New Vision (Kampala)

12 February 2013

Uganda: IGG Probes Lukwago Over Chinese Deal

The Inspector General of Government (IGG) is investigating Kampala Lord Mayor Erias Lukwago following a formal complaint that he obtained money and other material benefits from a Chinese company, Foton East Africa Ltd, suppliers of buses, garbage trucks and lorries.

This complaint by the Chinese company claims that political assistants and confidantes of Lukwago obtained large sums of money in return for his authorization of the construction of a motor vehicle showroom.

Sources close to the investigation told New Vision that the Chinese company facilitated Lukwago to travel to China where he assured the management that as Mayor he was going to exercise his authority to ensure the procurement of 100 garbage trucks and 300 buses to be used for public transport in Kampala.

The facilitation for the China trip included air tickets, lavish hotel accommodation and generous spending allowances to a big delegation of Lukwago's political and business associates, including deputy Mayor Sulaiman Kidandala, Councilor Allan Sewanyana and Sarah Kanyike (Lukwago's political assistant).

The Inspectorate of Government has since acknowledged receipt of the complaint and said investigations have started into the allegations.

Last year, the KCCA enforcement department demolished a showroom which Foton had constructed in a road reserve. In a highly publicised enforcement, Foton was surprised to learn that the structure had not been approved. New Vision has seen a letter signed by Lukwago inviting the Mayor of Beijing City, Gou Zhongwen, to attend the commission of this showroom.

At the time of the demolition, arrangements had already been finalised by Foton to facilitate the travel of the Beijing Mayor to Kampala for this purpose.

According to our information, Sarah Kanyike, Lukwago's political assistant, approached Foton management on behalf of her boss and offered to facilitate the approval for construction of the showroom in the road reserve through the office of the Lord Mayor.

In the Foton complaint to the IGG, Kanyike and a one Eng. Frederick Mubiru demanded for a number of payments for approval to encroach on the road reserve at the Shimoni roundabout opposite Garden City.

Foton company officials take Lukwago (3rd left) and other Kampala officials around their facilities in China

Reports of extortion

According to Foton, "Kanyike delivered to us a letter demanding rental payment of US$512 per month running for five years, which was to cover the term of our tenancy for the road reserve. This totaled to US$30,720. Our Mr. Lee and Miss Lydia delivered this money to Sarah Kanyike, who received them in the Lord Mayor's office. We were promised to have the receipts delivered to our office the same day in the afternoon, but up to date, we have never received them despite repeated demands."

However, when contacted, Kanyike denied taking money from the officials of Foton East Africa. "What I know is that they (Foton) paid for several things which included the job card, commencement fee and another and the receipts are there. There were different receipts"

When they came, I referred them to Planning and they went there. Let them go to KCCA and verify...," Sarah Kanyike added

The IGG's office has been informed that Eng. Mubiru told Foton that US$5,000 was needed by KCCA to be allowed to commence construction and the money paid to him on the understanding that it was to be taken to KCCA.

According to the Chinese company, "Eng. Mubiru brought our works inspection card in duplicate and on the same occasion took measurements on the ground to show us the dimensions of the structure, particularly the area in the road reserve that we would officially be allowed to cover". However to date, Foton has never been given a receipt.

Assurances from officials

All along, the Chinese company kept receiving assurances from Michael Nuwagira (Toyota), and a business associate of Lukwago in this transaction, that the Mayor would deliver approval for the building.

Foton in their plea to the IGG further state that "in July 2012 Kisekka, Principal Horticultural Officer, approached us and demanded US$2,500 for cutting down two trees from our site on Plot 42 Nile Avenue. He gave us a quotation as copy attached. We gave him the money, the trees were cut down, but up to now, he has failed to give us a receipt for the money despite repeated demand. Our inquiries have revealed that the amount was highly exaggerated and worse still it was never received by KCCA."

They further state that being new investors in the country, they are not yet acquainted with the systems. "We genuinely believed what we were told by KCCA officials to be the official position. Sadly our investigations have revealed all the various sums mentioned above that were extracted from us never reached the coffers of KCCA.

"Worse still, we feel that our structure at Plot 42, Nile Avenue was demolished as a direct result of being misled by those KCCA officials. In the event we lost a lot of funds that we had paid to the contractors who were building the structure, and therefore also lost anticipated sales, as this caused a heavy set back." Foton in the petition to the IGG appealed for assistance to enable them recover the monies.

No order for trucks or buses

To make matters worse, nearly a year since the high profile trip to China, Foton is yet to receive the expected order for the garbage trucks and buses as promised by Kampala Mayor .The sample truck delivered by Foton following Lukwago's high profile China visit is rotting away at a yard in Kampala's industrial area.

Another source familiar with the investigation has pointed out that Lukwago, unable to influence the procurement process in favour of the Chinese has since embarked on a series of court actions and petitions to Parliament in order to influence the approval of the purchase of garbage trucks and buses in favor of Foton.

It is believed that Lukwago's plan enjoys the support of some high level Cabinet ministers and well connected businessmen who are also lobbying KCCA procurement to look favorably upon Foton. In a recent petition, he is demanding that Parliament forces KCCA to buy garbage trucks.

Foton East Africa (U) Ltd is a Chinese Company specialising in distribution of different types of automobiles. Their mission in Uganda was to set up business including supply of garbage collection trucks and intercity buses.

Last year, his allies took the lead when the local governments of Wakiso, Entebbe and Mukono petitioned Parliament over the validity of Pioneer Easy bus operations. The public service and local government committee of Parliament, which handled the petition, is yet to submit its report.

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