Counting the cost of ignoring expert advice

Author: Okodan Akwap. PHOTO/FILE.

Nearly seven years ago, the Presidential Economic Council (PEC) directed the National Planning Authority (NPA), then chaired by the late Dr Kisamba Mugerwa,  to “prepare a paper” on the revival of Uganda Airlines. 

To undertake a comprehensive study, NPA developed a partnership with key stakeholders. These included the Ministry of Works and Transport, Civil Aviation Authority (CAA), Ministry of Finance, Uganda Development Corporation (UDC), Uganda Air Cargo, Ministry of Defence, and State House.

The team didn’t start from scratch. There was already a preliminary study done by Ernst & Young, commissioned by CAA. Even UDC did a preliminary study. These initial studies greatly enabled the NPA-led team to do a feasibility study and write a detailed feasibility report. 

The feasibility study had some very useful ideas on how a revived carrier could contribute to tourism development and promotion, export growth, and investment in various priority sectors. The new airline could also facilitate the saving of foreign exchange through cheaper air transport for passengers and cargo. But when you look at how these ideas were sidestepped, you can see why we are now counting the costs of ignoring expert advice. 

For example, the experts had recommended that an internationally recognised management team with clear performance targets be put in place to run the new airline for a period of three years, for successful launch and sustainability of the business. They noted that “airline business is highly regulated requiring technical expertise in the different specialisations across the operational and managerial disciplines.” 

An upcoming report by Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) that recently probed the mess in Uganda Airlines, based on queries in the Auditor General’s report for financial year 2021/2022, may illuminate this issue. 

However, Cosase should not crucify the “unqualified” individual now in charge of the airline.  The players may have tinkered with the figures in the projected expenditure. 

For instance, the experts recommended four Bombardier CRJ900 aircraft for regional operations. They put the price at $111m (Shs425b). But we reportedly paid $190m (Shs728b) per plane. Now, let’s do the math. Shs722b – Shs421b = Shs303b. That’s the difference for just one plane. Multiply that by four you get Shs1.2 trillion. 

The experts also recommended two Airbus A300-200 aircraft with the price for each plane put at $219m (Shs839b). For two it would be about Shs1.6 trillion. 

But there was a change of plan in 2018. A switch was made to the latest Airbus A300-800Neo (new engine option) that cost $293 million (about Shs1.1 trillion). For two, we reportedly paid Shs2.2 trillion. Thus, the original plan for Shs1.6 trillion rose to Shs2.2 trillion, a difference of Shs600 billion. 

The recommended A200-300 – even a used one – would have been fine for a start-up airline. Faith in the 2014 A300-800Neo was thin. Airlines were not rushing for it. (Only Kuwait Airways and Uganda Airlines had orders as of May 2019.) 

“Planes are like cars. You must consider maintenance costs, resale value, etc. Maintaining the A300-800Neo may be tricky, and eventually we may have a problem getting anyone willing to take those planes off our hands,” a source said. 

Should the Inspector General of Government take interest in this matter? Yes, because there seem to be questions over the procurement process. 

Mr Okodan Akwap (PhD) is an associate consultant at Uganda Management Institute.