allowed to succeed. Even for the sake of saving money, government should not protect wrong doers; neither should it validate obvious illegalities. The learned AG should be the last person in Uganda to do this. The procurement would be well on its way had not these wrongdoers obtained a court order to stop it. Government should not create a precedent of sanctioning illegalities.

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