Robert Mwanje
2 July 2009
Kampala — Kampala City Council has given the Uganda Taxi Operators and Drivers Association [Utoda] up-to November 2009 to clear its outstanding debt of Sh1.5 billion or risk terminating its contract.
The City Finance Secretary and Kampala mayor Hajj Nasser Sebaggala said a new consent agreement has been signed with Utoda to have all arrears fully paid before end of year.
"Whereas Utoda has remitted to city council a total of Shs3.4 billion against the current contract sum for 2008/9 and the performance level was 93.3 per cent of the budget estimates, Utoda should have all arrears cleared or it loses contract," Hajj Sebaggala said on Tuesday.
Early this year, Kampala City Council [KCC] threatened to terminate the Utoda contract over "fundamental" breach of contract and the accumulating debt amounting to Sh1.5 billion.
KCC's action followed the Public Procurement and Disposal of Public Assets Authority [PPDA] directive to terminate the contract after some investigations were carried out.
The December 18 report on the performance and management of taxi parks addressed to the town clerk Ms Ruth Kijjambu, said Utoda was among others accused of accumulating a Sh2.3 billion debt, failure to document its operations for the procurement process among others.
But Utoda blocked the intended termination of their contract through the Commercial Court citing irregular treatment by the PPDA report.
Utoda, which manages the two taxi parks in the city at a monthly contract fee of Shs290 million exclusive of Value Added Tax, is also accused of failure to keep accounting records and statistics among others.
To date, the taxi body has reduced the debt with Sh430 million bringing down its arrears to Shs1.1 billion for the remaining five months.
The Utoda tender has always drawn a line between city council's political and technical wing with the former opposing cancellation of their contact while the latter say enough is enough.
But Utoda authorities said the debt will be cleared before the end of this year. Utoda Vice Chairman Chris Ssengoba said the debt is a result of political, social and economic factors.
Utoda contracted the taxi management tender in 1989 at about Shs100 million per month, which has periodically been increased to the current monthly contract sum of Shs290 million exclusive of VAT.
"We are steadily reducing the debt and by the end of this year it will be no more. The public should also remember that before Utoda , KCC used to collect only Sh27 million per month," Mr Ssengoba said on Tuesday.
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