The Observer (Kampala)

18 November 2012

Uganda: Businessman Sues UPDF for Shs3 Billion

A Kampala businessman, Edward Luyinda, has asked court to compel the army to pay him Shs 3 billion in special damages and compensation for construction services his company rendered to the ministry of Defence between 2007 and 2010.

Luyinda, managing director of Sabric International Limited, told The Observer that despite several meetings with officials from the ministry of Defence over the matter, nothing has been forthcoming.

He says he explained his predicament to Rosette Byengoma, the Permanent Secretary, and she promised to look into the problem. Thereafter, she went silent and attempts to meet her again have not been successful, he says.

In fact, he claims he has been threatened over his persistent demands and now feels his life is in danger.

"There is nothing I have done wrong to demand my money but I have started getting threats to withdraw the case from court," he said. Luyinda added, however, that the threats will not cow him from seeking justice.

Luyinda says he returned to Uganda in 2005, after living in the United Kingdom for many years. He was apparently lured by the prevailing economic environment which convinced him that he could succeed in business.

"I returned with vigour, wishing to make a mark in the construction sector after this newfound peace and harmony the country was experiencing," he said.

Genesis:

In 2007, Sabric International entered into contract with the ministry of Defence to rehabilitate a tank shade at Masaka's UPDF barracks. One year later, the company handed over the completed works. The inspection team from the ministry of Defence inspected the works and declared there were no defects.

Luyinda says that upon completion of the six-month defects liability period, he was supposed to be paid Shs 20 million which had been retained [to cover possible defects]. Till today, he says, the money has not been paid. Luyinda said that besides rehabilitating the tanks, he also performed additional works on the same site which he valued at Shs 60 million.

In 2008, Luyinda says, he signed another contract to construct 10 blocks of flats at the Masaka barracks, worth Shs 6.1 billion. This project stalled at the foundation stage because some items, like whoop iron and dumb-proof membrane which were vital in ensuring that the structure is strong, were not included in the bill of quantities.

When Luyinda asked that the items be included in the contract, the ministry reportedly refused to go on with the works. The businessman says he had to obtain a bank guarantee (20% of the total project cost--Shs 1,235,541,519) from Tropical bank as proof that he had the financial muscle to undertake such a project.

Through his lawyers Kwesigabo, Bamwine and Walubiri advocates, Luyinda wants damages and compensation for the losses he has incurred resulting from the breach of contract. Peter Walubiri, a managing partner of the firm, said they had presented their case, which in his view is solid, and are still waiting for the army to lodge its defence.

"There are some technical issues they [army] raised and once they are out of the way, we shall hear their side," Walubiri said.

Col Felix Kulayigye, the Defence and Army spokesperson, told The Observer he could not comment on a matter in court, fearing to violate the law on subjudice.

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