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Inside the SGS contract saga

Rebecca Kadaga

The MPs also noted inadequate intra-governmental coordination in the implementation of the contract; the absence of a master centre that would provide an avenue for arbitration and adjudication in case of disputed test or allegations of fraudulent cases.

In addition, the legislators were not comfortable with the clause in the contract that suggests automatic renewal of the contract for five years. Instead, they recommended that the clause be revisited with a view of cancellation of the automatic renewal clause so as to guard against any potential losses to the country in the event of failure by SGS to meet the agreed upon performance targets.

On creating jobs to Ugandans, the legislators say, the eight envisaged inspection sites would only create around 150 jobs, meaning that the multiplier effect of job opportunities accruing to such machinery intensive exercise is grossly limited and yet the monopoly of the service provider takes home their entire profit from the 90% gross revenue since only 10% is transferred to government.

The committee also recommends that the 10% fee that is remitted to government through the ministry of works should, instead, be remitted directly to the consolidated fund.

They also recommend that inspection fees – which range between Shs 944 to Shs 147, 500 depending on the type of the vehicle – be reduced to ensure affordability and equity for all vehicles, in addition to liberalising the system of motor vehicle inspection.

The other recommendations are that the AG should be cleared to audit the investments by SGS to verify the figures submitted to Parliament so as to attain value for money, physical and financial performance and that other government agencies – Uganda National Bureau of Standards, Uganda Police Force and National Environment Management Authority be involved in supervising the works.

“…we recommend that the implementation of the contract is immediately suspended for a period of not less than three months to enable review and renegotiation of the contract by the ministry of works,” the majority report concludes.

Similarly, the minority report summarily among other things says the main reasons behind the exercise were not well thought about. It notes that the defective motor vehicles, which SGS is inspecting, account for only 2.1% of the road accidents, according to Uganda Police Force data, which is far below the 10% which the ministry of works used in justifying continuity of the inspection exercise.

“Far from suspension, the contract with SGS requires immediate termination to pave way for a total overhaul of the defective vehicle inspection environment characterized by the absence of a master test centre, inept monitoring and supervision, exorbitant pricing and the absence of functional synergies with other key actors,” the minority report says.

Purpose of the inspection

The whole idea of Motor Vehicle Inspection exercise is to improve road safety and reduce road accidents caused by vehicles in dangerous mechanical condition.

It is also about keeping the environment safe by addressing key aspects like emissions testing in accordance with the current recommended emissions standards.

The other big objective of the exercise is to ensure that vehicles comply with the traffic and road safety (Motor Vehicle inspection) regulations of 2016 and the standards set by the ministry of works and transport in the “Manual of Vehicle Inspection” as well as other recognised international road-safety standards.

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