3 May 2018

Uganda: AG Gives Green Light to SGS Vehicle Inspection Contract

Government has given an all clear to the contract awarded to Swiss company Societe Generale De Surveillance (SGS) for mandatory vehicle inspection, saying it cannot be terminated as demanded by the MPs because it is legal.

Earlier in March this year, speaker of parliament Rebecca Kadaga tasked the attorney general to communicate to the House on the risks and gains government would incur if the SGS contract were to be cancelled.

The contract with SGS was signed in March 2015 to routinely inspect vehicles, largely to get cars in poor mechanical condition off the roads so as to reduce accidents. The contract however drew controversy and was subjected to an inquiry by the parliamentary committee on physical infrastructure last year.

Issues raised included the contract's commencement date, payment of concession fees. MPs also accused SGS of charging prohibitive costs on vehicle inspection and influence peddling in order to get the contract.

The majority committee report by committee chairperson Lillian Nakate (Luwero Woman MP) indicated that the attorney general had warned that terminating the contract would attract huge penalties in compensation while the minority report drafted by West Budama Norh MP Richard Othieno noted that the contract be terminated due to illegalities committed.

The report also called for investigations into the matter of tax evasion and involvement in fraudulent activities by the company. The two reports indicated that Eng Denis Sabiiti, now Rubanda West MP who was the mastermind of the contract was guilty of causing financial loss to the government.

Sabiiti was accused of having used his former office in the ministry of Works and Transport to steer the lucrative vehicle inspection contract to SGS and that he had been hired by SGS as a consultant for the same project, which depicts conflict of interest.

However, deputy attorney general Mwesigwa Rukutana told parliament on Wednesday that there was nothing in the agreement that was in breach of the laws of Uganda.

"Whether the allegation is true or false, we do not find any justification to impute fraud on part of SGS for alleged employment. We agree with the observation by the majority report that having been cleared by the attorney general, the contract is valid," Rukutana said.

MPs including Othieno, Nandala- Mafabi (Budadiri West), Herbert Ariko (Soroti Municipality), Bernard Atiku (Ayivu), Joshua Anywarach (Padyere), Patrick Isiagi Opolot (Kachumbala) and James Kakooza (Kabula) among others cited conflict of interest and unethical behaviour as grounds for which the contract should be terminated.

"There was a lot of conflict of interest in the matter and therefore government needed to terminate the contract with SGS," Nandala-Mafabi said.

Rukutana insisted that the said contract was subjected to the clearance by the attorney general under article 119 of the Constitution as required by law and the contract was found to be valid.

"In practice, the attorney general chambers do not pro all agreements. Officials from the attorney general chambers may participate in the negotiations and drawing agreements," Rukutana said.


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